The Stage-Gate Model/phase-gate process

Revision as of 21:29, 23 February 2019

Abstract

Developed by Bashir Isse

The stage-gate model which is also called phase-gate process is a project management methodology that is used to create a project from an idea-to-launch in a structured way. The model contains several decision-making points, known as gates and involves senior management that take decisions regarding the course of the project. The stage-gate model is created by Robert G. Cooper in 1980's to help companies manage the product development process more efficiently. The model was adopted to manage a variety of projects like process improvements and process changes and is regarded today as a general project management methodology with multiple variations. The model is today a registered trade mark at Stage Gate Inc. a company founded by Cooper and Edgett. The model is considered the ‘industry standard’ and is the world’s most widely benchmarked, referenced and implemented innovation management model. ^[1]

Background history

The Model

A project is started up with a decision to meet the customer's needs, expectations and requirements. This must be reflected in the specifications provided by the project sponsor in the project objectives that the project must fulfill. The model that is to be used depends on the composition that the requirements have. The model specifies the different phases that the work must go through and the requirements that have been set, based on the deliveries that the individual phase must deliver. There should be a working model that ensures the control of the work being carried out. The project manager is responsible for ensuring that the project meets all the requirements that are made, and the project manager is also responsible for proving it. To start a specific phase of a project, there must be a (Gate) which is a decision model that describes how the project should be controlled, to make the right business decisions in and around the project. A project should always have a responsible (project sponsor) for the project's business aspects, which can make the overall decisions regarding the project's limitations and goals. Gate decisions are taken outside the project by the project sponsor. Gate decisions have always higher priority than project decisions taken internally in the project.

Stages

The stages often consist of activities that approximately follow the same course, where the data is firstly collected, integrated and analysed [3]. Cooper (2008) mentions several key characteristics that are to be taken into consideration when identifying the stages[7]:

1. Each stage should strive to reduce endogenous and exogenous uncertainties and risks. For the stage information requirements guide the team in their way-of-working.

2. Each stage is more costly than the preceding one. Combined with the element (1) above, this means that there exists a trade-off between uncertainties and risks on the one hand, and costs on the other hand (see figure 1)

2. Activities within stages are undertaken in parallel (as much as possible)

3. Activities are conducted by a diverse team of people from different backgrounds

4. Each stage is cross-functional; so no departmental focuses are present

The idea of a Stage-Gate Process is that the project is divided into in a prearranged set of stages. These stages are composed of groups of related activities which are often conducted in parallel and end in 'Gates'. Gates are characterized as containing a set of deliverables or inputs, a set of criteria, and an output.

It often provide a point during the process where an assessment of the quality of an idea is undertaken and typically includes three main issues:

Quality of execution: Which checks whether the previous step has been executed in qualitivly. Business rationale: Is the project an attractive idea from an economic and business perspective. Action plan: The proposed action plan and the requested resources reasonable and sound.

Formation of stages & gates

Genarally the Stage-Gate model is composed of four to seven stages and gates. An example of it can be seen in figure XX

Discovery stage:

The development process is initiated by a new product idea, which is submitted in gate 1.

Gate 1: Idea Screen

The idea screen is typically the first decision taken wether resources should be commited by the company to the specific idea of developing a new product. This is generally a soft decision, considering that the uncertainty is still high and will typically be followed by a second screen later in the process. The project is evaluated principally on a criteria about the alignment with the general strategy and the company’s core business, as well as the viability of the idea and the opportunity it offers where the the market attractiveness is taken into consideration. If the decision ends with a GO, it marks the beginning of a new project.

Stage 1: Scoping

The reason for this stage is to make a preparatory assessment of the project, so that a re-evaluation of it can be conducted better at gate 2. The assessments at this stage is more qualitative than quantitative. Especially, two types of assessments are essential: a preliminary market assessment and a preliminary technical assessment. Information about the market will be gathered in the market assessment and the potential future market position of the product including the market acceptance and the potential market size. while the technical assessment will respond to questions about the product’s manufacturing viability including an estimation of costs and the time of production.

Gate 2: Second Screen

The second screen decision is resembels the decision on the idea screen gate with the consideration of the most recent information gathered from the stage 1. At this gate supplementary criteria may be added, depending on the stage 1 discoveries, as well as additional achievments for the next gate, should the decision be a GO. At this gate the economic viability of the project is assessed based on the input that is provided, preliminary technical assessment.

Stage 2: The business case is build

At this stage the project is clearly defined. A variety of analysis are undertaken which icludes a detailed market analysis, technical analysis and financial analysis. The market analysis is mainly focused on what the customers prefer and how the new product will satisfy their needs. A complete competitive analysis is undertaken and concept testing is used to determine the customer acceptance. The technical analysis consists of the definition of all technical requirements for the manufacturing of the product, potentially including some design or laboratory work to completely define the manufacturing viability. A precursory development plan and an operations analysis is executed. furthermore, investments that are necessary are estimated, both in terms of changes in the current production but also in terms of legal or patent work. The financial analysis should also be detailed including a sensitivity analysis.

Gate 3: Go to development

Gate 3 is of a great significance which is a very important decision gate as it is the final checkpoint before the development phase. A substantial amount of resources is required at this gate. Moreover, a careful examination of all the information is conducted which includes the validity of the information that have been submitted. if a GO decision is selected it must also be followed by strategic decisions regarding potential choices about the new product e.g. about the final features of the product, the market segment that is the target and so on. Stage 3: Development

Stage 3: the development of the product takes place, so potential authorizations are granted (legal, patents, etc.), detailed plans are also produced, and actual financial/cost analysis is completed. Testing plans are also prepared to be examined at the upcoming gate.

Gate 4: Go to testing

At this point the development process is assessed and it is certified that the new product lives up to the existing quality and plans. Necessary changes are determined at this point, concerning the development process but also in terms of the financial analysis.

Stage 4: Testing and Validation

Validation and Testing are the main tasks that are carried out at this stage, where aiming at validating that the product is of a certain quality that the expectations of the customers as defined at the design and plan of the previous stages are met. The validation and testing stage can include in-house testing of the product, user and field trials, pilot production and market tests. In addition, if it is considered essential a revision of the financial analysis is conducted. At this stage a detailed marketing plan is also completed.

Gate 5: Go to Launch

This is the final approval before launching the product. At gate 5 the results from validation and testing are revised and the quality of the validation and testing stage is approved. ultimately, the detailed marketing plan as well as the operations plan are approved at this gate.

Stage 5: Launch

The commercialization of the product is realized at this stage and all plans are put into motion.

Post launch review:

The post launch review is a review of the whole process and the new product which becomes now part of the product portfolio of the company. An internal audit is executed to evaluate the product development process and to pinpoint its strengths and weaknesses, so that the process can be improved in the future. Lessons learned are gathered and stored. Moreover, a complete review of the new product and its launch are completed. Financial, market and performance data are gathered and compared with the analysis predictions from the previous phases.

Application

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Limitations

Annotated Bibliography

References

^[2]

1. ↑ R. G. Cooper and S. J. Edgett, “Stage Gate Inc.” [Online]. Available: https://www.stage-gate.com/. [Accessed: 23-Feb-2019].
2. ↑ Template:Cite book