Let me just start by saying that I love this project phase gate topic. As a long-time project manager, I used this process to my advantage all the time. In this article, I want to talk about this critical project management process, project phase gates.

Sadly, nowadays, I am seeing that more and more project managers ignore or don’t utilize them on their projects. Yes, I said it, and you know who you are…just kidding, but am I? I mean, it is 2024. Do people even use phase gates or waterfall anymore? Isn’t everyone running Agile these days? No, not every company is running Agile, and there is plenty of predictive or waterfall projects still being run today.

I think the point is that phase gates have been around a long time and can quickly be deemed as old and antiquated, but that is just simply not the case. Let’s dig into that for a bit.

If you are not aware, phase gates have been around since the mid-80s in the US where companies such as a DuPont and Exxon were the first major companies to adopt this process to review each phase of the project. Imagine, the mid-80’s and we are still using them today because of how important they are on projects.

I started using phase gates on my projects in the early 90s when I first became a project manager. I was working at the Ministry of Transportation and Highways in Victoria, BC at the time and as it was government, these types of sign-off points are important and were mandatory on all projects. When I first started using them, I was like most project managers and thought that they were a waste of time, extra work, and provided no value to my project.

Well, I quickly learned how wrong I was there! Let’s keep going.

What are Project Phase Gates?

A project phase gate is a checkpoint that is used to review the progress of a project and decide whether to continue or terminate the project based on the current status. Let me say that again: Continue or Terminate the project! Can you imagine? Terminate the project! Can you see how valuable that would be if you got to a phase gate and everyone agreed that at this stage of the project it should be terminated. That’s powerful! It is also why I think it should be one tool in every project manager’s toolbox.

Most companies tend to use phase gates in the more complex projects that have a high degree of uncertainty. But I disagree because I believe they should be used in every project. Phase gates help to ensure that projects are at the place they are expected to be at when the phase gate meeting occurs. If the project is not, then you either extend the time and push the phase gate checkpoint, or you have the meeting and address if the project should go forward.

Phase gates are typically based on many different criteria points, which vary from company to company, but often is usually iron triangle based. This includes:

• Project scope
• Project schedule
• Project budget
• Project benefits
• Project ROI

The specific criteria that are used for each phase gate will vary depending on the project and the company’s specific requirements for that stage of the project.

Ok, now we know what phase gates are and why we use them, let’s look at some of the key advantages and disadvantages.

Advantages of Using Project Phase Gates

Project Stopping Points – This was mentioned earlier but critical to repeat to ensure project managers understand the powerful nature of this phase gate process. If you find that the project is not tracking or delivering as expected, or better yet, if the outcome of the project might not yield what was expected from the beginning, the phase gate process allows for the project team and stakeholders to reevaluate if the project should continue.

Incorporating project phase gates helps us stay on top of projects – These structured checkpoints provide clear milestones, help track progress, and ensure alignment with the project’s objectives. By having defined phases with specific deliverables outlined for those phases, project teams can maintain focus, identify issues early on, and promptly address where necessary.

Enhanced Issue/Risk Management – Phase gates serve as a point in time review of the project to review what is and is not happening on the project. By conducting these assessments at these critical project points, project managers and team members can strategically evaluate uncertainties, determine mitigation strategies, and make well-informed decisions about proceeding or making course corrections when needed.

Efficient Resource Allocation checkpoints – The phase gates enable stakeholders to evaluate resource utilization and reallocate resources based on growing needs and priorities. With clearer visibility into resource requirements for upcoming phases, organizations can optimize resource allocation by aligning skill sets and looking at the next set of deliverables on the project.

These are just some of the clear advantages I can see in using phase gates, but that is because I am a big fan and have been using them for years!

Ok, now let’s focus on some disadvantages of using the project phase gate process.

Disadvantages of Using Project Phase Gates

Perception of slowing down the project – This is the first one I want to address because it is pretty easy to say that a disadvantage is that phase gates slow down the process and are administrative overhead. I think we need to be careful about this one because it is easy to say that phase gates are slow and administrative, but that might not necessarily be true. Phase Gates allow project teams and stakeholders to see what has been created thus far in the project, so going slow and checking work products and if the team is delivering as expected might seem administrative, but it is actually very important.

Too rigid – We hear this a lot, that the phase gate process is too rigid and too stuck in the past and we need to be more agile and nimble. Project teams feel hampered and unable to pivot swiftly in response to emerging challenges or opportunities if they must stop and process a phase gate.

Increased administrative burden – The phase gates create a level of documentation, reviews, approvals, and perceived bureaucratic procedures that consume time and resources and looked at as administrative burden. This perceived overhead can detract from project work and lead to frustrations among team members who perceive it as red tape and hindering progress of getting the project done.

So, there are definitely people and project teams that are going to look at phase gates as project management red-tape which provide no value to the project. This is not something that is new or uncommon for project managers and we have heard this same thing for years and years. But, when you step back and look at this and the value the project phase gates do bring, you will clearly see that the advantages of phase gates outweigh the disadvantages every time.

