The research and development laboratories were evaluated as cost centers because they did not generate revenues. However, their ability to produce output in the form of commercial products and the willingness of the internal market to commercially develope the new products were monitored. SEI had created a three-stage procedure to the bring products developed by its R&D laboratories to market. First, new products were released to the development room, which was part of R&D and which manufactured the new products in low volumes so that their long-term market potential could be evaluated. Development divisions were expected to lunch products and prove that they were capable of generating profits for the firm. These divisions were expected to break even; once a development division's revenue exceeded 5 million per month, it was either converted into a new operational division or merged with an existing one. Finally, administration departments were evaluated on their ability to reduce costs.