Forecasting R&D Project Performance: W.L. Gore's Journey

FORECASTING R & D PROJECT PERFORMANCE: W. L. GORE’S JOURNEY By Joseph DiGiacomo, Daniel Sheinberg and Richard Sonnenblick Before assessing the performance of a given project, the framework of the forecasting system must be identified, that is, what is the ultimate goal, the best metric to track, and so on … the model used should incorporate uncertain inputs, offer transparency of data and results in simple terms, and provide scalability, i.e., it should enable quick and easy modification of the analytic elements. Any firm that relies heavily on research and development (R&D) to generate future revenue has to make critical decisions regarding the selection of the appropriate development path for each project. Decisions to expand a project’s scope, to cut back or abandon development altogether, to outsource, joint venture, or spin off a project, all involve an element of risk for the decision maker. The best way to make such a decision effectively is to thoroughly assess the project’s future performance under each of the available development alternatives. While the need for such an assessment is obvious, the task of doing it can be daunting. In general, major ...