Project selection by scoring for a large R&D
organisation in a developing country
S. Rengarajan and P. Jagannathan
Bharat Heavy Electricals Limited, Corporate R&D Division, Vikas Nagar, Hyderabad 500 093 India
A project selection method has been der-
ived for the R&D Division of an electrical
equipment manufacturer in a developing
country. In the method, a scoring model is
used to select and rank projects which
have a wide range of objectives and
characteristics. The criteria used for selec-
tion relate specifically to the organisation’s
needs and culture, and they are weighted
according to their relative importance as
perceived by executives. The results of the
study indicate the research culture of the
R&D Division and reflect its environment.
As such the paper illustrates a method-
ology which can be universally applied to
large R&D organisations in developing or
developed countries.
1. Introduction
Modern day organisations are faced with a
multitude of challenges in the form of global
competition, increasing demands from
knowledgeable, discerning customers, grea-
ter environmental concerns, and the need for
exports. R&D is needed to retain and expand
existing markets through incremental impro-
vements and to diversify into new product
lines through innovative developments.
The high cost and uncertainty associated
with R&D projects make high quality invest-
ment decisions important. To maximise the
output from R&D, it is imperative for the
organisation to select those R&D projects
which are in line with its short term goals as
well as long term objectives.
Numerous methods and models for R&D
project selection have been developed by
many researchers (Baker, 1974; Cooley et
al., 1986). These models and methods can be
broadly classified into four major areas
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(Souder and Mandakovic, 1987):
(i) Economic methods
(ii) Decision trees
(iii) Linear and dynamic programming
(iv) Scoring method
The method chosen depends upon the type of
research carried out in an organisation, its
culture, emphasis on R&D, availability of
suitable research personnel, local conditions
and other factors. Economic methods and
decision trees are generally suitable to eval-
uate specific product oriented research for
which future cash returns can be predicted
with reasonable accuracy (Krawiec, 1984).
Linear and dynamic programming methods
can be applied to maximise returns from a
portfolio of projects (Jackson, 1983). In
contrast, the scoring method allows for
subjective evaluation criteria that can be
tailor-made for a particular organisation and
where a variety of research is undertaken.
Environmental, human and other non-
financial factors can also be taken into
account (Souder and Mandakovic, 1987). In
a developing country, the acquisition and
adaptation of available technology may be
preferred to original research work and incre-
mental research assumes a predominant role
in the organisation. Under such conditions, a
scoring method can be used to rank projects.
A project selection method based on a
scoring model has been developed for a large
R&D organisation dealing with different types
of research. The organisation studied is the
Corporate R&D Division of a company
involved in the manufacture of heavy electri-
cal equipment. All the units of the company
are located in a single developing country
(India) but are widely scattered geographi-
cally. The R&D Division is organised into
functional groups with specialist manpower,
155
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S. Rengarajan and P. Jagannathan
laboratories and computing facilities; it serves
the needs of various manufacturing plants and
so projects are varied and multidisciplinary.
2. Methodology
Selection criteria are chosen which reflect the
specific needs and culture of the organisa-
tion, such as the type of research to which
the company is oriented, its style of func-
tioning, organisational constraints and work-
ing environment.
The functioning of the Division is mainly
governed by its research executives. The
research executives may determine projects
on the basis of trends in their respective fields
Table 1 Thirteen project selection criteria used by R&D executives
and future needs. Alternatively, projects may
be suggested by the manufacturing plants
(based on their existing problems) in which
case the plants define only the goal on which
research executives plan and execute a pro-
ject. Thus, the views of the research
executives are a strong indicator of the R&D
Division’s strategic orientation and are
included in the project selection process in
the form of weightage factors.
Projects are evaluated in terms of their
estimated contribution to each criterion.
These contributions are multiplied by the
weighting and added together to give a total
score for the project (Jackson, 1983). This
shows how relevant a given project is to the
R&D Division.

Criteria Significance Weightage

factor

Successful completion of the project
[COM ]
Work related to the existing products only
[EXI ]
New products/process [NEW ]
Manufacturing plants association in
selecting the research programmes
[PLT ]
Patenting [PAT ]
Publishing the work done [PUB ]
Social objectives [SOC ]
Image of the organisation [IMG ]
Duration of the project [DUR ]
Cost of project [COS ]
Space availability [SPA ]
Availability of executive manpower [EXE ]
Availability of technical supporting staff
[SUP ]
Organisation’s ability to take risks by working in new
areas and achieving results 7.5
The importance given by the organisation to
incremental R&D on the existing products 6.9
Organisation’s interest in taking up work in new areas
and its need for diversification 6.8
Interaction between R&D and plants. The willingness
of the units to accept and adapt the results achieved
by R&D 7.0
Indicates the extent of new product/process 4.6
development
Willingness to get recognition of R&D achievements
by other organisations. Credibility of engineers and
scientists in the national and international fora 5.1
Organisation’s willingness to meet any social
objectives apart from the business 4.5
The need felt by the organisation to acquire high
reputation by dealing with projects in frontier areas 6.1
How fast the organisation needs the results 7.3
Ability to provide fund 6.9
Ability for physical expansion of test facilities/
accommodation of new projects which require
larger space 4.6
Requirement of executive manpower 7.6
Requirement of technical supporting staff manpower 6.3

