Cost Management Method of R&D Group at Sumitomo Electric Industries, Ltd.

Abstract

It used to be that R&D expense management was performed separately for each work, each department of any other corporate organization, not for each R&D theme.Recently, however, expense management for each R&D theme become more and more and important for the following reasons:(1) to maintain a close watch on budget management.(2) to clarify the investment and outcome of the research for R&D project evaluations.(3) to counter taxation on increased sales by the R&D Group thanks to successful inner corporate ventures.Since 1969, the R&D Group of Sumitomo Electric has studied this problems and developed both a budget projection system and an expense record system which function in conjunction with our company's accounting system. Now, about 300 R&D themes are under expense management by computers.We will explain the contents of these two systems, inner corporate venture systems, evaluation methods of R&D projects, countermeasures to taxation and other issues.