The understanding phase establishes the initial approach, risks, costs, schedules, and financial impact of the opportunity. It assesses project potential in terms of appropriateness for the marketplace and accomplishment of business goals, and culminates in a decision to proceed. A project team is established along with the project schedule. The salesperson needs to become a key member of the project team and the schedules need to be consistent and integrated within the overall project plan.

The team collects requirements and documents the requirements. This identifies user groups, goals, and success criteria. It also identifies competitor strengths and weaknesses, sets objectives and validation metrics.

Based on the requirements, the team creates the design direction for the desired results and marketing message. Both the requirements and design direction need to be validated with users.

At the end of this phase, the requirements are finalized and articulated. All measures and targets should be set and integrated into the project model that optimizes value to the customer.