Ok, let’s keep going and cover how phase gates help with project success.

How do Phase Gates Help Project Success?

That’s an interesting question and comes back to what we are trying to accomplish with project phase gates. When you think about phase gates, my opinion is that they are stopping points at a particular phase of a project. There were specific deliverables that had to be finished at this stage of the project before it could continue. If the deliverables are not finished, the project team and stakeholders could investigate why, and then decide if the project should move forward. The project just might not be worth going forward.

Let’s look at this table for a Design Phase Gate.

Design Phase Gate Example

In this example, you can see that there are 19 deliverables that need to be completed or at least in-progress, at this Design Phase gate. I say either completed or in-progress because something like the Risk Log, for example, is never complete until the project is finished, but the Technical Specifications document needs to be done or the project should not move forward.

So, if the project hits the Design Phase gate and the Technical Specifications document is not done, what do they do? Well, if you follow the intent and purpose of the phase gate, the project does not go forward. Does that make sense, or does that in reality happen that often? No, what happens is the project delays the phase gate meeting until all components are done and ready for review and acceptance. If the key objectives for the phase gate are not completed, the project will not move forward, so we see project managers delay the meeting and give the team more time to do the deliverables needed for that particular phase gate. But what if the deliverable that was not done was really-really important and maybe something related to ROI calculations or something related to the intended benefits of the project that could not be completed? Well, that might be big enough and important enough that the stakeholders say, this project is not worth continuing and decide to cancel the project at that point in time.

This is a great example of how following a structured process can lead to project success, as success is often measured by the outcomes the project achieves. The Technical specifications document essentially outlines the technical specs for the business requirements, so it is a critical document to the project success and moving the project forward to the next phase of the project without it could be an issue. The ROI or the intended benefits not being understood or documented well enough could certainly be a showstopper and something that could stop the project dead in its tracks.

Of course, there are countless examples of these types of documents/deliverables that are reviewed in project phase gates that should be evaluated as to their importance in completing or not before moving the project forward.

It is clear to see the tie between the phase gate process and the success of the project and how both are so closely linked.

When Should Phase Gates Be Used?

The question of when to use phase gates is common, and the answer can vary depending on the organization and the specific projects being undertaken. The timing for implementing phase gates varies for each company since they have their own specific processes, culture, and project management approaches.

However, there are some general guidelines and considerations that can help organizations determine the timing for phase gates, including:

Project complexity and risk: It is recommended to have more frequent phase gates for complex, high-risk, or high-cost projects to ensure closer monitoring and control. This allows for early identification and mitigation of potential issues before they escalate.

Earlier and later project phases are most common: Phase gates are typically implemented at initiation, requirements, design, Go-No/Go and Project closure phases. So, this is both at the early stages and later stages in the project.

Best Practices for Implementing Project Phase Gates

When implementing project phase gates, there are several best practices that can significantly enhance the effectiveness of this process. These include:

Ensure clear and measurable criteria are established for each gate – By setting specific milestones or deliverables as criteria, teams can proactively address any potential issues before they escalate, ultimately leading to smoother project transitions.

Encourage open communications at each phase gate – Encouraging transparent dialogue among team members, stakeholders, and decision-makers facilitates the exchange of crucial information at each phase gate.

Continuous process improvements of the phase gates criteria – Continue to look at each phase gate and tweak where needed. When there is a level of flexibility and agility of changing up what is working and not, the project managers and project teams will feel like this is a less rigid and administrative process.

Resource allocation – Phase gates can be used as decision points for allocating resources (budget, personnel, equipment) to the next phase of the project. This helps the organization ensure that resources are committed only after careful evaluation of the project’s progress and viability.

Adapt a mindset of phase gates being not checkpoints but more strategic tools for the ongoing approval of the project – When project manager looks at these phase gates as a tool in their tool belt as something that can used to stop a project that is not tracking or won’t achieve the final ROI/Benefits, this becomes a great tool for the project manager to use.

Summary

As project managers navigate the complex landscape of project execution, one of the most important tools in their toolbox is the project phase gate. Project phase gates are a critical component of their project success.

In this article we covered what they are, when to use them, and advantages and disadvantages, all to re-enforce to you the importance of using them on your projects. But I also want to be realistic, if you are at a company that does not have these built into your project methodology today, you can’t just start creating and using phase gates, because that simply won’t work. Your project team or your executives/key stakeholders won’t approve their use randomly. If you are in that situation, talk to your PMO Leader or your manager and see how you could use them on your projects.

If you are a project manager and you think that phase gates are an antiquated process because it was developed in the 80s and not needed, that could not be further from the truth. Most companies are hybrid, not pure Agile, and have a Waterfall/Predictive component of how they deliver their projects, and this process is very much still applicable.

What do you think? Ask questions and share your thoughts in our Community Discussion Forum!

Learn More about Project Phase Gates: Watch the Lesson

Bill Dow presented a live event all about project phase gates, why they’re the number one tool in a project manager’s toolkit that most PMs aren’t using, use cases, and how to integrate phase gates with Agile and Waterfall.

Watch the lesson here.