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 A scoring method for project selection
2.1. Building up project selection criteria Table 2 Demographic and related aspects of the
sample.
The determination of appropriate criteria is
an important step, since they must reflect the No. Percentage
prevailing culture and environment in the 1. Designation (grade)
organisation (Souder and Mandakovic, E1 4 3.74
1987). Thirteen criteria were identified based E2 12 11.22
on the study of the environment and elabor- E3 14 13.8
ate discussions with the executives. These E4 57 53.27
E5 14 13.08
are the general elements which the execu- E6 6 5.61
tives feel are important. The manufacturing Total 107 100.00
plants are not consulted or involved in deter-
mining the criteria because, in general, they 2. Qualifications
are not directly involved in the planning and Graduates 32 29.91
execution of the projects. However, they Post Graduates 52 48.60
Ph.D 23 21.49
extend necessary support for the smooth
running of the projects and they ultimately Total 107 100.00
benefit from their results. 3. Age
These chosen criteria are given in Table 1. <35 15 14.02
36 – 40 27 25.23
41 – 45 45 42.00
2.2. Sample selection >46 18 16.82
Total 107 100.00
The executives chosen to take part in this
study were from different functional areas. 4. Function
The sample was further classified in terms of Electrical 39 36.45
position, qualifications and age. Their selec- Electronics 15 14.02
tion was also based on the respondent’s Mechanical 34 31.78
Science and others 19 17.75
willingness to participate in the research
work and his/her frankness in answering the Total 107 100.00
questions. Thus, the sampling was based on
the stratified and judgement sampling tech-
niques (Kothari, 1985). The demographic with the project team, evaluates each project
profile of the sample is shown in Table 2. based on its contribution to each of the cri-
teria. The questions were formulated as
2.3. Data collection and calculation of total multiple choice in which the respondent had
score to select one of the alternatives. Discrete
marks were awarded to each choice as indi-
The opinion of executives in respect of the cated at the end of questionnaire 2. The mark
selection criteria was obtained by using a awarded to each question was then multiplied
questionnaire (Appendix 1). For each criter- by the respective weighting to give the
ion, the respondent was asked to assign his/ weighted score for that particular criterion.
her perceived importance in the form of The sum of all criterion scores gave the total
marks in a continuous scale from 1 to 10. score for the project.
Since all the criteria are relevant to project
selection, no criterion was allowed to be
omitted by giving it a zero mark. The aver- 3. The environment of the R&D
age value of marks given by the executives Division
was taken as the weighting. The weighting
for each of the chosen criteria are illustrated The data obtained from the research execu-
in Table 1. tives was sorted and analysed using a
Questionnaire 2 (Appendix 2) was used to computer spreadsheet. The mean marks in
rank individual projects. This questionnaire, respect of function, qualification, position
completed by the planning group or the and age are illustrated in Figs 1 to 4. It is
project selection committee in consultation observed that in all cases a general trend is

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S. Rengarajan and P. Jagannathan

Figure 1. Weightage factors based on function.

Figure 2. Weightage factors based on qualification.

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 A scoring method for project selection

Figure 3. Weightage factors based on position.

Figure 4. Weightage factor based on age.

