Phases & Gates

Phases & Gates is one of the most popular methods of project management. Business firms and companies adhere to this method to invest or stay afloat in highly competitive, existing markets.

Phases & Gates first identifies a market opportunity and aims to transform it into a sellable product. The main focus of this methodology is to deliver a high-performing product. Products are evaluated using the following criteria:

  • Market share

  • Sales growth

  • Customer use

  • Profits objectives

Products which fit these requirements can realize the following performance objectives:

  • A unique competitive advantage

  • A strong financial performance

Phases & Gates can also be used to create the updated version of an existing product. The needs of the clients change over time, and if a product fails to improve on itself, clients could buy a competitor's product. This shift in the client’s preferences becomes especially apparent in globalized markets.

The complexity/length of Phases & Gates is both its strength and weakness. Ultimately, this methodology is designed to save time and resources in advance. Regular testing in all steps of the process ensures that the product meets the needs of the target audience.

Because it is focused on enhancing a company’s competitiveness in a market, Phases & Gates is typically used by companies that wish to achieve an optimal “time to market”: their priority is to launch a functional product on the market as soon as possible. In project management terms, this often means that the focus is on an optimal time/effort ratio rather than on cost. However, Phases & Gates remains adaptable; its requirements can also be shifted to focus on an optimal quality/cost ratio.

Phases & Gates can be divided into six phases. An ordered list of activities is scheduled for each phase. Depending on the product development strategy, some of these steps may be merged or skipped entirely.

Phases & Gates should not be mistaken for a linear succession of activities. The Product Manager must remember that the development strategy goes through Phases; each Phase can incorporate new activities and reorganize the way tasks are distributed. After each Phase, there is a decision point called a Gate, which must be passed through before the next Phase can begin.

Phases & Gates differs from other Project Management methodologies partly because it relies on a Product Manager to oversee the project. The Product Manager should appoint a subordinate to the position of Project Manager. In smaller budgets, the roles of the two managers can overlap:

  • The Product Manager launches the phases and remains the main operator from a global perspective.

  • The Project Manager takes care of the Phases & Gates on a conceptual level. He/She manages the technical department and can designate assistants.

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The Project Manager's influence usually continues to increase from the beginning of the project through the market testing phase. He/She can be expected to plan strategies, establish a budget, or evaluate the progress. Several models of integration exist:

  • Traditional functional structure: The product manager has to manage the project according to the rules and procedures that have been previously adopted.

  • Lightweight product manager: The product manager has less power in the development of the product. His/Her main objective is to ensure that everything is working properly and is on schedule according to the deadlines set.

  • Heavyweight product manager: The product manager is responsible for the entire product development process but is not involved in marketing the product.

  • Project execution/team structure: The functional managers take on a part of the work a product manager has to do. In some cases the functional managers are the only ones in control of product development.

The Product Developers aim to create a more globally-oriented product. They:

  • anticipate global-friendly strategies,

  • standardize the main part of a product to minimize the parts that may need modifications in the future,

  • apply international standards to the product (and reengineer it, if need be),

  • evaluate the behavior of global competition, and

  • manage the workflow of the next global product.

The Phases & Gates methodology is extremely customizable; depending on the company and the content, the number and nature of the Phases and Gates may vary.

The exact nature of a project should be decided very early in the process. Depending on the type of project chosen, some phases may be omitted. The following are examples of development types for new products:

  • New-to-the-world product – A truly innovative project, new to both the market (never commercialized) and the company (never produced). No step of the New Product Development methodology can be skipped.

  • New product line – A product already present in the market the company wishes to enter.

  • Additions to existing product line – A new variation (weight, color, functionality, etc.) that supplements a range of offerings.

  • Repositioning – An adaptation of the product to a new market segment.

  • Improvements and revisions to an existing product

  • Cost reduction item

Phase 1 - Idea Phase

The project has not yet officially started; the company is looking for information and ideas.

