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.
All projects mentioned in the survey had a minimum value of $250,000, although the mean value was $3 million. Each concentrated on adding additional functionality. The study looked at the business requirements policies associated with each project, as well as the financial outcomes resulting from those policies. It could then decide which policies often lead to the success of a project.
Of the 100 companies, 68 of them had requirements practices that were below average according to the study. Not only was there a high likelihood for these companies "to have a marginal project or outright failure than a success," but their projects would likely "run away," which means to either be late, taking 80% longer than expected, or deliver a 30% poorer product functionally, or end up costing more than 1.6 times the original budget. Thus, there were three times more project failures than successes because of these inadequacies in their analysis capabilities.
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."
A common question among business owners is how they can improve their requirements process. The questionnaire has a lot of suggestions for those clueless business owners, such as choosing and meticulously reviewing three aspects of their current documentation, or making substandard projects redo their requirements. Other advice for them in the study includes:
Instead of thinking of requirements as just a finished product, think of them as a process. According to the study, companies that do this experience more success than those that only concentrate on documentation quality. Looking closely at the progression and development of documentation is just as important as the finished product itself.
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.
Commit yourself to change. Most companies are aware that certain requirements take priority, but few actually alter their routines based on these priorities. CIOs need to attempt to facilitate improvement will all persons, processes, and tools integral to those support processes that are required to achieve organizational improvement.
These are all harder than they sound. But well-planned adjustments throughout an organization are key when attempting to positively enhance business requirements practices. In fact, scope creep, mistakes, and failures are all aspects of business with which even companies with excellent requirements processes have to contend. The report shows that a project having a budget cost of $3 million ends up averaging even these leading businesses $3.63 million in expenses. That is, however, vastly superior to most businesses. Less than 20 percent of all projects are successfully kept within planned budget allowances for most companies. IAG Consulting states that "companies can, and do, achieve over 80% success rates and can bring the majority of strategic projects in on time and on budget" by improving their requirements practices.
