The phase-gate process (also called the phase-gate or waterfall process), is a project management technique in which an initiative or project (eg , new product development, software development, process improvement, business change) is divided into different stages or phase, separated by decision points (known as gates ).
At each gate, continuity is decided by (usually) a manager, steering committee, or governing council. Decisions are made on the basis of current estimates and information, including business cases, risk analysis, and availability of required resources (eg, money, people with correct competence).
Video Phase-gate process
History
A gradual approach to investment decisions for development emerged in large-scale projects for mechanical and chemical engineering, especially since the 1940s. One source describes eight phases. In 1958, the American Association of Cost Engineers created four standard cost estimation type classifications to match this development and approval phase. Other industries with complex products and projects take part in the process. For example, NASA practiced the gradual development concept in 1960 with a gradual project plan or so-called gradual review process . The gradual review process is intended to break any development project into a series of phases that can be reviewed sequentially in order. Review points at the end of each phase require that a number of criteria be met before the project can progress to the next phase. The gradual review process consists of five phases with inter-phase periodic development reviews. NASA's gradual review process is considered a first-generation process because it does not consider external market analysis in new product development.
The variation of the gate-phase process, known as the phase-gate process , emerges from the work of Robert G. Cooper.
The waterfall process variant appears through the publication of Winston Royce's paper on major developments, as it illustrates the work that flows down from each phase as a series of waterfalls whose work can not go back to the previous phase.
The phase-gate process is often called front-end loading or a large design up front.
Maps Phase-gate process
Phase
The traditional phase-gate process has five phases with four gates. The stages are:
- Alignment
- Create a business case
- Development
- Testing and validation
- Launch
Towards this process there are often early phases called ideation or discovery , and after the fifth phase the process usually ends with post-launch reviews. Major new products through a full five-phase process. Moderate risk projects (such as extensions and enhancements) often use a reduced 3-phase version, which combines scoping with business case phases, and evolves with the testing phase. Very simple changes (such as marketing demand) can be implemented using a lightweight two-phase process, where rollouts are rolled into development and testing as well.
Gates
Gates gives a point during the process in which an assessment of the quality of ideas is done. It covers three major issues:
- Execution quality: Checks if the previous step is executed in a quality way.
- Business reasons: Does the project continue to look like an interesting idea from an economic and business perspective.
- Action plan: The proposed action plan and the requested resource make sense and sound.
A gate can lead to one of five possible outcomes: go , kill , hold , recycle , or go conditional .
Gates has a common structure and consists of three main elements:
- Feedback : What the project manager and team provide to the point of decision. This post is specified at the output of the previous gateway, and is based on the standard menu of posts for each gateway.
- Criteria : Questions or metrics in which a project is assessed to determine results (go/kill/hold/recycle ) and make prioritizing decisions.
- Output The results of the gate-making review ( go/kill/hold/recycle ), together with the approved action plan for the next gateway, and the list of posts and dates for the next gate.
Phase in detail
Phase 0: discovery or idea
Decide what projects the company wants and can achieve. During this phase it is common for companies to take part in ideas-making activities such as brainstorming or other group thinking exercises. Once the idea-maker team has chosen the project they want to advance, it must be forwarded to the first gateway and therefore filtered by the organizational decision-maker.
When searching for new product ideas it is beneficial for organizations to look to the outside world to suggest business opportunities. Using methods such as those found in empathic designs can be very helpful. Communicating with customers to understand how and why they use the product can generate big strides in the generation of ideas. In particular, communicating with key users can provide developers with good feedback, as these customers are very likely to feel the most passionate about the product. In addition to communication with key users, it may be useful for developers to communicate with suppliers. By understanding all types of businesses that use their materials, developers may be able to act on the possibilities that have not been utilized before.
Phase 1: scoping
The second phase of the product development process is scoping. During this step the main purpose is to evaluate the products and their corresponding markets. Researchers should recognize the strengths and weaknesses of the product and what will be offered to potential customers. Competitions should also be evaluated during this phase. It is important for researchers to understand who and what is already in the market and what is potentially developed. By determining the relative threat levels of competitors, the management team will be able to recognize whether they should continue with product production.
Stage 2: build a business case and plan
Once a new product passes through the gate at the end of the scoping phase, the next phase in the phase-gate process is building business cases and plans. This is the last phase of concept development where it is very important for companies to perform solid analysis before they start developing the product. This phase is generally difficult, complicated, and resource-intensive. However, the company must exert a strong effort in this phase because it is directly related to the success and development of new products. There are four major steps that consist of this phase: definition and analysis of the product, building a business case, building a project plan, and a feasibility review.
