JOMO KENYATTA UNIVERSITY

OF AGRICULTURE AND TECHNOLOGY

BACHELOR OF SCIENCE IN BUSINESS INNOVATION TECHNOLOGY

EFFECTIVE RESEARCH AND DEVELOPMENT MANAGEMENT

HEIT 2405

ASSIGNMENT

GROUP MEMBERS

BENSON ODHIAMBO- HDE216-0500/2017

STELLA SHAVUYA- HDE216-1007/2017

OWEN AGOLLA- HDE216-1006/2017

REGINA KAHIU- HDE216-0516/2017

MORIN MUREITHI- HDE216-0448/2017

THOMAS KIMANI- HDE216-0421/2017

In a business world marked by rapid technological developments that are causing disruption in

various industries and markets, the need to be at the forefront of the changes remains an

imperative for many businesses. One of these ways of staying ahead in the ‘hyper-competition’

is to have a strong Research and Development (R&D) function.

Research and development (R&D) includes activities that companies undertake to innovate and

introduce new products and services. It is often the first stage in the development process. The

goal is typically to take new products and services to market and add to the company's bottom

line.

Through research and development eight imperatives have been developed to support

innovation.

They include;

1. Focus on process and governance as well as structure

There is a tendency in reorganizations to become overly fixated on organizational charts – but

changing these alone will have limited effect. It is also vital to focus at an early stage on

processes (how will R&D work differently in practice?) And (how will decisions be made, who

will have authority and which functions will be involved?). Designing effective processes that

involves all business units and other functions beyond R&D, such as Marketing and

Manufacturing, is essential.

2. Make the links to business strategy explicit

leader, so business strategy is the starting point for reorganization. A key early task is to agree, as

explicitly as possible, what the business strategy means for R&D – for example, by setting

quantified targets for growth from incremental versus radical innovation, or for manufacturing

efficiencies. Qualitative objectives and requirements may also be set for what the R&D function

should deliver to the business. These can then be translated into criteria to help assess

restructuring options.

3. Clarify the role of R&D and interfaces with other functions

One of the most common R&D reorganization problems is lack of clarity about R&D’s role as

part of the broader innovation effort. In some companies the corporate R&D leader is the de

facto innovation leader – while in other companies there may be a separate corporate innovation

team or chief technology officer, or innovation may be led by marketing or another business

function. Also, R&D often includes technical support and/or quality functions that have different

dynamics and processes. It is therefore vital to be very clear about what R&D should and should

not do, its role within innovation, and its strategic and operational interfaces with other parts of

the business. These interfaces need to be designed and agreed with the full involvement of the

other functions concerned.

4. Establish a cross-functional steering team

R&D reorganization cannot be accomplished by the R&D function alone. R&D is part of a cross-

functional innovation engine, and it has many strategic and operational interfaces with business

units, regions, and other functions. It is essential therefore to establish a steering team of
influential individuals to represent these other parts of the business as well as R&D. This has

many advantages: better cross-functional process redesign, smoother interfaces, broader

stakeholder buy-in and better strategic alignment. Moreover, the cross-functional senior team can

help to identify any pockets of resistance to change within R&D’s internal customers and build

in effective mitigation measures.

5. Use a transparent process to evaluate options

R&D reorganization often involves difficult decisions around major investments, closures,

relocations and so on, and there may be some strong vested interests. It is therefore essential to

take the heat out of the redesign by using a transparent and systematic process that identifies

plausible options and evaluates how each option performs against an agreed set of criteria that is

based on some credible scenarios. These criteria can be derived directly from strategic objectives

and operational requirements. Weightings can be agreed and options scored in real time by the

steering team or other stakeholder group, as shown below. This takes the argument away from

preconceived notions and prejudices and ensures a rational basis for decision-making.

6. Deconstruct the whole to manage complexity

Although successful R&D reorganization requires a holistic approach across structure, process

and governance, for review and evaluation purposes the options for redesign need to be broken

down into design “building blocks” – otherwise the complexity becomes unmanageable.

Breaking options down into building blocks also enables direct comparisons to be made with

good practices used in other companies – something that can be important to support the
business case for change. Once the building-block options have been evaluated, they can be built

back up to form a small number of overall solutions for final evaluation. This is often an iterative

process, and attention should be given throughout to maximizing business value contribution.

7. Pressure test using realistic situations

An important component to ensuring the feasibility of the proposed changes is to conduct a

series of pressure tests with real-life situations. How would current programs and projects run

with the new processes, how would they flow through the new organization, and how effective

would new governance and decision-making approaches be? How would conflicts be resolved

and decisions escalated? These pressure tests can be conducted as desk exercises, and can

provide invaluable input for fine-tuning of the design and identification of issues to be managed

during implementation.

8. Manage hearts and minds carefully

Major reorganizations are often sources of great anxiety and unrest for those affected, and R&D

is no exception. Indeed, scientists and engineers can be especially sensitive, as their motivations

are often closely connected with advancing their fields of work, rather than financial gain or

power. Prioritizing between different lines of research can be highly emotive, and any R&D

reorganization needs to manage these issues carefully. This means that, for example, ensuring

absolute confidentiality within the core team about emerging options is important, until those
options are final and can be properly communicated. Newly developed organizations also require

realignment of personal incentives with new ways of working for example, recognition for cross-

functional innovation efforts, new bonus mechanisms to reflect changing roles, and new career

development paths to reward both technical excellence and management excellence.

In conclusion

R&D rcan deliver immense value to any large company for which innovation is important – and

in today’s era, in which creativity is essential for growth and even survival, this means virtually

every company.

However, R&D can also be costly, time-consuming and risky. If done badly, it can destroy a

huge amount of value and in-house capability that is essential for future competitiveness. By

taking a careful, systematic approach that considers structure, process and governance, and by

paying attention to the eight imperatives outlined above, leaders can greatly increase the

likelihood of sustainable success and optimal delivery of business value.

Budgeting and funding of Research and Development

A budget is the projected cost of running a particular research and developmemt project while

funding is the process of allocating appropriate funds to ensure smooth running of the project.

In order to ensure smooth budgeting and funding of research and development, an organisation

needs to:
1. Keep track of costs so that they can know how to charge for innovation so that the investments

generate profit

2. Take into consideration how much a customer is willing to pay for development of a product

3. Perform a risk assessment with all stakeholders to weigh in on what will work and is worth the

investment the organisation is taking

4. Assign a project manager to manage the project, keep the team on track, monitor progress and

ensure the budget of the research and development project is on target

Factors to consider when creating a budget.

1. Revenue growth - consider whether the company's sales are increasing or decreasing from one

period to the next

2. Operating costs - ensure the expenses are related in the operation of the research and

development project.

3. Capital requirement - ensure the organisation has enough funds to achieve the research and

development project.

4. Administrative support - The research and development department needs help in executing

day to day running of the organisation in order to ensire smooth running of the research and

development

Advantages of budgeting and funding.

1. Aids in coordinating activities across departments.

3. Helps provide an excellent record of organizational activities.

4. It helps improve communication with employees.

5. Budgets improve resources allocation, because all requests are clarified and justified.

Disadvantages

1. Budgeting and funding demotivates employees if they don't participate in coming up with the

budget.

2. Budgeting can turn into a competition for resources.