The responsibilities of this phase relate to the company’s Product Team, which consists of:

  • A Product Manager, who initiates the development of a new product in the company. He/She defines the product’s primary characteristics and can also cancel the product. As the product’s creator, he/she can also name Collaborators.

  • Collaborators, who contribute their opinions and knowledge to the project’s database. This group usually encompasses a great variety of resources:

    • Employees and consultants

    • Distributors and suppliers

    • Market research reports, newspapers, etc.

The Idea Phase goals are:

  • To define and create the project -  The Product Manager must determine to which category his/her project belongs (e.g., New-to-the-world product, New product line, etc.). Sometimes a project can evolve to the point that it may switch from one category to another. In these cases, the Product Manager is advised to close the project and review it. The reassessment can help in building a new project in the most appropriate category.

  • To gather documentation and research - The Product Manager has named a team of Collaborators to work with him/her. He invites them to contribute their documentation to the project’s archives. They can also request additional information regarding the project. Frequent outputs include Market, Technical and Financial assessments.

  • To generate ideas - The Project Manager can reach out to individuals and have them contribute their ideas through a shared platform. The Product Manager can also plan focus groups to encourage creative input. He/She names a Collaborator as a facilitator for the group. The groups employ several methods: Brainstorming, Team-building exercises, Mind-mapping, etc. Throughout this brainstorming process, Collaborators are invited to compare and rate ideas through the platform they share.

The Product Manager controls the state of the project—that is the Phase or Gate the project is currently in. Estimations for the beginning and end of future Phases and Gates can be entered into a Gantt Chart, but these are expected to change as each Gate is passed and as the project moves on from Phase to Phase.

The Product Manager must decide:

  • when the Idea phase should end, and

  • what the criteria will be for reaching the next Gate.

To do this, the Product Manager defines a number of deliverables for the Phase. Deliverables for other Phases and Gates can also be planned for, but they usually evolve as the project moves from one Phase to the next.

Frequent deliverables for the Idea Phase include the following:

  • Ideas from different fields

  • A review of the available documentation on the topic

  • An identification of market needs and competing technologies

Moving on to Gate 1

Throughout the Idea Phase, the Product Manager who created this New Product Development has been tracking the time, cost, and effort involved in the process. He/She decides when the phase should be completed. This could happen for any reason of his/her choice:

  • Once a certain deadline has passed (time)

  • Once the Phase has spent its budget (cost)

  • Once all the scheduled activities have been completed (effort), etc.

When the Product Manager marks the Idea Phase as “completed,” the project has reached Gate 1.

Gate 1 - Idea Screen

The generated ideas have to go through a screening process in order to identify those that are viable.

Gate 1 has a number of predefined criteria. These criteria are not defined by the Product Manager but by the Gatekeepers, a team external to the project. This team is usually made up of Senior Product Managers, but it can also include internal management and outside experts.

The Product Manager still manages the Gate on an administrative basis. He/She oversees the presentation of each deliverable.

In order to avoid ideas that are either costly and/or unfeasible, the company should expand its team of Collaborators to include those coming from other businesses.

Each idea is judged and rated by the Collaborators and Gatekeepers according to several factors, including but not limited to:

  • Market/customer strategic fit, competitive advantage

  • Technical feasibility and risks, critical success factors

  • Legal/Regulatory compliance

Only a few ideas will survive this screening process. Competition, legislation, and changes in technology influence a voter’s decision.

The Gatekeepers consult the results of the voting and assess how each idea is rated. At this time, the project can have the following status:

  • PLANNED - This state usually means the Gate Analysis is currently ongoing. If the project looks viable but there is no more need for it on the market, a Gatekeeper sets it aside and retains it as a “planned” project. The project is stopped but may restart at any time if a market demand for it arises.

  • REWORK - The project does not look viable yet: the Idea Phase has not accomplished all its goals. Because the project still looks promising, it remains a high priority. The Idea Time will continue for the time being.

