Business Analyst Lessons - Solid Requirements Matter

A company with poor requirements practices is just asking for over-budget costs and regular failure, according to a new report by IAG Consulting. The report, entitled Business Analysis Benchmark, examined 110 enterprise technology projects at 100 companies to determine just how important project requirements really are.

All of the projects were worth more than $250,000 (the average value was $3 million) and focused on adding new functionality. The report analyzed the caliber of business requirements practices among the projects, as well as the financial consequences of those practices and which practices lead to project success.

The study found that 68 out of the 100 companies had poor requirements practices. These companies were more likely "to have a marginal project or outright failure than a success" and their projects were more likely to "run away" (take 80% longer than expected, deliver a product 30% less functional than desired, or cost more than 160% of the original budget). These poor analysis capabilities led to three times more project failures than successes.

The remaining 32 companies were more likely than not to have projects be delivered on time and on budget with the expected functionality, due to the "superior business requirements processes, technologies, and competencies of people in the organization."

So what can businesses do to improve their requirements processes? The survey makes several recommendations, such as auditing "three specific characteristics of business requirements documentation" and "forcing failing projects to redo requirements." Here are some other suggestions the study makes:

Focus on requirements as a process instead of a deliverable. "Companies that focus on both the process and the deliverables of requirements are far more successful than those that only focus on the documentation quality." Focusing on the progress and techniques used to develop documentation is essential to gaining economic advantage and success.

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."

None of these are as easy as they sound, however. Improving business requirements practices involves making systematic changes throughout an organization. Plus, even companies with optimized requirements processes still have to deal with scope creep, mistakes, and failures. According to the report, even the best companies end up spending an average of $3.63 million on a project budgeted to cost $3 million. But that's a big improvement over most companies, who meet their budget expectations on fewer than 20 percent of all projects. IAG Consulting says that by implementing better requirements practices, "companies can, and do, achieve over 80% success rates and can bring the majority of strategic projects in on time and on budget."