The CFOs Guide to Technology Roadmapping

In highly innovative industries, C-suite executives must invest in Research & Development (R&D) to stay competitive. However, success in R&D is not simply a matter of the amount of R&D spend. Badly chosen projects that are not aligned with a firm’s strategy or poorly managed projects can be fatal for an organization. Although R&D is critical for sustaining the financial performance of an organization, time-pressed CFOs often direct their attention toward manufacturing performance issues or short-term results such as whether a R&D project is currently within budget and on schedule. They leave important decisions such as the selection of strategically worthwhile projects and how to reduce the likelihood of project failure to others. While some CFOs may feel uneasy being involved in R&D—claiming they do not possess the technical background necessary to contribute to innovation strategy and the selection and management of strategically worthwhile projects—they can do much more to facilitate successful R&D. This report confronts the important issue of how the CFO can add discipline to R&D processes. It is concerned specifically with industry Technology Roadmaps and proposes some ways they can be useful to practitioners. A Technology Roadmap is a risk management tool that supports the growth of an industry. It is a document that can be used as a reference point when choosing and managing R&D projects. It provides an overview of what those in the industry see as the future needs and technical challenges facing the industry, and it outlines possible solutions. This report draws on a case study of the semiconductor industry to help improve executives’ knowledge of Technology Roadmaps. The semiconductor industry was the first industry to develop a Technology Roadmap. The Technology Roadmap has been the lifeblood of that industry for more than 20 years, allowing it to improve the performance-to-cost ratio of wafer chips continually. Other industries such as biopharmaceuticals and energy have drawn on the experience of the semiconductor industry to learn how to organize and develop Technology Roadmaps.