Metricsfor Product Development Process

Metricsfor Product Development Process

Severalmetrics exist for measuring the development process. Some of themetrics that are applicable include the ratio of revenue or netprofit from the resulting new ideas as the quotient of the averagecost of implementation of the idea. The other metric is aggregate ROIof the new ideas that are implemented. Another metric used is areturn on product development expense (RoPDE), which helps inmeasuring the performance of innovation and development. The othermetrics used include Resource view, capital view, and leadership viewmetrics.

Explanationof the Metrics

Inregards to Resource view metric, focus is on the number ofentrepreneurs who have started a business within the company. Thegroup is called “in-company entrepreneurs.” This metric alsofinds out if there is a process to generate and renew both externaland internal insights. In the end, the metric establishes theinnovation revenue for every employee in a given period. In regardsto capability view, the metric focuses on the percentage ofindividuals that have got training in innovation. Ideally, thismetric looks at the new competencies that are being developed.Leadership view seeks to explore the number of employees capable ofidentifying the set innovation targets. Additionally, the extent ofsenior leadership as far as accountability of innovation is concernedis also explored. Also, there is the return on product developmentexpense (RoPDE) which helps in measuring the performance ofinnovation and development (Gupta, Brockhoff &amp Weisenfeld, 1992).

Thefive metrics are to be used in the proposed project owing to theirbenefits and significance in the project. The last three can examineand assess the inputs, processes and outputs of innovation. However,the RoPDE helps in measuring the effectiveness of a product orservice rather than the aggregate performance of the product as doneby the other three metrics.


Gupta,A. K., Brockhoff, K., &amp Weisenfeld, U. (1992). Making Trade‐Offsin the New Product Development Process: A German/USComparison.&nbspJournalof Product Innovation Management,&nbsp9(1),11-18.