Product definition and analysis
The first step, the definition and analysis of the product, consists of a series of activities that will provide information to define and justify the development of new products. One of the first of these activities is user needs and wants to learn where customer value is determined. It answers questions about the product like what benefits the product provides and what features the product should have. During this time the company should conduct surveys and interviews with existing and potential customers, along with staff members. Furthermore, the company must conduct market analysis. They must determine the market size and segmentation, growth rate, customer trends and behavior, and what channels reach these customers. After the market analysis is complete, the company must conduct a competitive analysis. It's important to know how your competitors are operating in addition to their strengths and weaknesses. This will not only help you build great products, but will also help determine how and where to launch your new product. Together, these activities will help determine the product and provide the foundation for the marketing strategy. Furthermore, the company must develop a technically feasible product concept, which includes the substances and methods necessary to produce a new product. Once this is done, the company can produce a production and operation cost analysis along with market cost and launch analysis. Furthermore, companies can begin to test the concepts they have developed. This is when early prototypes were developed and presented to staff and consumers to get feedback and measure customer reactions. From here the company can make the necessary changes and see the potential sales of the product. This feedback will also help the company build a solid product definition. Finally, the company will then conduct a business analysis, risk analysis, and financial analysis of the new product.
Building a business case
A business case is a document that defines a product and provides a reason to develop it. This document will vary in format between companies, but the main components are as follows: the results of activities definition and analysis of the product; legal and regulatory requirements; safety, health and environmental considerations; assumptions needed to draw conclusions made, and why they are believed to be valid and reasonable; and out-of-bounds criteria that indicate certain changes/events that will mandate an emergency business case review. This document will be referred throughout the development process and edited when necessary.
Build a project plan
The project plan includes: scheduled tasks and schedules along with timelines for milestones throughout the development process; personnel, time, and financial resources needed to complete the project; and the expected launch date for new product launches.
Feasibility review
The final step in building a business case and plan is a review of eligibility. This is when management, along with other departments of the company, review the reasons for the pursuit of the product. They analyze the information provided by the previous steps in this process to decide whether the product should move forward or not. If it is decided to be pursued then it passes through the two gates and moves into the product development phase.
Phase 3: development
During the development phase, the plan of the previous step is actually implemented. Product design and development is done, including some simple initial tests of the product and possibly some initial customer testing. Product marketing and production plans are also developed. It is important that companies comply with their overall objectives of the project, as reflected in this production and marketing plan. Doing this will allow them to determine exactly who they will market their products and how they will get the product to a target audience. The development team maps realistic timelines with specific milestones described as SMART: specific , measurable , actionable , realistic >, and time-bound . Timelines are frequently reviewed and updated, helping the team stay on task and provide management information about product progress. In the development stage, the product builds momentum as companies do more resources for the project and make full use of cross-functional teamwork because the marketing, technical, manufacturing and sales departments are all assembled to offer their expert opinions. Has diverse and parallel development phases ensuring that products continue to meet the company's technical and financial objectives. A diverse team allows special roles and leadership positions to flourish as team members contribute using their strongest attributes. With members who have a clear role, the task can be done simultaneously to ensure a more efficient development process. The final delivery of the development phase is a prototype, which will undergo extensive testing and evaluation in the next phase of the process.
Phase 4: testing and validation
This phase provides validation for the entire project. Areas to be evaluated include: the product itself, the production/manufacturing process, customer acceptance, and project financial performance. This phase includes three types of testing: close testing , field testing , and market testing .
Trial close to
The main purpose of close testing is to find bugs or problems with a product. The important thing to remember here is that the product is no longer a prototype and almost has all the features of a commercial product. Testing will be done initially by in-house staff, and customers and partners close to the company. It's important to make sure that the test has an understanding of how the product performs, so they know what it should or should not be done. Members of the research and development teams are usually present to observe participants using the product and taking notes or data that may be useful.
Field testing
Field testing , or beta testing, is performed by those who can provide valuable feedback on the product. This usually lasts for a long period of time and participants may include customers, partners, or anyone not familiar with the producing company. At this point, the product fully resembles the planned launch version in all aspects; therefore the participants' interaction level will be higher because they know all the features and benefits. During this phase there are three main goals to be achieved. The first goal is to see how many participants are interested. It is also important to note what individual attributes they like and whether they will buy the product. Next, determine how customers use the product and its durability evaluation. Confirm the environment in which the customer will use the product. Recording and analyzing customer feedback is the last step in the field testing phase. This feedback can be used to help inform the small design improvements that need to be made. The sales and marketing team will also be the recipients of field test feedback; they can use this information to help focus their sales presentations.
Market testing
Unlike the other two test activities, market testing is considered optional. Solid marketing and launch plans and confidence in the product's ability to sell help inform key decision makers at test gates and validation. If there is any uncertainty in marketing or launch plans, there are two options to consider. First, a simulated market test can be run, where customers will be exposed to new products in advertising and purchase situations. The purpose of this test is to obtain initial sales forecasts and make the necessary adjustments to the marketing plan. The second test involves the sale of an experiment, and is done through a specific channel, region, or consumer demographic.