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S. Rengarajan and P. Jagannathan
exhibited with the variation found to be small
in almost all categories. This implies a broad
consensus among executives.
The pronounced bias towards projects
which are short term with a high chance of
successful completion and the association of
manufacturing plants show that the research
activity mainly supports the improvement of
existing products and is incremental in
nature. But, an equal weighting was also
given to new products, indicating the will-
ingness of the executives to develop new
products, although such developments are
fewer in number. In some cases, product
developments are market-driven and the
latest technology is not available to the com-
pany because it is either denied or too highly
priced. This fact is reflected by the low
preference to patenting and to a certain
extent publication, as these two criteria are a
measure of development of new products,
processes and inventions. This can be easily
explained as companies in developing coun-
tries mostly buy technologies from outside
and adapt them to meet local conditions.
Social objectives have been assigned
lower priorities. This implies that profit
making and maximising wealth are assumed
to be important. Space availability does not
seem to be a constraint. The fact that the
availability of executive manpower is rated
high relative to the availability of supporting
staff implies that most projects depend to a
significant extent on the expertise of research
executives.
4. Project selection analysis
Five projects were subjected to the ranking
process using the method developed. Individ-
ual project teams were asked to make a
realistic evaluation of their proposed pro-
jects, in terms of their contribution to each of
the criteria and to arrive at a project score.
The details of these projects and their scores
are given in Table 3.
The scope of Project ‘A’, taken on request
from one of the manufacturing units, was to
develop a technology-driven product with an
assured future market. The technology devel-
oped by the R&D Division would be absorbed
by the manufacturing unit for regular produc-
tion. Project ‘B’ was also referred by one of
the plants and its aim was to develop an
import substitute for which demand was not
continuous. Project ‘C’ dealt with the study of
certain materials used in existing products.
The results could help the design of equip-
ment. Project ‘D’ was to develop an improved
version of an existing product. Relevant infor-
mation was not available as it concerned a
new process. Further, the manufacturing plant
was not very hopeful of the market for such a

Table 3 Calculation of total score for various projects

Project A Project B Project C Project D Project E

Criterion Weightage
No. factor Marks Marks Marks Marks Marks Marks Marks Marks Marks Marks
X X X X X
(W.F.) W.F. W.F. W.F. W.F. W.F.

1 7.5 10 75.0 10 75.0 8 60.0 4 30.0 8 60.0

2 6.9 2 13.8 10 69.0 8 55.2 10 69.0 10 69.0
3 6.8 10 68.0 2 13.6 2 13.6 8 54.4 2 13.6
4 7.0 10 70.0 10 70.0 8 56.0 4 28.0 10 70.0
5 4.6 8 36.8 2 9.2 2 9.2 6 27.6 2 9.2
6 5.1 8 40.8 8 40.8 10 51.0 6 30.6 8 40.8
7 4.5 2 9.0 2 9.0 2 9.0 10 45.0 2 9.0
8 6.1 10 61.0 10 61.0 4 24.4 6 36.6 6 36.6
9 7.3 5 36.5 7.5 54.8 7.5 54.8 5 36.5 7.5 54.8
10 6.9 7.5 51.8 7.5 51.8 7.5 51.8 5 34.5 10 69.0
11 4.6 10 46.0 10 46.0 10 46.0 10 46.0 10 46.0
12 7.6 7.5 57.0 5 38.0 7.5 57.0 5 38.0 10 76.0
13 6.3 10 63.0 7.5 47.3 10 63.0 7.5 47.3 10 63.0
Total score 628.7 585.5 551.0 523.5 617.0
Project rank 1 3 4 5 2

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product in the near future. Project ‘E’ dealt
with theoretical investigations useful for
design of an existing product. It was a short
term project with limited expenses for
materials and equipment.
Project ‘A’, involving the development of a
well identified new product scored high in
these criteria and has been ranked first. Next
ranked was Project ‘E’ since it was short term
and low cost with a well identified end use.
Project ‘B’ scored highly in criteria dealing
with confidence of success, relevance to
existing products, interest of manufacturing
plant, penetration into a new market etc. and
was ranked third overall. Project ‘C’ was
perceived to score highest on publications and
availability of space and supporting man-
power, concerns which lower weightings had
been given by the executives. Hence it could
secure only the fourth rank although it had
reasonable scores on important criteria such
as plant’s acceptability, chances of success,
time frame etc. Project ‘D’ was perceived to
be high risk without specific requirement
from the manufacturing plants. Also, the long
time frame went against its acceptability and
hence it finished last in the ranking.
The ranking of projects reflects the
organisation’s research culture. In general,
the organisation wishes to take up projects of
shorter duration and plant-oriented. It de-
mands definite results from each project,
which implies that projects pertaining to new
areas where the results are uncertain are
perhaps given lower priority. Also, since
executive manpower is limited, big projects
which involve many executives, especially
from different disciplines, are considered
only when absolutely necessary.
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A scoring method for project selection
5. Conclusion
Any R&D organisation has to make a choice
from various project proposals received by it.
There are several models for carrying out
such a selection. Our research attempts to
develop a scoring method which is suited to
large R&D organisations involved in differ-
ent disciplines of research work in develop-
ing or developed countries. The method
allows for organisation specific and subjec-
tive criteria to be used so that the results are
relevant to the organisation concerned. To
illustrate the methodology, a large R&D
Division of a manufacturing company in
India was studied; thirteen criteria were
chosen, weightings were calculated and five
projects ranked.
Acknowledgement
The authors thank the management of BHEL
(R&D) for the approval to publish this paper.
References
Baker, N.R. (1974) R&D project selection models; an assessment.
I.E.E.E. Transactions on Engineering Management, EM-21, No.
4, 165 –171.
Jackson, B. (1983) Decision methods for selecting a portfolio of
R&D projects. Research Management, XXVI, No. 5, 21 –26.
Krawiec, F. (1984) Evaluating and selecting research projects by
scoring. Research Management, XXVII, No. 2, 21 –25.
Kothari, C.R. (1985) Research Methodology. Wiley Eastern Ltd.,
77–96.
Cooley, C.E., Hehmeyer, J. and Sweeney, P.J. (1987) Modeling
R&D resource allocation. Selected papers from Research
management, Industrial Research Institute, New York, 60 –65.
Souder, W.E. and Mandakovic, T. (1987) R&D project selection
models. ibid., 84–90.
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S. Rengarajan and P. Jagannathan
Appendix 1

