Planning and control in research and development

OMEGA Int. J. of Mgmt Sci., Vol. 18, No. 6, pp. 573-581. 1990

0305-0483/90 $3.00 + 0.00 Pergamon Press pie

Printed in Great Britain

Planning and Control in Research and Development AW PEARSON Manchester Business School, UK (Received April 1990; in revisedform July 1990) The use of planning and control techniques in R&D is not widespread. Few organisations have a comprehensive system that provides simple and useful feedback to help increase individual as well as organisation performance. A system which has been found to he useful in practice is described in this article. It is based on a combination of known techniques, and its power lies in the way in which it effectively uses information provided directly by project leaders. A major feature is its emphasis on forward rather than historical analysis. This provides the basis for better project management and resource planning at the urganisational level.

Key words--planning, monitoring, resource management, research, development

monitoring system can be developed and introduced if due attention is paid to both individual and organisational needs.

INTRODUCTION

of literature on planning and control techniques, but their use in research and development is still very limited. Why does the very mention of planning and control cause so much debate, even anger, in certain parts of research and development? The feeling often expressed is that the uncertainty is too high to allow structure to be imposed and there is a real danger of stifling creativity and innovation with a consequent reduction of initiative and motivation among key people. Comments are also made about the fear of overcontrol by management, and about the techniques being too much trouble--and too expensive--to use, particularly on smaller projects. In the light of those concerns it is argued that to move forward in this field we must start by treating all projects and all organisations as unique, and spend time identifying the particular management problems faced by the scientists and technologists, in order to assess the types of techniques which are likely to be of most practical help. In doing this across a wide range of projects in a number of R&D establishments it has become clear that a useful planning and T H E R E IS NO S H O R T A G E

ISSUES AND CONCERNS

Factors which are almost always cited as barriers to effective project management (see e.g. [29] include: --scientific and technical problems; ----changing objectives; ----changing priorities; --lack of resources; --lack of commitment; --inadequate planning and estimating; - - p o o r monitoring and feedback. The fact that there is good agreement on these issues by both academic researchers and practitioners is of great value if we are interested in the development and implementation of a 573

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Pearson--Planning and Control in Research and Development

practically useful planning and monitoring system--or perhaps better, a management information system that will be of value to all members of an R&D department as well as their sponsors, customers, etc. It also suggests we may not need to look for any radically new or more-sophisticated techniques, but rather for combinations of existing methods and procedures, with simplicity and usefulness being the likely key to success. The question then is which techniques? A wide variety has already been described in the literature. The earliest and simplest method, the bar or Gantt chart, is still used, often in conjunction with other more recently developed techniques. Network analysis in its various forms, CPM [12], PERT [19], GERT [24], Research Planning Diagrams or RPDs [5], Precedence Diagrams [23], the DELTA Chart [30], VERT [22], is well known. The project accountability chart (PAC) has been described [20], which essentially uses the Gantt chart's horizontal time axis but with the vertical axis showing responsibility centres. More detailed methods have been proposed for large projects, e.g. Work Breakdown Structure [15]. Computer programmes have been written for many of these, for PCs as well as for mainframes. Other papers have explored particular aspects of the methods, for example the distribution of activity times [10] and the uses of simulation and modelling techniques for improving estimation accuracy and assessing risk [3, 4]. In a review paper [6] reference is made to 85 articles which cover many of these areas of technique development. A number of researchers have compared techniques [7, 13, 27] often concluding that they may have different structures but they provide similar information for management purposes. The work breakdown structure approach [15] uses progress to date against planned work to calculate an efficiency measure which can then be used to anticipate 'future performance' in the absence of any more specific data. More recently Lee-Kwang [16] and Schmidt [28] outline approaches aimed at highlighting differences between planned and actual progress and suggest this information might be used for predicting future trends. Like control charts, these systems are based essentially on historical information. However, there is good reason to believe that this is not the most useful type of information

