by Carla Slater Kettrick, Reliant Business Solutions,

Many companies face several challenges that impede successful and timely product development, which is often due to a lack of an effective management and tracking system. Management and tracking systems facilitate the generation, distribution and storage of critical project information, as well as aid in developing the appropriate mix of projects to satisfy product mix, financial return, and risk requirements. The greatest impact of this system is a reduction in costs associated with the development process, which translates into an improved return on investment.

The Stage-Gate process is a widely used method for effectively managing and tracking product development. Implementing this process can help companies overcome many of the challenges faced in developing products.

One of the many challenges of product development that companies face is a product development portfolio made up of too many unsuccessful projects. The goal is to reduce the number of unsuccessful projects and focus the company efforts on projects with a greater potential of success. Unsuccessful projects drain valuable resources that can otherwise be devoted to successful projects, which meet the financial goals of the company.

A second challenge is too few resources per project. A high number of unsuccessful projects in the company portfolio drain valuable resources, starving those projects with greater potential and chance of success. The same number of resources spread across a greater number of projects means the development process is compromised everywhere. Fewer resources per project means key steps in the process are not completed, which results in a poorer outcome. Failure becomes more likely.

Finally, companies are challenged with long development cycles. Reducing development time is a key goal in any product development. In an effort to cut development time, companies will look for short cuts only to find themselves paying for it down the road. The result is delayed product launches, unhappy customers and products that fall short of expectations.

Utilizing an effective product development process can help companies achieve a reduction in cycle time and increase the number of successful projects.

The Stage-Gate Process operates like a checklist to ensure quality and efficiency are applied to every development project. The Stages are the time spent by the project team completing the required work. The Gates are the decision points where management assesses the results of the previous stage and determines whether to continue funding the project.

What makes this process so effective is that it forces quality of execution. Within each stage, the required results are precisely defined and the expectations of the project team are clear.

An effective Stage-Gate process includes thorough preparation and up-front homework, early product definition prior to development, cross-functional effort where all key functional groups are represented, tough criteria at Gate decision points, and quality of execution throughout the project.

The Stage-Gate process is combined with Product Portfolio Management to facilitate management of the company's product portfolio and to develop a balanced approach to selecting the appropriate mix of projects in line with investment and return requirements.

Companies utilizing a Stage-Gate process tool experience an increased number of successful products, a reduction in wasted resources, an improved development cycle, and a reduction of project team and project management effort. As a result, significant cost savings and an improved return on investment can be achieved.