Stage-Gates™ are a critical component of project selection. A winning portfolio must contain winning projects, therefore the project governance board must be able to discriminate between good projects and great projects. The decision gate process enables the project governance board to review these projects based on preselected strategic criteria at the gate reviews of the decision gate process. At each of those gates, important project information is provided to the project governance board to make a go/no-go decision related to the project. Without this mechanism, unnecessary or poorly planned projects can enter the portfolio and bog down the work load of the organization, hampering the benefits realized from truly important and strategic projects. There are eight reasons for developing a decision gate process, and Part 1 looks at the first four reasons:
A Stage gate process functions as a filter to screen out poorly aligned projects. Every organization will have more projects than it can execute, which requires the PMT to carefully select which project enter the portfolio. Some projects may look good on paper but are completely misaligned from the organizational objectives and strategies. When organizations have well established evaluation criteria, decision gates are an excellent way of filtering out these misaligned projects.
Stage gates are also a valve to control the number of projects entering into the portfolio. Even if every proposed project is a winner, the organization still has limited capacity to execute the work. Therefore, projects need to be initiated at the right time so that the organization is not overloaded with work. This process works in parallel with portfolio planning (discussed in the next chapter) to authorize projects at the right time.
3. Enables management to direct (steer) the scope of project work
Stage gate reviews afford senior management an opportunity to direct the scope of projects. There will almost always be more than one way to execute a project. Mature and successful organizations review the statement of work for each project and identify “must have” versus “nice to have” components of scope. This is important because it gives the PMT options when selection projects and does not force them into making “all or nothing” decisions.
4. Evaluate and prioritize workload
Stage gate processes provide decision makers with project deliverables that contain key project information. The deliverables themselves ensure consistency in the process and helps ensure that a good project plan is in place. This information also directly feeds the prioritization process (which will be discussed in a later chapter). Without good project information, prioritization is inconsistent and poorly conducted. This information also helps the PMT commit the right resources to the right projects at the right time.