What is a pilot project? Meaning, purpose and tips
Updated 9 November 2022
Whether you're working in product design, marketing or business development, pilot projects play an important role in business strategy and decision-making. Pilot projects enable organisations to trial new products and services without committing to them too quickly. They're an effective way to assess the viability of a new idea, and both private companies and public sector organisations, including governments and councils, use them regularly. In this article, we discuss what a pilot project is, including what the term pilot project means, its purpose and tips for professionals interested in testing new ideas using this strategy.
What is a pilot project? Meaning and purpose
In your workplace, you may hear the term 'pilot project', meaning a small-scale trial that tests new tools, products, services or innovations. Private businesses and public sector organisations use pilot projects to test the implementation of a new idea and get feedback from users and customers on its success. It's possible to pilot many different ideas and concepts, such as:
local governments pilot new financial incentives like Universal Basic Income
private companies pilot new loyalty programmes
tech companies may pilot new software releases
charities may pilot new schemes, such as a back to work programme
private companies may pilot the release of a new product before its wider launch
The purpose of a pilot project is to test whether the new concept is worth pursuing and assess existing implementation strategies. For example, a supermarket chain interested in opening new cashier-less supermarkets might pilot the concept by opening a single cashier-less supermarket in capital first. This pilot store enables executives to assess the store's popularity with customers, measure store revenue and profits and identify any unforeseen challenges in the cashier-less business model before opening more stores across the country.
Pilot vs. trial
Many people assume that pilot projects and trials refer to the same thing, but actually these terms refer to very different strategies. A pilot project is a small-scale test of an idea or a process, often involving a limited release of a particular product, scheme or service in anticipation of a wider release if the pilot project is successful. Organisations use pilots to test the feasibility of a project and determine the effectiveness of its implementation. Pilot projects are usually short in duration and narrow in scope.
Trials differ from pilots because they're usually conducted at a later stage, at the point when an organisation has already decided to go ahead with the launch of a new product or service. A pilot is a fact-finding mission that could result in the advancement or the termination of a project, while a trial is just the first stage of a new launch. Trials may happen at partial or full scale, and their purpose is simply to allow the trial team to assess the implementation of an idea and make any necessary changes before a wider launch.
What are the benefits of a pilot project?
There are many reasons why organisations use pilot projects to test new products, schemes and ideas. Pilot projects allow organisations to test new ideas before committing to them fully and get useful customer feedback. Some of the benefits of using a pilot project to test ideas are below:
Assess the popularity of an idea
Often, organisations use pilot projects to assess how popular a new concept is with their target audience. This is particularly useful when piloting an idea that's new and different from an organisation's other offerings. Using a pilot project, executives can determine whether customers are truly interested in the product or service on offer and get a more accurate idea of what sales or uptake might look like after a national roll-out. This data is essential when considering whether or not a new product or scheme is worth continuing.
Test the process
Alongside testing how popular an idea is, pilot projects give organisations the chance to test the team and processes behind the launch of a project. If a pilot launches to widespread customer approval, but there are problems getting the products to customers or confusion over how a service works, this indicates that the concept itself is good, but the implementation of the concept requires improvement. Pilot projects allow teams and managers to identify challenges in implementing an idea before the launch.
Make improvements before launch
After identifying problems, either with the product or service itself or with the launch, teams have the opportunity to make changes to a concept or strategy before going ahead with another pilot, trial or full launch. Depending upon the success of the initial pilot, team leaders may decide to abandon a project or continue without changes. A pilot gives project teams more opportunities to make changes and perfect an idea before a national launch.
Set a realistic budget and timeline
It may be challenging to accurately estimate project budgets and timelines in advance, especially when rolling out new, untested ideas. A pilot project makes it easier to measure the total cost and timescale of a small-scale pilot and extrapolate the cost and timeline of a wider release. In some instances, the information that project teams gain on budget and schedule from a pilot project could impact whether a full-scale project is viable at all.
Challenges to conducting a pilot project
If you're considering conducting a pilot project to test the roll-out of a new idea, it's necessary to plan your pilot in detail to maximise efficiency and cost-effectiveness of your pilot. Planning an effective pilot test involves pre-empting some of the challenges that may arise during a pilot. Some of the biggest challenges to conducting a successful pilot are below:
Poorly defined roles
Because a pilot study isn't a full launch, some organisations don't designate roles and responsibilities as carefully as they might during other projects. If roles and responsibilities aren't properly defined, this makes it a lot harder for pilot project members to understand what they're responsible for and for team leaders to hold members accountable. Ideally, project managers run pilot projects like any other project.
Inadequate financial management
Even though they take place on a smaller scale than full projects, pilot projects sometimes cost a lot of money, time and other resources. It's beneficial if project teams do their best to accurately assess the cost of a pilot project before beginning it and factor this into relevant budgets. With inadequate financial management, pilot projects may fail in their early stages without enough time to assess the success of the idea.
Low stakeholder engagement
The purpose of a pilot project is both to assess the quality of an idea and test its implementation and to demonstrate this success to stakeholders. If a pilot project partially exists to persuade investors and other stakeholders to support a new project, it's helpful to engage these stakeholders throughout the process. If stakeholders don't feel engaged with the pilot, they're far less likely to approve it no matter how successful the pilot is.
Tips for conducting a pilot project
If you're considering conducting a pilot project for your organisation or business, follow these tips below to give your pilot test the maximum chance of success:
Establish pilot goals. Before you launch your pilot project, identify what your goals are for the project and what factors you specifically want to test. Start by defining the problem that prompted you to launch the pilot study and consider the most effective ways to evaluate whether the pilot is an effective solution to that problem.
Engage stakeholders. Engaging stakeholders through the project by providing regular updates and reports on the status of the pilot may make it easier to progress to a full launch later.
Define parameters early. Before launching a pilot project, it's key to define the scope of your project. This means deciding what audience the pilot targets and how long the project is going to run.
Gather feedback at every stage. A pilot project is a great opportunity to get feedback from your customers and team members. Take every chance to seek feedback from others through surveys and focus groups and incorporate this into later iterations of the project.
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