FSDA Company Limited
Distinctive Competence
project and product development audit & recommendations for remedial actions

Case Study
Internal development of novel product by a subsidiary : re-finance or kill the project ?

Our client is a European multinational developing and integrating information technology solutions.
An internal project for the development of an innovative mechatronic (precision mechanics + microprocessor + image analysis software) system, was being developed within a Scandinavian subsidiary.
Financed using the group's own funds, the problem was that the project had overshot it's originally planned schedules and budget.
Moreover, with control of the group having been acquired by an investment capital organisation, the project had originated under the aegis of the previous management.
Faced with a request from the subsidiary to inject significant additional finance to continue development work, the objective of this mission was to provide recommendations to the Group Chairman as to the viability of funding this high technology project to completion as a commercial product.

Key factors for the success of this mission were:
v dialogue with the Group General Management to understand their concerns and assimilate their desiderata
v interviews with the subsidiary's General and Technical Management, to appreciate:
- the project history - organisation, technology choices, current status
- breakdown of resources in manpower, time
- uses of funds consumed to date, & planned for the additional funds requested
- appreciate the skills and commitment of the team
v interviews with the subsidiary's Commercial Management,
- to appreciate market studies, and sales potential for the product
- to learn of targeted end-client input to design, reactions & feedback during trials
v appreciation of known competing products
- in order to assess possible differentiating factors
v identification and survey of partners able to contribute technological expertise to carry the development forward,
as well as partners who could provide distribution channels and support for the eventual product
v evaluation of minimum financial resources & conditions required to ensure successful completion of the technology to a commercialisable product
v analysis of the strengths & weaknesses of the project,
- identification of key factors for achieving a positive return on investment from the project,
v presentation of recommendations to the Group Chairman and Executive Committee.

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