Business Requirements:
Why focus on getting Business Requirements right today?
The concept of getting business requirements right sounds straight-forward. However, most companies would admit they need to improve - in fact, flawed requirements trigger 70% of project failures1. Consider the statistics from recent studies:
1. While fewer than 15% of projects are considered outright failures by those involved, 21.6% of all spending on projects is still wasted today ? either on failed projects, or poorly controlled overruns.2
2. As the projects get more interdepartmental and complex, the failure rate rises. For example, 51% of companies implementing an ERP viewed their ERP implementation as unsuccessful.
3. The ERP statistics demonstrate an important relationship: the larger the number of stakeholder groups involved, and the more complex the processes, the more likely a project will fail due to business requirements related problems. It is not so much that over 20% of all money spent across North America on new projects will likely be wasted, it is that the more strategic a project becomes, the more likely it is to fail.
From a cash flow perspective: more money will be saved by improving your processes in business requirements, than by outsourcing the entire application development organization offshore. Fixing business requirements processes, however, requires more organizational discipline to achieve results.
How does business performance in defining business requirements affect other operational areas?
1. Effective business requirements are both a business organizational discipline issue, and a technology issue. Requirements are the bridge between business and technology wherein the maturity of the processes in place directly impact the effectiveness of a company in its use of technology or technology suppliers.
2. High quality processes are also efficient and streamlined. This means that implementing better processes should come with the future benefit of time savings and better execution. Today, most business strategies end with some form of technology solution.
Making this transition between business and technology faster and more efficient is a goal that can be profitable at the highest level of a business.
3. Poor requirements have extreme organizational financial risk, particularly on large technology initiatives. There are processes for testing the completeness of requirements.
There are triage tests to determine if it is probable that less intuitive processes were missed. There should be little excuse for a project missing its financial targets by orders of magnitude because the business requirements were poorly specified.
Requirements are not simply a document or template that needs to be filled in. Effective business requirements are achieved only by getting the right content, in a consistent format, using a clear process. The process is a discipline which requires commitment at the highest level.
