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Module 7: Metrics for innovations Patricia Laney
Southern New Hampshire University
MBA 580
Dr. Alexandru Manus
06/04/2023
Metrics Evaluations Based on information about the two companies, the limitations of metrics indicators of innovation are evident in the investment in the “R&D department and the number of active products in the market.” These metrics, such as R&D investment, significantly contribute to innovation, creativity, and product improvement. It is essential for any organization to have R&D as it plays a crucial role in their survival. Additionally, having a strong focus on R&D can give a competitive advantage over competitors and constantly strive for product improvement.
Another important metric is the “number of active products.” This indicator demonstrates
that your organization is constantly evolving in response to consumer needs. It reflects the organization's commitment to innovation. Simultaneously, it provides insights into the effectiveness of your R&D efforts in pursuing innovation in the right direction.
Based on the information, company AMMB, Inc has invested $14M in its R&D budget but only has 6 active products in the market. This analysis suggests that the company spends a significant amount on R&D but has a relatively low number of active products. Additionally, over the past 4 years, the company has obtained 23 patents. In my opinion, one possibility could be that AMMB, Inc invests in expensive technology for their new products. Another possibility is that the R&D managers may not have provided sufficient input or involvement in research and
development, resulting in a low innovation score of only 33 points. As Christensen, Kauffman, and Shih suggest, the relevant marginal cost is actually the full cost of creating something new.
On the other hand, INAGG, Inc currently has 12 active products with an R&D investment
of $10M. This comparison indicates that INAGG, Inc is more productive in utilizing its resources. One reason could be their focus on emerging technologies and more effective innovation practices.
Company Evaluation:
We can overcome certain limitations by using a combination of metrics, such as the number of sales and the number of new active products. These indicators collectively demonstrate that our company is consistently innovating and successfully selling our products. Furthermore, these combined metrics indicate that our products are well-distributed in the market
with the potential for sales.
Ability and Limitations of Metrics and BI
Business intelligence can be an effective tool that combines data analysis and visualization for any organization. When BI has the correct data information, it can eliminate inefficiencies and facilitate proactive changes. However, one negative effect or limitation of BI is data manipulation. It is crucial to have accurate data to obtain real results, as any errors in the data can potentially misrepresent the truth. Nevertheless, the results obtained from BI are highly accurate and can aid in making significant changes.
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