for managing R&D projects effectively. For example, Wilkes and Norris [32] showed that in one engineering laboratory the reasons for delays in completion of projects were in order of frequency, unexpected technical problems, lack of manpower, awaiting supplies and services, and awaiting decisions. Hardingham [11] in an earlier analysis of projects within his own organisation reported delays in completion as due to lack of manpower, extensions to planned work content, and delays in supply. An examination of these items suggests that it is as important to look into the future to anticipate problems as to simply measure the past. This has been noted by many researchers and practitioners, and a number of methods proposed have a generic similarity and are often referred to as 'slip charts'. They have been found to be very useful for monitoring purposes in a variety of organisations [2, I 1, 21, 26]. APPLICATION OF TECHNIQUES The discussion in the previous section indicates that there is no shortage of approaches which might be used to more effectively manage R&D projects. But what is the evidence of their use in practice? In 1967 Allen [1] reported that 77% of a sample of R&D establishments in the UK used networks, bar charts or other forms of graphs to plan and control their projects. Watts and Higgins [3 l] note that almost 20 years later this figure has not increased, their study showing 74% using at least one formal technique. The more detailed analysis in Watts and Higg/ns showed that Gantt charts, PERT/CPM and Research Planning Diagrams were almost equally used, but no respondents said they were using VERT or GERT. Participative objective setting techniques were reported in use by the majority of the sample. This latter technique was also found to be the most widely used and effective technique by Dunne [9]. However, many would see this as a different type of planning and control technique from the others. In the same study project scheduling charts were found to be the best known, most used, and most effective. Work breakdown structure was used regularly by 40% and occasionally by another 40%. Techniques considered to be more complex than PERT/CPM, e.g. allowing branching, looping, etc. were found to be little known, almost unused, and given

Omega, Vol. 18, No. 6

marginal effectiveness ratings by the few occasional users. A study by Liberatore and Titus [17] found a significantuse of Gantt charts and activity networks for scheduling and control, with a relatively minor use of the DELTA or GERT approaches. Dougherty et al. [8] looked at a sample of fairly large projects and reported that "project managers have an overwhelming preference for use of PERT to plan and control R&D when compared with other management systems". They also found that there was a bias to the development end of the spectrum, with PERT being used in about 40% of such projects compared to 27% on applied and 16% on basic research. Finally, a study undertaken on the pharmaceutical industry in the US [14] sought information about the use of project management in general. The conclusions were that project management was seen as important, impacting on the organisation through improved overall planning, reduced development times, effective utilisation of resources, improved communications, and reduced cost, in that order. The conclusions one might draw from these survey results are that individual techniques have had limited applicability, and that each might be appropriate only to a particular type of project. If this is a true interpretation, it would not be sensible to try to impose any one technique across the board, particularly as personal preferences will inevitably play a significant part in the way different people see the value--or otherwise--of particular approaches. Recognising this is the most important starting point for introducing a planning and monitoring system into an R&D establishment. If flexibility is encouraged, much more positive attitudes are found in practice. People would like to have available to them a useful planning method, as was argued in the introduction, but they do not want to have imposed upon them a system that does not fit their needs. DESIGNING AND I M P L E M E N T I N G A SYSTEM

(a) Plans and planning The first step in this process is to get people together in groups to discuss their projects and to develop plans by whatever means they feel most useful and appropriate to their needs. Such

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an exercise has now been conducted well in excess of 100 times, and the results have been consistent. Groups which have been introduced to the flow diagram or RPD type of approach find this very easy to use. The project leader starts by describing the objectives and proposed work plan in very general terms, and from this a flow diagram is quickly produced in a flip chart. At this point group members ask questions, make comments and provide constructive suggestions. It has been found that everyone can contribute, even if it is an area of science and technology with which they are not directly concerned, The enthusiasm and commitment which comes from the group activity coupled with the simplicity of approach emphasises the communication value of good planning. The flow diagram does this well, particularly as it includes activities, decision points, feedback loops, multiple outcomes and endpoints-characteristics which are important in R&D. On this diagram milestones and the estimated dates of achievement are also included. They are shown along specific 'diamonds' and are labelled sequentially. A very simple form of such a diagram is shown in Fig. 1. This emphasises the stage breakdown nature of the new project development process. Many organisations have very strict rules which must be obeyed before authority is given for a project to pass a decision point. More detailed examples can be found in the literature describing actual practice in industrial situations [5, 18, 25]. Milestones should have associated with them a set of criteria which must be met before they are judged to have been reached. For example, milestone 1 might have criteria such as--at least two alternative routes have been identified by which the goals may be achieved, there are no likely patent problems, and the routes suggested appear to be within the technical competence of the organisation. The criteria for milestone 3 might be that the product has been produced in sufficient quantity and at a cost which looks reasonable enough to suggest fullscale operations are feasible if test market response is satisfactory. The important point to note here is that the milestones and the associated criteria are identified in the planning stage of the project. The decision diamonds have a particular significance. Given the uncertainty of R&D, there

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Pearson--Planning and Control in Research and Development Activity

Description

Milestone

Target date

Jan Ist

Define goals and identity criteria

+

Jan

15th

Identify alternatives

.....