Questionnaire 1
PART — A
PROFILE OF THE SAMPLE
(Please tick the appropriate box wherever necessary)
1. Present grade
E1 ( ) E2 ( )
E3 ( ) E4 ( )
E5 ( ) E6 ( )
2. Age _____ Years

3. Educational qualification
Ph. D ( )
Post graduate ( )
Graduate ( )
Any other ( )
4. Area of specialisation _____________________________
(State whether Mech. Engng./Elect. Engng/Chemistry etc.)
5. Experience in the present organisation __________ years

6. Total number of years of work experience _____________

7. Whether directly working in the projects
Yes ( )
No ( )

PART — B
Please award marks (minimum = 1; maximum = 10: for example 1, 2, 4, 5 etc.) to each
criterion according to the importance given by you to that criterion while selecting an R&D
project. Any two criteria can get same marks, when they are of equal importance.
The aim of this questionnaire is to arrive at a weightage factor for each criterion,
mentioned below.

CRITERIA MARKS
1. NON-FINANCIAL CRITERIA
Successful completion of the project [ ]
Selection of R&D projects in relevance to the
€existing products only [ ]
Development of new product/process [ ]
Manufacturing plants’ guidance or association
€in selecting research problems [ ]
Patenting the work done [ ]
Publishing the work done [ ]
Meeting the social objectives [ ]
Image of the organisation [ ]

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 A scoring method for project selection
2. FINANCIAL CRITERIA
Duration of the project timewise [ ]
Total cost of the project [ ]
Space availability [ ]
Availability of specialist manpower (Executives) [ ]
Availability of technical supporting staff [ ]

Appendix 2
Questionnaire 2
This questionnaire will be filled by the planning group or the project selection committee in
consultation with the project team. The questions asked here are in one to one correspondence
with the criteria mentioned in the PART-B of the questionnaire 1. Please make a tick mark in
the appropriate box which you feel most relevant.

NON-FINANCIAL
Confidence on the successful completion of your proposed project
[ ] very good [ ] good [ ] moderate [ ] low [ ] very low

How far your project is relevant to any existing product?

[ ] very good [ ] good [ ] moderate [ ] low [ ] very low

Chance of any new product development

[ ] very good [ ] good [ ] moderate [ ] low [ ] very low

Possibility of immediate transfer of results /technology to the manufacturing plant

[ ] very good [ ] good [ ] moderate [ ] low [ ] very low
Possibility of patenting the work done
[ ] very good [ ] good [ ] moderate [ ] low [ ] very low
Chance of outcome of any technical paper
[ ] very good [ ] good [ ] moderate [ ] low [ ] very low
Meeting any social objective
[ ] very good [ ] good [ ] moderate [ ] low [ ] very low
Chance of boosting the image of the organisation directly by completing this work
[ ] very good [ ] good [ ] moderate [ ] low [ ] very low

FINANCIAL
Duration of the project , ‘t’ in years
t<1 a [ ]
1<t<2 b [ ]
2<t<3 c [ ]
t>3 d [ ]

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S. Rengarajan and P. Jagannathan
Financial outlay of the project, ‘x’ (Rs. in lakhs)
x<5 a [ ]
5 < x < 10 b[ ]
10 < x < 20 c [ ]
x > 20 d[ ]
Does the project require extra space?
Yes e [ ]
No a [ ]
Requirement of specialist manpower (executives) for your project
1 a [ ]
2 b [ ]
3 c [ ]
4 or above 4 d [ ]
Requirement of technical supporting staff for your project
1 a [ ]
2 b [ ]
3 c [ ]
4 or above 4 d [ ]

Score
Non-financial Financial
Very good 10 a 10.0
Good 8 b 7.5
Moderate 6 c 5.0
Low 4 d 2.5
Very low 2 e 0

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