  • APPROVED - The project looks viable. Market/customer analyses are also encouraging.

  • CLOSED - A Gatekeeper can also close the project if it does not look viable. It will be permanently shelved.

If and only if the Gatekeepers are satisfied with the amount of ideas and research collected can the Product Manager propose a project definition and a preliminary plan for the next Phase, which includes the following:

  • Objectives, Major milestones

  • Schedules, high-level Work Breakdown Structures

  • Resource requirements

Once this plan is accepted by the Gatekeepers, he/she marks Gate 1 as “approved,” and the project moves on to the next Phase.

Phase 2 - Scoping

This is the official start of the project. The ideas that made it through Gate 1 are now going to be viewed and presented in terms of business opportunities.

The Product Manager who created this potential New Product Development must decide whether he wishes to remain as the Product Manager. Very often a Collaborator may take over the role of Product Manager. He/She monitors the Scoping Phase and assumes full responsibilities for the project.

The Scoping Phase goals are:

  • To build a concept of the product - The idea of a product evolving into an actual concept has to be translated into meaningful consumer terms. The consumer should be able to visualize the product simply and accurately. This involves two activities:

    • Concept Testing - The Product Manager assembles a group of customers who fall within the targeted parameters. The Product Manager then presents to the group several formulations of the product’s concept and asks them which ones sound best.

    • Conjoint Analyses - The Product Manager takes the same groups of customers and presents them with the concepts of alternative products. Their reactions are rated in the same way as in Concept Testing.

  • To identify the project’s market gap - A “market gap” gives an indication of the number of potential customers who are not yet using a particular type of product. Depending on the size and reachability of the market gap, the Product Manager then decides on the project’s scope.

  • To outline a marketing strategy - Once the concept is finalized, the Product Manager must propose a three-fold marketing strategy to the upper management. This involves:

    • Determining the target market’s size, structure, and behavior. (Sales size, market share, and profit goals must be derived from the assessment.)

    • Planning a price and distribution strategy aligned with the first year’s marketing budget

    • Determining the evolution of sales and profits over subsequent years and the possible implications for the marketing strategy.

Frequent deliverables for the Scoping Phase include:

  • A product mock-up, technical and managerial assessments

  • Prospective cost analyses, focus group reports

  • The regulatory environment’s assessment, the legal definition of the product and its patents.

Gate 2 - Second Screen

Viable ideas now need to be compared in terms of merit. A concrete, feasible way of making the product must be defined.

Gate 2 has a number of predefined criteria, which are once again chosen by the Gatekeepers. The Product Manager still manages the Gate on an administrative basis. He/She oversees the presentation of each deliverable. The company should expand its team of Collaborators to include members of upper management so that they can keep the team informed of the company's limitations in terms of resources and production.

While Gate 1 tried to identify ideas that were feasible and interesting, Gate 2 tries to determine those which are the most promising and realistic. The Gatekeepers must determine the ideal way of making this product. These ideas are rated in terms of many variables, which include (but are not limited) to the following:

  • Degree of strategic fit/leverage and importance to the company

  • Likelihood of technical feasibility

  • Likelihood of commercial success

These evaluations allow the Gatekeepers to define thresholds: the “Must Meet” and “Should Meet” criteria for the product. This phase concentrates on the “Must Meet” criteria. The “Should Meet” criteria will become more relevant in Gate 3.

The Gatekeepers consult the results of the voting and assess how each idea is rated. At this time, the project can have one of the following statuses: Rework, Planned, Approved or Closed.

Once the plan is accepted by the Gatekeepers, the Product Manager marks Gate 2 as “approved” and the project moves on to the next Phase. He/She must also plan the next Phase through a Work Breakdown Structure (identified resources) as well as the other upcoming Phases (generic resources).

Phase 3 - Business Case

The Business Case compares a project’s strengths and weaknesses to those of other New Product Development opportunities.

