221
Gate 3
In the chapters on Gates 1 and 2, we discussed many important issues regarding gates in
general, and all of the concepts recommended for meeting format and portfolio review
apply to Gate 3 as well. Gate meetings also are a good time to review the market and eco-
nomic environment.
The product team should arrive at the Gate 3 meeting with its deliverables and a recom-
mendation supported by data. A recommendation to go to launch and Stage 4 must of
course be accompanied by a request for investment capital. To convince top management
that the hardware and software implementation work properly, the product team can deliver
user acceptance tests reports, which should ensure that working system meets the Stage
4 input requirements. These results should be documented and delivered to all interested
parties prior to the Gate 3 meeting. These documents must be in a form that allows verification
against the original Money Document.
By Gate 3, the trading/investment system is fully validated. Quantitative methods and
business rules have been tested and proven. All technological uncertainties have been
resolved. All the support infrastructure should be in place. All concept, model, and opera-
tional risks are gone. The team and top management should be confident that the system
will achieve its competitive advantage. In Stage 4, the product team will focus on controlling
market risks. Nevertheless, top management must still make a go, kill, hold, or return
decision. In order to pass through Gate 3, several questions must be answered:● Does the market opportunity still exist? Does the competitive advantage still exist?
● Is there investment capital available to start trading immediately?
● Does the probationary trading prove successful implementation? Is the process stable?
What are the metrics that are stable?
● Have the required documents been delivered?
● Is the product on time and on budget?
● Are the systems for the report generation for the system in place?
● Are the resources requested for ongoing management of the system acceptable?
● Is there a plan for moving continuously through Stage 4?CHAPTER ◆ 24