I

,+

Jan 3 1 s t

Preliminary evaluation

Feb 28th

iLaboratory experiments

Mar 31st

Pilot scale trials

Hay 3 1 s t

Test market

+

,

Aug 3 1 s t

Scale up and launch

Dec 3 1 s t Fig. I. The new product process.

will inevitably be many occasions on which criteria at the milestones cannot be met. It is then necessary to decide whether to go on with less than hoped for information, to go back, to collect more, or to disband. They are therefore points at which decisions may have to be made about alternative routings, and this is easily reflected in the diagram through the introduction of feedback loops, as shown in Fig. 2. This addition to the design shows that there are a number of possible outcomes to the ac-

tivity. It also emphasises that a project might be disbanded for other than 'technical' reasons. For example an adequate number of alternatives have not been found, and recycling would increase the overall time to completion by an unacceptable amount and hence make the project non-viable. In such cases an early decision to disband is of real value. It obviously saves further direct expenditure, but in an R&D department which is usually overstretched there is an additional

Omega, 1Iol. 18, No. 6

[ IdentifyaLternat~ivesl

YO$

.

Fig. 2. A feedback loop.

opportunity benefit--people can work on new ideas or transfer to a potentially more profitable project. We can, of course, agree at the decision point to take a higher risk, e.g. to go forward with only one alternative, or we may decide to recycle and assume that we can pull back the time delay in future stages. If this incurs heavier costs we must accept that we are altering the cost-benefit of the project. The choice is ours, the flow diagram simply forces us to ask relevant questions. It provides a simple and immediate overview of the whole, and becomes the focus for discussion, communication, team building and responsibility agreement.

Co) Milestones and monitoring It is not easy to manage the progress of R&D projects without getting involved in discussions of the scientific, technical and management problems encountered. One of the negatives which can arise from this is the too close involvement of section heads and senior managers in the detail when the responsibility for this should lie with the project leaders and other team members. It cannot be emphasised too much that the degree of involvement required is that necessary to know what progress is being made, or not made as the case may be, towards agreed goals and what, if any, assistance may be required when difficulties are arising. The next stage of the process then becomes the development of a monitoring system which emphasises the importance of feedback in the conditions of uncertainty surrounding R&D. Whatever approach is used to draw up the initial plans must allow for the fact that actual progress is likely to diverge from that originally expected for many of the reasons cited earlier.

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A major need therefore is for senior management and, in many cases, sponsors and customers to be familiar with the general nature of the plan, but more importantly to have agreed with the positioning of milestones and with the criteria which will be used to ensure that a milestone has been met. It is then comparatively easy to develop a simple management information system based on a combination of the flow chart and the progress chart. What this looks like in practice is shown in Fig. 3, whiqh also highlights the need to include target criteria for each milestone. To allow them to be linked to the flow diagram which is usually drawn vertically we have found it useful to have calendar time on the vertical axis. The first column containing numbers shows the expected time when the different milestones are projected to be met as estimated at the outset of the project, i.e. when the plan is finalised and agreed. The other subsequent columns show the information as provided by the project leader at subsequent review dates. Progress charts may be drawn with the calendar time and review time axes reversed, and linked to other planning techniques, e.g. a bar chart as shown in Fig. 4. Important points to note about this type of diagram are that --the project leader provides the information; - - t h e review dates can be set at fixed or variable intervals, not necessarily coinciding with major decision points; --the information provided is future oriented, not historical. This last point is most important. It means that we do not have to wait for a planned review to find out we are behind schedule--we can bring reviews forward or at least have more detailed discussions on particular issues if slippage is predicted. Finally, it is not necessary for all decision points to be milestones. In fact, one of the problems frequently encountered in practice is that people put in too many milestones. The flexibility of this method of monitoring is that the interval between milestones, and the frequency of review, can be varied to reflect the

Pearson--Planning and Control in Research and Development

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Act

•

Calendar Time

Time

Review

start, I F

J

M

A

;

I M

J

J

A

S

0

l N

D

J

F

Criteria

achieved

target

January

complete

February

March April

complete May

I I

June

f-t-]

July

3~complet e

3

August

September 4

October complete

4

November December January

5

February

5

5 ~ k complete

5

Fig. 3. A progress chart.

complexity of the project, the urgency, and the experience and motivation of the project leader and the team. In practice it is suggested that the distance between milestones should not exceed six months and that there are not many advantages to be gained by making them closer than one month. Review times can vary to suit organisational needs, but quarterly may be freJ

Define goals Identify alts. Prelim. eval.

F

M

A

M

quently enough, and monthly is probably the shortest sensible interval for most R&D projects. THE MANAGEMENT INFORMATION SYSTEM It now becomes useful to add an additional piece of information to that already described J

J

A

S

0

N

D

F

J

H F7 F7 I

Lab.exp

I I

Pilot scale Test mkt. Scale up.

