New Study From IAG Consulting Finds Companies With Poor Requirements Spend Average $2.24M More Per Project
NEW CASTLE, Delaware, February 11, 2008 – IAG Consulting today unveiled the results of its new Business Analysis Benchmark Report, that surveyed over 100 North American companies to determine the importance of business requirements on enterprise success with technology projects. The survey found that poor requirements and lack of business analysis capabilities are costing companies millions of dollars per project when they pursue larger, strategic projects that add new functionality to the organization. The report highlights several major findings, including:
Companies with poor requirements, on average, spend $2.24 million more per project on strategic projects than those that employ requirements best practices.
Companies with poor requirements and business analysis capability have three project failures for every one project success.
Only 32% of companies employ practices that make the likelihood of project success “Probable”. The remaining 68% enter every project with an “Improbable” likelihood of success, even before they begin the project.
Over 40% of the IT development budget for software, staff and external professional services will be consumed by poor requirements at the average company using average analysts. This requirements premium is avoided by organizations that consistently use best practices in business requirements when completing projects.
Business Requirements Key to Success
The importance of requirements to project success has been an emerging hot topic in today’s IT organizations. People understand that getting requirements right is important to project success. However, the study found that while people understand this issue, businesses did not take effective action in almost 70% of the strategic projects surveyed. The research found that 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.
“The use of a poor requirements process can be debilitating to an enterprise,” said Keith Ellis, author of the study and Vice President at IAG Consulting. “Organizations understand conceptually that requirements are important, but most do not internalize this understanding and change their behavior as a result. The most successful companies do not view requirements as a document, they view it as a process of requirements discovery. Only companies that focus on both the process and the deliverables are consistently successful at changing project success rates.”
Best Practices Bring Hope
Almost 70% of companies surveyed set themselves up for both failure and significantly higher cost in their use of poor requirements practices. While there is no single silver bullet for making organizational improvement, the full report outlines a number of strategies that organizations can undertake in the area of requirements definition and management. Companies with mature requirements capabilities should achieve 80% success rates for the projects they undertake.
For more information, or a copy of the full study, please visit www.iag.biz .
About IAG Consulting
IAG Consulting is the leading international business and software requirements definition and management consultancy. IAG is known for its Requirements Discovery Process™ and the Best Requirements Practices™ employed on their consulting engagements. IAG’s core competency is Requirements Definition and they are best known for their service of facilitating short one-week Requirements Discovery Sessions and producing clear and accurate Business and Software Specifications. IAG’s main offices are in New Castle, Delaware and Toronto, Ontario.