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These categories provide a guideline for companies to use in maintaining sufficient funding for each of these areas, assuring investments are balanced in all three categories according to the objectives and priorities of the company. The output from gate 1 is a categorization of the IT project, results from the initiative request form, and a decision made regarding the project (go, hold, cancel, or recycle).
The remainder of the stages and gates are described briefly using work activities and output. Work activities are the processes, analysis, and assessments that occur within each stage. Outputs are the deliverables, products, or services that result from the work activities. The descriptions and information should be treated as a possible reference or starting point in defining or maturing a Stage-Gateฎ process that would be appropriate for a particular company.
Stage 1: scoping/preliminary analysis. Identifies critical technical merits and
Preliminary market assessment.
Perform Internet and literature research.
Determine market size, market potential, and competitive factors.
Engage customer in surveys and focus groups. Gather customer feedback, possible interest, and possibility of solution acceptance.
Approximate solution features and requirements.
Preliminary feasibility assessment.
Feasibility related to development and manufacturing, and technical and operations.
Evaluate time, cost, legal and regulatory risks and roadblocks (e.g., patents, licenses, etc.).
IT PROJECT PORTFOLIO
Preliminary technical assessment.
Preliminary manufacturing and/or supply options assessment.
Preliminary integrated product definition.
Preliminary financial and risk assessment.
Develop action items for the next stage.
Preliminary assessment results and recommendation to go, hold, cancel, or recycle the IT project.
Detailed action plan for next stage.
Gate 2: nearly the same process as in gate 1 but with the addition and refine-
ment of information obtained in stage 1.
Simple financial return models provide more depth to analysis within the IT portfolio.
Checklist and areas addressed from a quality and thoroughness perspective and calculation of the scoring model help facilitate the gate
Results of IT portfolio management prioritizations and rankings.
Decision made regarding the project: go, hold, cancel, or recycle.
Stage 2: building the business case. Critical investigation stage that defines the
solution and validates the appeal.
Detailed market and customer assessment.
Target market definition/attractiveness.
Delineation of the solution concept.
Value proposition and positioning strategy.
Features, attributes, requirements, and specifications.
Detailed technology and operations assessment.
Technical appraisal or the achievability of the project based on customer needs and wish lists translated into technically and economically feasible solutions.
Manufacturing and operations appraisal.
Source of suppliers.
Costs to manufacture.
134 CHAPTER 4 IT PORTFOLIOS AND THEIR CONTENT IN CONTEXT
Detailed financial and business assessment.
Detailed business and financial analysis.
Discounted cash flow.
Legal, patent, and regulatory assessment.
Detailed integrated risk assessment.
Preliminary market launch assessment.
Business case containing many of the detailed assessments listed above.
Also includes project definition, project justification, and detailed project plan.
Recommendation to go, hold, cancel, or recycle the IT project.
An example of a business case outline from Xcel Energy is provided in Exhibit 4.13. Additional information regarding business cases is provided in Chapter 5.
EXHIBIT 4.13 XCEL ENERGY BUSINESS CASE SUITE OUTLINE
Program Structure (how project fits into other projects/programs)
Purpose of Request
- w/Summary of budget, amount spent, amount requested
Financials Cost/Benefit Analysis
- Spend to Date (Capital & O&M)
- Total Project Cost
By Year, Capital, O&M, Total, Future O&M, Budgeted Y/N
NPV, IRR, ROI, Hard Savings, Cost Avoidance, Soft Savings, Useful Life
- BCS Valuation Scores