Using Stages and Gates to Keep Projects & Portfolios Healthy
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Using Stages and Gates to Keep Projects & Portfolios Healthy

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Presentation slides from APMG-International webinar on using stages and gates to keep your projects and portfolios healthy.

Presentation slides from APMG-International webinar on using stages and gates to keep your projects and portfolios healthy.

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Using Stages and Gates to Keep Projects & Portfolios Healthy Using Stages and Gates to Keep Projects & Portfolios Healthy Presentation Transcript

  • APMG-International Webinar Using Stages and Gates to keep your Projects and Portfolios Healthy Tuesday 10 September 2013 / 11:00 EDT Presented by Alan Boyce SOMOS Consulting Group www.APMG-International.com 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 1
  • Agenda • Welcome & Introduction – David Smyth, Marketing Manager – Canada APMG-International • Using Stages and Gates to keep your Projects and Portfolios healthy – Alan Boyce • Q&A • More Information • Close 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 3
  • Presenter: Alan R. Boyce • Senior Management Consultant and Trainer • Consulting, Delivery, Management – Projects – Programs – Portfolios – Operations – Technology • Over three decades adapting best practices – Addressing real-life customer problems – Achieving business results • Direct Experience – Information Technology – Product Development – Software Development – Telecommunications – Aerospace and Defence – Life Sciences and Research B.A.SC., MBA, P.ENG., PMP, CMC, P2P, MOP 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 4
  • SOMOS Consulting Group • Management and Technology Consulting • Customers include – Governments – IT Organizations – Aerospace and Defence • Practice Areas – Management Consulting – Project and Portfolio Management – Information Technology Services • Accredited Consulting & Training Organization (ACO & ATO) – PRINCE2®, MSP®, MoP®, P3M3® – First in North America • An SEB Company since 2013 1990 1995 2000 2005 2010 2015 In Business Consulting Practice Started Training Practice Started First PRINCE2® Training First North American Accredited Consulting Organization (ACO) Microsoft Partnership Accredited Training Organization (ATO) Acquisition by SEB Inc. Acquisition of QLogitek, Inforica 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 5
  • Objectives and Overview • Objectives – Gain a basic understanding of the control processes of Stages and Gates • Outline – Origins – How Stages and Gates Work – Relation to PRINCE2 and MoP – Adapting Stages and Gates to an Organization – Conclusions 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 6
  • Origins of Stages and Gates in Projects 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 7
  • Too much independence can become out-of-control Motivations Unlimited ideas Optimism and best intentions Executives want to know a status and progress Managers need some independence to manage Projects that are failing should be cancelled Managers want to make good decisions Limited funds, resources, time Things don’t always work out as expected Determining a project’s real status can be challenging Easy to be carried away by a project’s inertia Natural to avoid tough decisions 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 8
  • Structure and Processes for Good Decisions • Strategic Decisions – Project Approval / Cancellation • Operational Decisions – Measuring Progress – Adjust Expectations and Plans – Make Adjustments • The Resulting System Should – Enable decisions based on facts and evidence – Support clear decisions and communications – Be successful with imperfect or incomplete information – Allow informed decisions before a significant investment – Integrate naturally with the natural flow of the project – Require little additional effort from the delivery teams 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 9
  • Evolution of Practice of Stages and Gates Common Sense • Walk then run • Test the waters Structured Development • SDLC Stage-Gate® Process • Formalized • Dr. Robert Cooper Wider Adoption • PRINCE2® • MoP® 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 10 Phased Tests • Prototype • Market test
  • How Stages and Gates Work 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 11
  • • Slice the effort into Stages – Discrete chunks of work – Logical breaks where performance can be seen • Establish clear decision points or Gates at each Stage end • At each Gate – Evaluate the on-going viability – Decide to approve next Stage, or change it, or cancel – Resources and funds released only for the next Stage The Basic Process 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 12
  • Rationale • Project expenditures typically follow the S-Curve • Our understanding follows the same curve – Project challenges – Team Capability – Validity of assumptions • Decisions to cancel made early mean less is discarded $ 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 13 $ $ $ $ $ $ $
  • Why Both Stages and Gates? • Stage spans a period of time – Starts only if Gate authorizes – Investment is limited to the budget for the Stage – Tasks are performed – Performance is measured – Future Stages are re-planned • Not simply a time-slice • Gate is a point in time – Managers’ decision point – Review status at end of Stage – Assess the on-going viability – Compare with other demands • One of two outcomes – An initiative may continue – Or it may not continue • Not simply the end of a Stage 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 14
  • Investment Decisions Funnel 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 15
  • What the Gates Really Mean Some projects are sent back for rework 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 16 Some projects are cancelled!
  • How the Stages Relate to Funding 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 17 Stage 1 (Concept) Stage 2 (Evaluation) Stage 3 (Planning) Stage m (Delivery) Stage n (Delivery) G1 G2 G3 Gm
  • Project Mix Over Time 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 18 Projects In Delivery In Third Stage (Planning ) In Second Stage (Evaluation) In First Stage (Concept) T0 T1 T3T2
  • When Stages and Gates Go Bad 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 19
  • Without Gating 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 20 T0 T2 T3 T4 T5
  • Rethinking The Gate 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 21
