A new study from IAG Consulting concludes that businesses are much more likely to fail without good requirements practices. The Business Analysis Benchmark study analyzed 110 projects in enterprise technology at 100 different companies, to find the level of importance of clear project requirements.
The average value of the projects under evaluation was $3 million, with all projects being worth more than $250,000. Assessed was the applied business requirements practices and their financial consequences, as well as which practices led to project success.
According to the study, 68 out of 100 companies did not have good processes to gather requirements. Consequently, these companies were more likely to have project failures and their projects were more likely to "run away" i.e. take 80% longer than expected, deliver 30% less functionality, or cost over 160% than their original estimated cost. These poor processes led to thrice as many project failures than successes and increased project costs.
32 companies remained, and these usually delivered projects on time, within budget, and meeting customer specifications. This was found to be as a result of "superior business requirements processes, technologies, and competencies of people in the organization."
As a business what can you do to improve upon the requirements processes? There are several recommendations in the survey. Among those recommendations are: auditing "three specific characteristics of business requirements documentation" and "forcing failing projects to redo requirements." Other suggestions made by the study are as follows:
Requirements should not be regarded as a "target" or a "deliverable," but rather as a process. "Companies which focus on both the process and deliverables of requirements are far more successful than those focusing only on the documentation quality." Companies that focus on both the techniques and the progress of developing documentation are the ones which enjoy a competitive advantage and satisfied customers.
Get better IT skills. "The level of competency required is higher than that employed within projects for 70% of the companies surveyed." Improving your employees' ability to solve problems and putting the right people to work on the right problems will increase efficiency dramatically.
Make a commitment to change. Most organizations know that requirements are important; few actually change their routine. "CIOs must look at making improvement across all the areas of people, process, and tools used to support processes to gain organizational improvement."
These seem simple solutions. However, their implementation is often harder than expected. Bringing the business forward requires implementing changes in an organized manner throughout the organization. Even when the plan has been implemented for optimal processes, there will still be errors and blunders along the way that must be addressed. The reported over-budget spending for the best companies is still 21%. However, the worst companies only manage to stay within budget in less than a fifth of their projects. IAG Consulting recommends improving requirements practices, and that by doing so companies could expect to reverse their failure rate on most strategic projects.
