A value creation model for measuring and managing the R&D portfolio

Summary form only given. Lucent Technologies' Bell Laboratories decided to develop an interactive decision support model for R&D evaluation. As a foundation for this development, we examined the history of R&D metrics and divided the metrics into six categories: (1) financial; (2) strategic; (3) quality; (4) organization and environment; (5) market; and (6) technology. These categories provided itemized metrics that helped development of Lucent Technologies' value creation model (VCM). Lucent Technologies' VCM was developed by and within Bell Laboratories to measure the research to commercialization process in its largest division, the Advanced Technologies Group (AT). The basic characteristics in the VCM were instituted through the selection and inclusion of four financial factors (cost, revenue, time and risk) and eight attributes taken from four categories (business units, intellectual property, technologies, markets and strategic initiatives). The quantitative and qualitative factors then provide managerial decision support through the VCM. The VCM model is operationalised as an interactive, networked computer based decision tool.