  • Relation to PRINCE2 and MoP 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 22
  • Application in Portfolio and Project Decisions • Portfolios – Investment Board manages the strategic allocation of resources between projects – Many go/no-go decisions are made before project starts – After project starts, few decisions regarding go/no-go – Day-to-day decisions delegated to the PM • Projects – Project Manager manages with the resources allocated to the project – Decisions made outside the project to start or terminate it – After project starts, periodic go/no-go decisions are needed – After project starts, PM’s decisions are made daily 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 23
  • Stages and Gates in Projects and Portfolios Portfolio Delivery / MoPPortfolio Definition / MoP Project Execution / PRINCE2 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 24
  • Practices within Management of Portfolios (MoP) Management Control Portfolio Definition Portfolio Delivery Categorize Prioritize Balance Plan Understand Benefits Management Financial Management Risk Management Stakeholder Engagement Organizational Governance Resource Management 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 25
  • Balance Using Gates During Portfolio Definition • Rank candidate initiatives – Financial analysis – Risk in delivery – Expected benefits – Political considerations • Ensure portfolio is balanced – Strategic objectives – Interdependencies – Timelines – Available resources – Wide consultation Portfolio Definition Categorize Prioritize Balance Plan Understand 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 26
  • Using Gates During Portfolio Delivery • Most practices during Portfolio Delivery involve control gating • Tolerance limits and escalation paths are established • Costs of initiatives are measured against budgets • Supply and demand of resources are managed • Benefits are re-forecast • Business cases are updated Management Control Portfolio Delivery Benefits Management Financial Management Risk Management Stakeholder Engagement Organizational Governance Resource Management 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 27
  • Principles of PRINCE2 TAILOR TO SUIT PROJECT ENVIRONMENT LEARN FROM EXPERIENCE CONTINUED BUSINESS JUSTIFICATION DEFINED ROLES AND RESPONSIBILITIES FOCUS ON PRODUCTS MANAGE BY STAGES MANAGE BY EXCEPTION PRINCE2 PRINCIPLES TAILOR TO SUIT PROJECT ENVIRONMENT LEARN FROM EXPERIENCE CONTINUED BUSINESS JUSTIFICATION DEFINED ROLES AND RESPONSIBILITIES FOCUS ON PRODUCTS MANAGE BY STAGES MANAGE BY EXCEPTION PRINCE2 PRINCIPLES 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 28
  • Gates within PRINCE2 Processes Directing Managing Delivering Pre- Project Subsequent Delivery Stage(s) Final Delivery Stage Initial Stage Start Up Directing a Project SB Initiating SB CP Controlling a Stage Controlling a Stage Managing Product Delivery Managing Prod Del 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 29
  • Adapting Stages and Gates to an Organization 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 30
  • Information Technology • Long-standing desire for better management control • Many opportunities to identify Stages and Gates • Requires that the real accom- plishments are understood • Requires that tough decisions are made • Supported by SDLC (System Development Life Cycle) – Stages align with development stages • Equally valid when applied in Agile environment – Number of iterations is estimated – Stages align with an iteration or release of the code – Gate to allow evaluation of progress at each release 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 31
  • Product Development • Structure of work often lends itself to Stages and Gates – Design – Prototype – Build – New Product Introduction • Always a challenge to estimate time for creative activities – Establish larger tolerances during planning – Reviews and decisions should still happen at Gates 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 32
  • Decision-Averse Organizations • Problem – Not making a decision – Slow decision-making – Reluctance to cancel projects – Making a decision not based on facts and data • Effect – Exacerbates resource shortages – Hard on the team • Lack of integrity • Wasted time and effort • Strategies – Have good information ready to support decisions – Show the cost of no decision – Make recommendations – Implement the decisions 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 33 Project is Viable Project is Not Viable Sustain the Project Cancel the Project Good Decision Poor Decision Type I Error Poor Decision Type II Error Good Decision
  • Extremely Flat Organizations • Problem – This is a strategic tool • Not for daily decisions • Effect – When made too visible to team, it can • Waste effort • Cause angst • Lead to protective behaviours • Lead to confusion • Strategies – Separate the management roles • Investment decisions • Project Delivery – Use Gates for strategic control • Allowing the project to proceed or not – Use project milestones for tactical control • Day-to-day project progress 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 34
  • Conclusions 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 35
  • Conclusions • Using Stages and Gates can result in more efficient spend of project dollars – Ensuring that go/no-go decisions are made – Culling weak projects before significant expenditure – Cancelling projects that have strayed out of bounds – Resources and funds can be redirected to other initiatives • To be effective, Stages and Gates must be applied properly – Set Stages to include logical groups of activities – Make the required decisions at the Gates – Base the decisions on measurements and facts • PRINCE2 and MoP incorporate these Best Practices 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 36 A cancelled project should not be considered a failed project, but a good decision
  • QUESTIONS & ANSWERS 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 37
  • More Information • APMG-International – www.APMG-International.com • PRINCE2® – www.prince-officialsite.com • MoP® – www.mop-officialsite.com • SOMOS Consulting Group – www.SOMOS.com – boyce.alan@SOMOS.com • Cooper, Robert G., Winning at New Products. • McGrath, Michael E., Setting the PACE in Product Development. http://www.linkedin.com/company/apmg-international @APMG_Inter 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 38
  • International Find out more about us at our website: www.APMG-International.com Thank you for attending 2013.09.10 Using Stages and Gates in Projects and Portfolios v.28 39