I I

I I

I

Review date

Jan ( s t a r t ) April July October January April

1 1 1 1 1 l

2

3 2 2 2 2 2

4 3

5 4

3 3 3 3

Fig. 4. Alternative form of progress chart.

5 4 4 4 4

5 5 5 5

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Omega, Vol. l& No. 6

above, namely 'reasons for change'. That is, an explanation of why it is that progress is not going a s expected whenever the charts show slippage. Hardingham found this to be most useful in his organisation [11] and used the information to initiate corrective action in certain key areas which subsequently impacted on laboratory performance. The reasons for change section provides useful information for management purposes, and it can be of value to complete this even if milestone dates are not slipping, but corrective or alternative courses of action have been taken to maintain progress to schedule. Adding cost or resources information to the time diagram enables track to be kept not only of time but also of any anticipated changes in resource requirements. This is important because the latter are likely to require a reallocation of people, with potential consequences for other projects. It is also a move in the direction of a useful resource planning system for the organisation as a whole, as shown in Fig. 5. This combination offers additional information. For example --time but not cost slippage usually implies insufficient effort is being applied, probably due to lack of resources or to change in priority;

----cost but not time slippage suggests technical problems, possibly recycling in the early stages, but an expectation of catching up later; ---cost and time slippage indicates problems all round. Finally, the addition of capital and material expenditure rows at the base of the diagram provides all the information required for total financial control of a project. Clearly a network with milestones identified can be similarly linked to the progress chart. The message now becomes clear and simple. The particular form of planning approach used can be agreed by the project leaders and team to suit their perceived needs, provided they can identify milestones which become the focus for monitoring. For simple projects and/or with very experienced people, milestones might be accepted without detailed plans being produced. In certain cases the end date of the project may be accepted as the only useful and necessary milestone. However, if this is done care must be taken, as people are often unwilling or unable to see possible changes in end dates which are planned to be a long way away unless intermediate markers have been identified.

Estimated milestone timing as at review date Calendar Time January February March April May June July August September October November December January February

Jan.

1

ADr.

July

Estimated man days required as at review date

Oct.

Jan.

Apr.

July

Oct.

40

40

40

40

70

70

70

lO0

i00

50

50

300 560

300 560

I

1

i

2

2

2

2

60

3

I00 3

I00 3

3

4

5O 4

5O 4

4

5

300 5

300

5 5 Estimated total man days

550

560

Other resources required to complete (£.O00s) Revenue expenditure

i0

i0

I0

I0

Capital expenditure

400

400

450

500

Fig. 5. Resou~e planning chart.

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PearsonwPlanning and Control in Research and Development CONCLUDING REMARKS

Many organisations have found it difficult to find a planning and monitoring system which can be applied widely within R&D and which provides information of direct value to management. The one described here works. It is based on a combination of techniques which have been variously used in the past. All have therefore been tried and tested. The choice of how they are used must be made by each organisation, taking into account its own needs. The most effective use in practice comes when the information is provided by the project team and other involved personnel. Updates then provide information to all interested parties about progress towards agreed objectives. The approach described in this paper quickly highlights areas for concern and indicates if, and when, projects might best be reassessed or even terminated. In the latter case the nature of the information provided helps to reduce the potential for demotivation, which is always present when work is stopped. The slippage chart and reasons for change information provide valuable feedback to management within a very short period of time. In practice it has been found that useful and actionable information becomes available at the first review date. The system is simple to set up and operate, is liked by the people who have used it, and generates an output which is useful for feedback and control purposes across the laboratory. In short, it is a practical and simple management information system which goes a long way towards tackling the issues raised as problems in the opening section. It provides freedom to people within agreed constraints, indicates when resources need to be reallocated and forward plans revised at the earliest possible time, and encourages the supportive climate which is so necessary in R&D. It also provides valuable information for review and performance assessment for individuals, teams, and the organisation as a whole. As an historical record of the progress of a project the system can form the basis for a post audit which can provide useful information for future planning purposes. The approach is essentially bottom-up, that is, the starting point is the project. The information presented reflects the views of the pro-

