An Extension to a DEA Support System Used for Assessing R&D Projects

This paper describes an extension to the data envelopment analysis (DEA) support system that has been used for the assessment, rating, and ranking of diverse portfolios of research and development (R&D) projects at Lucent Technologies. The approach is illustrated through its application to a large portfolio of R&D projects considered by Lucent's Advanced Technologies Group. The method proceeds by first stratifying the portfolio into comparably efficient groups of projects through the construction of a series of efficient DEA frontiers, and then by lexicographically ranking each project within these groups relative to DEA-based contextual attractiveness measures calculated from the different partitions. The advantages to this approach are provided not only from the perspective of the specific project rankings that are produced but also from the broader managerial insights that can be derived from any resulting differences between officially sanctioned, quantitative decision-making procedures, and the quality of the decisions that have actually been made by managers