High-tech products frequently have the following characteristics:
- Incorporate innovative technologies
- Have a long development time and sometimes a very high development cost
- Be accompanied by services
- Have a long life on the market
How can we secure the various internal and external stages of the product’s life, how can we avoid failing for technical, economic, price or competitive reasons? How can we avoid spending large sums of money in pure waste, how can we be able to say “stop” in time, how can we accompany the product on the market until the end of its life?
The role of stage-gates
This is the role of stage-gates, which are used in almost all technology companies. They are the fundamental tool for product lifecycle management in technology.
The term “stage-gates” is a generic term for successive stages in the life cycle management of a product over time.
At each stage-gate, characterised by prerequisites and decisions taken, it will be decided whether or not the product is allowed to continue to the next stage, i.e. whether it will be allowed to incur the necessary expenditure for the next phase.
- One of the stage-gates will decide, for example, whether or not to authorise the start of the technical development of the product, which is by definition the beginning of a costly stage. It will require prior verification, for example, that the product can indeed have a market, that its technique presents controllable risks, that its price can be competitive with the competition, that the resources necessary for its development are available, etc.
- Another stage-gate will decide whether to authorise the launch of the product on the market, after checking that the timing is right and that all the resources needed for the commercial launch are in place.
All technology companies use stage-gates to secure the various stages, both internal and external (those of the business life cycle following market launch) of the product life cycle.
However, the number, timing and name of stage-gates vary greatly depending on the company, its business and its products. For example, if the company produces products in large series, a stage-gate verifying that the industrial resources are ready will be of great importance, which will be much less the case if the company produces small series.
Examples of internship-gates in the technology company
Despite the variability in the number, position in time and name of the stage-gates, one or more successive stage-gates, either mandatory or optional, will most often be found in the technology, dedicated to:
- Exploration and validation of an idea for a new product or service, or an innovative product:
- Technical, market, economic and financial feasibility:
- Authorisation to launch technical development
- Preparation for industrialisation
- Authorisation of the commercial launch
- Technical and non-technical developments during the product’s market maturity phase
- Withdrawal of the product and its associated services from the market
A demanding course
Each of the stage-gates:
- Will require effective collaboration between different parts of the company, especially between the technical and the customer market areas
- Will require a GO/No GO/GO IF decision
- Will require the courage to make sometimes difficult decisions, such as abandoning or postponing product development
- Will be based on assumptions that may prove to be wrong either through analytical error or through changes in market and competitive conditions during often lengthy internal phases
- Will require a high degree of adaptability to sometimes changing technological or economic conditions
They will therefore not always be sufficient to secure every step and guarantee the success of the product. System failures or analysis errors will essentially result in:
- Product developments or launches that should not have taken place
- Positioning or competitiveness difficulties that will degrade market positions, disappoint customers, prevent products from being profitable
- In the end, lost investments that would have been better allocated to other products
Nevertheless, stage-gates are the best possible tool to hope to master, over long periods, technical risks, important investments, changing market environments, permanent actions of the competition.
The quality of its stage-gate system and the quality of the various processes designed to ensure its proper functioning are therefore essential assets of the B2B/B2G high-tech company.
