Evaluating R&D performance using the cost savings metric

In today's hotly competitive business environment, most companies have Total Quality Programs operating, and are pursuing research projects to remove costs and become even more efficient in order to enhance or maintain their profit margins. The R&D `Cost Savings Ratio' (CSR) is the metric used to measure the impact of R&D on these cost savings efforts. CSR measures the reduction in cost of goods or cost of operations that are realized from technology changes. The actual calculation of CSR depends on its use - whether for internal performance measurement or external benchmarking.