R&D project selection using the analytic network process

TLDR

The analytic network process (ANP) is proposed as a valuable tool for selecting R&D projects, addressing the challenge of allocating resources among competing proposals while aligning with an enterprise’s strategic objectives and integrating financial and strategic benefits. The authors develop a generic ANP model that extends Saaty’s analytic hierarchy process, incorporating decision levels for actors, research stages, metric categories, and individual metrics to evaluate competing R&D proposals. A case study at a small high‑tech company demonstrates the model’s implementation, showing that the ANP framework can be applied with real decision‑making data.

Abstract

The analytic network process (ANP) is presented as a potentially valuable method to support the selection of projects in a research and development (R&D) environment. This paper first discusses the requirements of the R&D project selection problem, which requires the allocation of resources to a set of competing and often disparate project proposals. Among the factors complicating this task is the need to make the decision within the framework of an enterprise's strategic objectives and organizational structure while considering and integrating financial and strategic benefits of each project. The paper discusses the use of the ANP, a general form of Saaty's analytic hierarchy process, as a model to evaluate the value of competing R&D project proposals. A generic ANP model developed by the authors, which includes in its decision levels the actors involved in the decision, the stages of research, categories of metrics, and individual metrics, is presented. The paper concludes with a case study describing the implementation of this model at a small high-tech company, including data based on the actual use of the decision making model.