No changes need to be made: the Product Manager gets full responsibility for the project. He can, of course, still designate Collaborators.

The company’s Marketing Department has converted its analysis of the market into sales revenues and related marketing costs. Now the operating costs and profit analysis must be reviewed.

The Business Case can involve many different activities, which include:

  • Gathering the necessary data, performing the technology analysis, as well as doing the modeling and experimentation

  • Researching the size and geography of the market and assessing its potential for growth

  • Preparing the Research and Development plan for the Development Phase

Frequent deliverables for the Business Case Phase include:

  • Results of experimental work done to assess the technical feasibility

  • Results of commercial applications assessments

  • A schedule for the Development Phase

Gate 3 - Decision to develop

Each company can only create a limited number of new products; this Gate is what makes or breaks the project. The project will now be analyzed in the context of the company’s entire Product Portfolio.

This Gate’s responsibilities are organized the same way as in Gate 2.

There are many questions that need to be answered at this point, one of the most important being whether or not the product is marketable. It needs to be decided whether or not the product fits with the company’s objectives, if it is legally feasible, and whether the technology is available to produce it.

The portfolio needs to be analyzed through a rating system and a clear hierarchy of priorities established.

The Gatekeepers consult the results of the voting and assess how each idea is rated. At this time, the project can have the following statuses: Rework, Planned, Approved, or Closed.

Once this plan is accepted by the Gatekeepers, the Product Manager marks Gate 3 as “approved,” and the project moves on to the next Phase. He/She must also plan the next Phase through a Work Breakdown Structure (identified resources) as well as the other upcoming Phases (generic resources).

Phase 4 - Development

This is the most concrete part of the project. Resources have finally been allocated; the Research and Development can start.

Now that the company is actually making the product, the number of scheduled activities will start to skyrocket. Some responsibilities need to be delegated:

  • The Product Manager still oversees the project from afar and answers to the upper management. If there are any leftover activities from previous phases in need of completion, the Collaborators must come to the Product Manager. The Product Manager chooses a Registered User and appoints him/her to the position of Project Manager.

  • The Project Manager is in charge of development on the technical level and, as such, can schedule activities and allocate resources from the company. Because of this, most of the work done in the Development Phase has to receive the go ahead from the Project Manager.

Some variations may apply: it’s up to the Product Manager to determine how many responsibilities and how much clearance a Project Manager actually gets for this Phase and the next.

The Project Manager has to coordinate a great number of activities. All of these have to do with transforming the Product’s concept into a reality. Frequent activities include the following:

  • Making a number of prototypes and comparing them

  • Refining the technology specifications or information requirements

  • Identifying the issues related to the scale-up of the prototype’s design in order to field test the unit

Frequent deliverables for the Development Phase include the following:

  • Field testing results and validation of performance capabilities

  • Verified computer models, databases, and technical reports

  • Revised estimated cost-to-completion

Gate 4 - Decision to test

This Gate mainly verifies the actual feasibility of the project when compared with the product’s concept.

This Gate’s responsibilities are organized in the same way as in Gate 2.

The Gatekeepers must answer a variety of questions, including the following:

  • Have the prototypes achieved the desired technical and performance specifications?

  • Has a project partner been selected to field test the technology?

  • Has a commercial partner been identified? Does the commercial partner have a business plan?

The Gatekeepers consult the results of the voting and assess how each idea is rated. At this time, the project can have one of the following statuses: Rework, Planned, Approved, or Closed.

Once this plan is accepted by the Gatekeepers, the Product Manager marks Gate 4 as “approved,” and the project moves on to the next Phase. He/She must also plan the next Phase through a Work Breakdown Structure (identified resources) as well as the other upcoming Phases (generic resources).

Phase 5 - Testing

This Phase mainly verifies the marketability of the project.

No changes need to be made; however, at this point, the Project Manager’s influence and clearance usually increase. The Project Manager’s familiarity with the new product’s development conception history involves him/her in the company’s Quality Control. The Product Manager still oversees the Testing Phase from afar.

