As we’re delivering on a project for a customer, there may be numerous reasons why the project would be best moved to a phased project delivery situation.  The most common is the result of numerous requirements changes or change requests initiated by the customer while initial functionality is still badly needed by a specific date.  In a situation such as this, where the project cannot deliver the complete project or product by the deadline, there is still the possibility that it might deliver some useful part of it by the original promised date or close to it.

Technical projects composed of several subsystems, for example, often implement one subsystem at a time. Tenants can move into some floors in a new office building while there is active construction on other floors, and sections of a new freeway are opened as they are completed rather than waiting for the entire freeway to be complete.

Phased delivery has several benefits:

- Something useful is delivered as soon as possible – and in the case of many changes affecting the project, some critical base functionality may still be deliverable by the original agreed upon date.

- Often, as in the case of information systems, phased delivery is actually preferred because the changes introduced by the new system happen a little at a time. This longer time frame can reduce the negative impacts of ongoing business operations.

- Feedback on the delivered product is used to improve the products still in development.

- By delivering over a longer period, the size of the project team can be reduced; a smaller team can lead to lower communication and coordination costs. In addition, because the people are working for a longer time on the project, project-specific expertise grows. These factors should lead to increased productivity in subsequent project phases and to an overall lower cost for the project.

- Phased delivery allows for phased payment. By spreading the cost of the project over a longer time, a larger budget might be more feasible for the customer.
Modularized products, whose components can operate independently, can be delivered in phases. To determine how to phase a project or product delivery, you need to look for the core functionality—the part of the project that the other pieces rely on—and implement that first. The same criteria may be used in identifying the second and third most important components. When multiple components are equally good candidates, they can be prioritized according to business requirements.

- Trade-off: Phased implementation increases functionality at the expense of schedule. If the approach requires old methods to run concurrently with new methods, it could also temporarily lead to higher operating costs.

- Impact on risk: When components of a solution are delivered over time, the connections, or interfaces, become high risk. For technical solutions, that could mean corrupted data.