ject leader and team, a prime aim of the approach being to encourage discussion, provide support, and increase motivation, not just to develop a system which can be applied in a mechanical way. It has been found to be applicable to projects from all areas of R&D with few exceptions, for example activities or work where the objectives cannot be clearly defined and the methods and procedures to be adopted in the work are not at all clear. It is important in R&D that we encourage new directions and pursue side effects when these are recognised to be of potential value. But we also need to manage more effectively the resources committed to achieving agreed goals. The system outlined here is helpful in this respect, and if used flexibly does leave room for creativity and new initiatives at all stages of the project. REFERENCES 1. Allen JM (1970) Survey into the R&D evaluation and control procedures currently used in industry. J. Ind. Econ. 18, 161-181. 2. Brooke DG (1973) The use of slip charts to review research projects. R&D Mgmt 4(I), 9-11. 3. Brown RA (1978) Probabilistic models of project management with design implications. IEEE Trans. Engng Mgmt EM-25(May), 43-48. 4. Cook TM and Jennings RH (1979) Estimating a project's completion time distribution using intelligent simulation methods. J. Opl Res. Soc. 30(12), 1103-1108. 5. Davies DGS (1970) Research planning diagrams. R&D Mgmt 1(1), 22-29. 6. Dean BV and Chaudhuri AK (1980) Project scheduling: A critical review. In TIMS Studies in Management Sciences, Vol. 15. North-Holland, Amsterdam. 7. Digman IA and Green GI (1981) A framework for evaluating network planning and control techniques. Res. Mgmt 24(I), I0-17. 8. Dougherty DM, Ezell DE and Stephens DB (1984) Preferences and perceptions of R&D project managers. R&D Mgmt 14(1), 47-56. 9. Dunne EJ (1983) How six management techniques are used. Res. Mgmt (March-April), 35-40. 10. Golenko-Giazburg D (1988) On the distribution of activity times in PERT, J. Opl Res. Soc. 39(8), 767-771. I 1. Hardingham RP (1970) A simple model approach to multi-project monitoring R&D Mgmt 1(1), 43-47. 12. Kelly JE and Walker MR (1959) Critical path planning and scheduling. Proc. Eastern Joint Computer Confer. ence.

13. Kidd JB (1987) A comparison between the VERT program and other methods of project duration estimates. Omega 15(2), 129-134. 14. Krusko D and Cangemi RR (1987) The utilisation of project management in the pharmaceutical industry. SRA J. XIX(1), 17--24. 15. Lanford HW and McCann TM (1983) Effective planning and control of large projects--Using work breakdown structure. Long Range Plann. 16(2), 38-50.

Omega, Vol. 18, No. 6 16. Lee-Kwang H and Favrel J (1988) The SSD graph: A tool for project scheduling and visualisation. IEEE Trans. Engng Mgmt 35(1), 25-30. 17. Liberatore MJ and Titus GJ (1983) Management science practice in R&D project management. Mgmt Sci. 29(8), 962-974. 18. Longbottom DA and Hay SJD (1977) Experience in the use of research planning diagrams in a synthetic fibres R&D unit. R&D Mgmt 7(3), 187-190. 19. Malcolm DG, Rosenbloom JH, Clark CE and Fizar W (1959) Applications of a technique for research and development program evaluation. Ops Res. 7(5), 646-669. 20. Martin MP and Trumbly JE (1987) A project accountability chart (PAC). 3'. Syst. Mgmt (March), 6-9. 21. Milliken JG (1973) The underestimation of project duration: a compensating graphic technique. R&D Mgmt 3(3), 155-156. 22. Moeller GL (1982) VERT Technical papers presented to 23rd Institute Conference and Convention of the American Institute of Industrial Engineers, California, September. 23. Parker RC and Sabberwal AJP (1971) Controlling R&D projects by networks. R&D Mgmt 1(3), 147-153. 24. Pritsker AAB and Happ WW (1966) GERT: Graphical

25. 26. 27. 28. 29. 30. 31. 32.

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evaluation and review technique. J. Ind. Eng. 17, 262-274. Quickenden MAJ, Davies GB and Woods MF (1972) The use of research planning diagrams. R&D Mgmt 2(2), 63-68. Reader RD (1977) Aspects of project control in R&D. R&D Mgmt 7(2), 77-84. Ritchie E (1972) Planning and control of R&D activities. OR Q. 23(4), 477-490. Schmidt MJ (1988) Schedule monitoring of engineering projects. IEEE Trans. Engng Mgmt 35(2), 108-114. Thamhain HJ and Wilemon DL (1987) Building high performance engineering project teams. IEEE Trans. Engng Mgmt EM-34, 130-137. Warfield JN and Hill JD (1971) The DELTA chart: A method for R&D project portrayal. IEEE Trans. Engng Mgmt EM-I8(4), 132-139. Watts KM and Higgins JC (1987) The use of advanced management techniques in R&D. Omega 15(1), 21-29. Wilkes A and Norris KP (1972) Estimate accuracy and causes of delay in an engineering research laboratory. R&D Mgmt 3(I), 35-36.

A W Pearson, Manchester Business School. Booth Street West. Manchester MI5 6PB, UK.

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