The Project Manager has to coordinate a great number of activities. All of these have to do with testing and verification. Frequent activities include the following:

  • Selecting the potential plant sites for testing and building a field test demonstration unit

  • Developing new specifications through prototype development and field testing

  • Obtaining feedback from potential end-users on product performance

Frequent deliverables for the Testing Phase include the following:

  • Field testing results and validation of performance capabilities

  • Final technology specifications (e.g., process flow diagrams, instrumentation diagrams, equipment specifications)

  • Commercialization Plan or Information Dissemination Plan

Gate 5 - Decision to Launch

This Gate aims to match the product’s original definition with what was eventually created in the Development Phase.

This Gate’s responsibilities are organized in the same way as those for Gate 2.

Gate 5 tries to maintain cohesion between the product’s origins and what it eventually evolves into.

The Gatekeepers should answer a variety of questions, including:

  • Was the performance of the scaled-up technology successfully validated?

  • Have project costs been revised following field testing?

  • Have all legal, regulatory, and compliance issues been resolved?

The Gatekeepers consult the results of the voting and assess how each idea is rated. At this time, the project can have one of the following statuses: Rework, Planned, Approved, or Closed.

Once this plan is accepted by the Gatekeepers, the Product Manager marks Gate 5 as “approved,” and the project moves on to the next Phase. He/She must also plan the next Phase through a Work Breakdown Structure (identified resources) as well as the other upcoming Phases (generic resources).

Phase 6 - Launch

This Phase mainly deals with the product’s commercialization and availability on the market.

No changes need to be made; however, at this point the Project Manager’s influence and clearance usually increase. The Project Manager’s familiarity with the new product’s development conception history involves him/her in the company’s commercial strategy. The Product Manager still oversees the Launch Phase from afar.

The Project Manager has to coordinate a great number of activities. All of these have to do with satisfying the wishes and needs of the retailers and customers. Frequent activities include:

  • Releasing engineering designs

  • Documenting quality and manufacturability

  • Developing engineering and technical support infrastructure, etc.

Frequent deliverables for the Launch Phase include:

  • Technical support overviews

  • Reports of meetings with lead customers and customer satisfaction polls

  • Profitability tracking and funds reports

Gate 6 - Post-Launch Review

Regardless of the project’s success or failure on a commercial level, a review should be written. This will help other Product Managers as they try to launch other projects.

The Gatekeepers can define a number of criteria for rating the project’s completion. However, it’s usually up to the Product Manager to write the post-launch review. The Project Manager can bring some insight into the development process. The number of Collaborators can also be extended to include new customers.

This review compares the project’s history to that of the company’s other projects in terms of success and efficiency. The Product Manager tries to identify good and bad practices and his/her assessments can be applied as lessons learned for future New Product Development projects. The Product Manager’s review is saved in the product’s database and can be consulted by the Registered Users who have access to it. It can, then be used to help other Product Managers manage their ideas and projects more successfully.

The Gatekeepers should answer a variety of questions, including but not limited to the following:

  • Have cost/sales goals and return on investment criteria been met?

  • What new needs or markets can be addressed by product spin-offs?

  • Are the ultimate benefits obtained by the customer consistent with our estimates?

The Gatekeepers consult the results of the voting and assess how each idea is rated. At this time, the project can have one of the following statuses: Rework, Planned, Approved, or Closed.

A Gatekeeper can also close the project if the product’s commercialization contradicts all projected results. Its production will then be stopped as soon as possible.

If and only if the Gatekeepers are satisfied with the collected deliverables can the Product Manager (with the help of the Project Manager) define a number of “Lessons” to be learned from the project. These lessons can help define new methodologies for the company or even for the overall market sector at large.

Once the Product Manager’s review is accepted by the Gatekeepers, he/she marks Gate 6 as “approved,” and the project can be closed.

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