Phase 5: product launch
The product launch is culminating the product after passing all previous gates. Producers must come up with a marketing strategy to generate customer demand for the product. Manufacturers must also decide how much they anticipate the market for new products and thus determine the size of their initial production volume. Part of the launching phase is sales training and support personnel to get familiar with the product so they can assist in selling this product. Setting the price of the product is an aspect of the product launch that the manufacturer should consider. They should avoid either undershooting or overpricing potential markets. Finally, distribution is a major decision that is part of the launch process. Choosing a distributor or value-added retailer for a product should be done with careful thought and potential sales in mind.
Having a smooth rollout process that includes effective marketing and a knowledgeable and prepared salesperson can lead to faster time to earn profits because of initial customer acceptance.
Effective gateway
Most companies suffer from too many projects in their product development pipeline, due to the limited resources available. "Gates with teeth" helps to trim the portfolio of weak development projects and deal with stuck pipelines. Also, strong innovation strategies, coupled with strategic buckets, refocus resources on high-value development initiatives.
Note that gates are not just project review points, status reports, or information updates. Instead, they are difficult decision meetings, in which go/kill decisions and critical prioritization are made on the project. Thus the gate becomes a quality control check point in the process ensuring that you are doing the right project and also doing the project properly.
Gates must have clear and visible criteria so that senior managers can make go/kill decisions and prioritize objectively. Most importantly, these criteria must be effective - that is, they must be operational (easy to use), realistic (utilizing available information) and differentiate (differentiate good projects from mediocre ones). These criteria can be:
- Must meet : Knock-out question on checklist, designed to kill poor projects directly
- Need to meet : Highly desirable characteristics that are ranked and added in the points scheme
An example list of criteria is shown below, from which a scorecard can be developed which can then be used to assess the project at the gate meeting.
- Must meet (checklist - yes/no)
- Strategic alignment (in accordance with business unit strategy)
- Possible feasibility for technical feasibility
- Meet EH & amp; S
- Positive results versus risk
- Must meet (score on a scale of 0-10)
- Strategic
- Degree to which project is aligned with the business unit strategy
- The importance of strategy
- Product excellence
- Unique benefits
- Meet customer needs better than existing or competing products
- Value for money
- Market appeal
- Market size
- Market growth
- Competitive situation
- Synergies (utilizing core competencies)
- Marketing synergy
- Technology synergy
- Manufacturing/processing synergies
- Technical feasibility
- The technical gap
- Complexity
- Technical uncertainty
- Operational feasibility
- Go to market
- Sales, marketing, and billing
- Support and operations
- Risk versus profit
- Expected profitability (eg, net present value)
- Return (e.g., internal rate of return)
- Return period
- Certainty of return
- Strategic
If the answer is "no" or "low" to many of these questions, the decision should send the project back for review, (like, to adjust the scope, timeline, funding, or solution) or to turn it off altogether.
Advantages and disadvantages
There are a number of advantages to using a gate-phase process for product development, which usually results from its ability to identify problems and assess progress before project conclusions. A bad project can be quickly rejected by the use of a disciplined process. When using the process of phase-gates on large projects, the process can help reduce the complexity of what can be a major innovation process and limit it to a direct rule-based approach. When a phase-gate process combines cost and fiscal analysis tools such as the current net value, an organization can potentially be given quantitative information about the feasibility of developing a potential product idea. Finally, this process is an opportunity to validate an updated business case by the project executive sponsor.
One problem with the gate-phase process is the potential for structural organizations to interfere with creativity and innovation, because overly structured processes can cause creativity to diminish in importance and hamper a largely iterative innovation process.
Opportunity management
The opportunity management funnel is a visual representation of phase-gate decision making. Opportunity management has been defined as "a process for identifying business and community development opportunities that can be implemented to maintain or improve the local economy." Opportunity management components are:
- Identify opportunities.
- Evaluate and prioritize these opportunities - This may involve developing alternative criteria, considerations and ratings.
- Driving opportunities - Involves appointing prospects, accountability, action plans, and project management
- Constant monitoring - May require one of the following actions:
- Advanced - Commit additional resources to move ideas forward
- Rework - Investigate/rethink further
- Kill - Stop working on the idea and continue
The goal of the opportunity management funnel is to eliminate weak or bad ideas before money or resources are contributed to realize these opportunities. The benefit of the opportunity management funnel when utilizing phase-gall decision making is that the funnel produces efficiencies where weak ideas are efficiently eliminated leaving a powerful set of strong alternatives. To fulfill its mandate, the opportunity management funnel filters the widest possible opportunities and ensures that all priority sectors are represented. When choosing opportunities to filter through the process, the economic developer must realize that initially, there are no bad ideas or constraints. An irreversible alternative will be filtered throughout the process using a phase-gate decision-making process
References
Source of the article : Wikipedia
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