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How research & development adds value : a business modelling method for R&D organisations

Sweet, Neill (2012) How research & development adds value : a business modelling method for R&D organisations.

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Abstract:This research arose out of an interest in capturing the value of R&D. An interest which brought the two areas R&D and Business Models together and led to the following research question: How to build a business model for a research and development organisation? The quest for an answer did not only contribute by illuminating the shady grounds of value creation within R&D, it strengthened the fundaments where this research is built upon as well. For this research, a generic method to build a business model in a structured and reproducible manner (Meertens et al, 20011) is tailored to be applicable for R&D organisations. The adjustments of the method based on typical R&D characteristics led to the solution design which then was demonstrated and validated via a case study. To ensure the quality of the validation an expert validation is done as well. In section 2.1 the BMM is introduced based on the following business model definition: “A business model is a simplified representation that counts for the known and inferred properties of the business or industry as a whole...” By a thorough literature study in section 2.2 the known and inferred properties of R&D were classified as project oriented, managing activities, risk management, cost management, value and external linkages. These characteristics were used in section 2.3 to research the suitable techniques within the BMM. The solution design which is built upon the outcomes of 2.3 is presented in chapter 3. First the roles are identified using a stakeholder analysis which is especially designed for R&D projects. Second, the relations are recognised by mapping the value exchanges with e3-value modelling. Third, the activities are specified using Stage Gate Systems and the fourth step quantification of the model is covered by job costing. The fifth and the sixth step are general steps and outside the scope of this research. The solution design is based on two assumptions: o a R&D organisation is project oriented o the business model of R&D is a portfolio of innovation processes In chapter 4 is demonstrated by at SE Blades Technology with a case study on New Product Development projects and a case study on Technology Projects. In the expert validation in chapter 5 the strengths, weaknesses, opportunities and threads of the solution design were discussed. One of the strengths confirmed the results in chapter 4, that the method appeared well structured and useable in practice. The lack of an earning model was addressed as a weakness. However, the solution design is demonstrated at a R&D organisation which is seen as a cost centre. Therefore this is not a weakness but a limitation, as earning models are more useful for profit centres. This automatically leads to the opportunity of doing further research on how to shift from a cost centre to a profit centre. The threads of overlapping definitions which the experts warned for are taken into account during the revision of this thesis. In this research a BMM method is tailored and the solution design turned out to be suitable for building the business model of a R&D organisation. It was not only suitable, it encouraged continuous improvement as well when working with the method. The solution design is validated by experts as well. Based on this validation the limitations of this research have been cleared.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/62865
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