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White Paper: Understanding R&D ROI in SaaS Companies

What can SaaS leaders do to effectively measure R&D efficiency, maximize the impact of tech investments, and encourage sustainable growth?

In a new white paper from OPEXEngine by Bain & Company, we define five areas of focus for SaaS organizations looking to analyze the effectiveness of tech investments and initiatives, leveraging insights from Bain & Company’s tech practice:

1. R&D ROI
2. Portfolio Management
3. Product Management
4. Talent and Organization Management
5. Execution Effectiveness

Managing R&D investment is a challenge, as R&D is often supporting short-term AND long-term initiatives, current customers AND new customer acquisition often at the same time. Investment in future growth is critical due to the competitiveness of the SaaS sector, which means making bets on how to allocate resources for the best possible return.

Although R&D is fundamentally forward-looking, given the nature of recurring revenue models, there is a natural lag in understanding the immediate impacts of these investments on revenue. In this paper, we discuss how companies looking to improve R&D efficiency should adopt an approach that incorporates strategic portfolio management, effective product management, efficient talent and organization management, and robust execution practices.

Measuring the effectiveness of these practices within the context of your organization requires a critical tool: benchmarking. Incorporating benchmarking into this strategic framework provides a basis for diagnosing performance against industry standards and peers, understanding competitive positioning, and identifying areas for strategic improvement.

As SaaS companies navigate the complexities of R&D resource allocations, the critical question becomes: how does an organization gauge the return on R&D investments?

Access the full white paper on OPEXEngine’s website.

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