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Maximizing Your R&D Investment

With efficiency and innovation at a high priority in OEMs, global R&D leadership is thinking strategically about different ways to gear up for execution change management and alignment.

External economic and challenging market conditions can put any organization’s success at risk despite proactive internal initiatives and cross-functional corporate strategies. For most original equipment manufacturers (OEMs) especially, research and development (R&D) investment is a critical aspect of the enterprise strategy to maximize the return on investment for organizational growth, profitability and sustainability.

While doing more for less and continuous innovation requirements transformed from “good to have” to “must have,” global R&D leadership began looking for ways to gear up for execution change management and alignment, not only within the organization, but also with external partnerships. Their ultimate goal is to avoid capital deterioration in the long run on the hard and soft assets. For the best R&D efficiency, there are two major aspects to consider:

Internal – People, processes and cultural readiness towards a common goal, vision and mission

  • How are the enterprise cost, quality and productivity performance indicators measured and managed?
  • What do the respective divisional goals mean to the stakeholders within the R&D pyramid, right from the top level executives all the way down to the people delivering the projects?
External – Getting the best out of external partnerships with shared risks

  • How can external partners help align with the OEMs’ R&D operations and execution plan through engineer to order (E2O) services strategy?
  • What do the enterprise cost, quality and productivity measures mean to external services organizations and every external employee engaged to support the customer enterprise?
Leveraging external partnerships
Conventional organizational structures demand too much of too few, but not enough of everyone, within the pyramidal hierarchies. Especially in a matrixed organization, where the business and technical processes are highly collaborative and highly complex, OEMs have challenges to leverage external R&D engineering suppliers/services engagement models to the extent possible in order to add value.

As human capital management complexity grows, next gen R&D leaders could leverage external suppliers as change management partners who not only have technical capabilities, but also strong practices expertise in human capital solutions, compliance and cultural requirements to design “Engineer To Order” (E2O) services engagement models tailored to fit their needs vs traditional engagement models. These are critical for a seamless transformation. In our next segment, we address the approaches and models companies have at their disposal to overcome few challenges.

Read part two of this two-part series.