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Question: What tools are used currently to justify innovation projects? Is the finance function responsible for implementation of these tools? Least one APA reference and citation
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Innovation projects are required to be justified before implementing them in the real-time scenario. This is because every innovation programs require investment from the management and hence the return on investment should be enough that the innovation project is justified. The justification of innovation projects comes from the exact IRR and ROI it gives upon launching, The ROI is the return on investment that is generated upon the execution of an innovation program. The IRR is the internal rate of return, which is supposed to be higher in the case of ideal and effective innovation projects. So, in the present day the PMS and IRS software tools are effective for justifying innovation projects.
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