To develop new products, companies can integrate Project Portfolio Management (PPM) into their "Stage-Gate", i.e. Project Interim Evaluation process. This approach works very well for large companies operating in mature businesses where the project portfolio is rather static.

With this approach, companies can review individual projects and make continuation/termination decisions for each one. To add PPM to the Stage-Gate process, gates need to be changed. In addition, resource allocation methods are added to the gates without reprioritising the entire set of projects every month.

Stage-Gate Approach ;

The Stage-Gate method, developed by Dr Robert G. Cooper, is an approach that can be used to make the product development process more effective. It is an effective way to create new products based on new ideas.

Using this approach, a project is executed through various phases. These phases are separated by "gates". The gates represent decision points where managers decide whether or not to move to the next stage. This model can be used when developing new products or when companies need to change or improve processes.

At each Gate, a decision is made whether to continue with the process. This decision is based on the information available at the time and in most cases is made by senior managers or steering committees.

PPM and Stage-Gate

The addition of PPM to the Stage-Gate process helps sharpen gate decisions on individual projects. Senior managers make continuation/termination decisions at gates using all available information for each project. In gates, projects are reviewed one project at a time. During these meetings, projects are prioritised and resources are allocated. It is important to recognise that this is a real-time decision process that comes into play many times throughout the year.

This approach is often used by companies that already have a Stage-Gate process in place. These companies then add PPM to the gate process to support decision making. This method works particularly well in large companies and when projects are complex and long term.

How does the Stage-Gate Process Change

When PPM is added to the Stage-Gate process, senior managers at the gates have to make two decisions.

The first decision to be made is a Go/Kill decision where individual projects are evaluated using different methods such as financial evaluations (NPV, ECV, etc.), checklists and scoring model tools.

The second decision that needs to be made is the Go/Hold decision, where the decision to proceed means allocating resources to the project. This is also the moment to create a ranked list of projects, which helps to compare the relative attractiveness of the project under evaluation with other "active" and "pending" projects.

Thus, decisions on continuation/completion, active/pending, prioritisation and resource allocation are made in real time during the Gate meeting. It is worth underlining that during these meetings only the project under review is given a relative priority level over others.

To make the above-mentioned decisions, senior managers need to assess the impact of the analysed project on the balance of projects and whether the project is in line with the project portfolio strategy. As a result of each assessment, bad projects are identified and eliminated, while good projects are recognised and prioritised appropriately. It is important to underline that resource decisions (people, equipment and money) are also made during these Gate meetings.

How Do You Determine Which Projects to Prioritise in PPM?

In PPM, projects can be prioritised according to factors such as strategic fit, return on investment, resource availability, risk and market demand.

How Do You Know When to Move from One Stage to Another in the Stage-Gate Process?
Moving from one stage to the next in the Stage-Gate process is usually determined by the completion of key deliverables and the achievement of predetermined milestones. A gate review is conducted at each stage to assess the progress of the project and determine whether to proceed to the next stage.

What are the Challenges in Using PPM and Stage-Gate Process?
Some common challenges when using PPM and the Stage-Gate process include poor project selection, inadequate resource allocation, unclear decision-making criteria and resistance to change.

How can these challenges be assessed? These challenges can be addressed by establishing clear decision-making criteria, involving key stakeholders, regularly reviewing the portfolio and individual projects, and proactively addressing resource constraints. Effective communication and co-operation between team members and stakeholders can also help overcome resistance to change