BUSINESS REQUIREMENTS AND THE IMPACT OF POOR PROJECT PERFORMANCE

The PMO Division of Seminole County Florida is formalizing methods that
rapidly and effectively evaluate the county?s business needs, and is
turning those needs into formal projects. All projects have distinct start
and completion points and go through phases or process groups. Meta Group
research highlighted in a recent article entitled The High Premium Paid for
Poor Quality Business Requirements, the importance of the business
requirements phase and process on large-scale pro-jects. Research in 2008
showed how the requirements definition phase of a project consumes only 10%
of total project expenditure, while all software pre-coding activities
consume around 39%.

The study demonstrates that a project manager who believes the quality of
requirements received is below average should redo the business
requirements instead of moving to the next phase or process group. This is
especially true on a large project despite the discomfort this decision
would create with business stakeholders. Our County IT Department is
minimizing the need for software development. However business requirements
are extremely important on any type of project since they have such a large
impact.

Research revealed that 79% of specific large projects were over time, and
over budget; and a whopping 50% of these projects were runaway projects as
defined by a combination of any two of:

1. Taking over 180% of target time to deliver
2. Taking in excess of 160% of budget
3. Delivering under 70% of the target required functionality

Time and budget are two of three key attributes of all projects. A project
manager with requirements or scope definition that is be-
low average or unclear should not proceed to the next process group due to
the increased risk and potential impact to the project?s suc
cess. It is difficult for management to overcome this concept or approach
to projects due to the ingrained management culture. Most man-agers
intuitively understand that it is difficult to implement change control to
correct poor project performance based on poorly defined business and
software requirements. Two thirds of the projects analyzed in the survey
had a negative impact due to this lack of focus, with only 20% of companies
making the needed investment to obtain excellent business and software
requirements on a repeatable basis. This research implies that people
intuitively recognize the need for good requirements, but not to the extent
to change their culture or behavior.

Project success means seeing business requirements as more than simply a
deliverable or document. Organizations must commit to achieving
excellence in the business requirements phase and process group. This
commitment requires improving resources, skills, processes, and quality
standards. The methods and procedures mentioned earlier, together with a
long range IT plan, are foundational artifacts our IT Department is using
to improve the probability of project success.

Research also shows how this can pay off:
Over 70% of companies, using this approach reported having a successful
project.(54%) of projects are on time, on budget and on function,
As a group, these companies pay about 50% less for their applications.

The bottom line is, without effective business requirements elicitation
processes, the project will cost more, take more time, and more likely fail
to deliver on those requirements.

If you are interested in reading more on Assessing the Impact of Poor
Performance on Companies, an IAG Business Analysis Benchmark Report
Extract White Paper is available by Keith Ellis, dated 8 May 2009 at the
URL listed below.

<http://www.iag.biz/images/resources/assessing%20the%20impact%20of%20poor%20requirements%20on%20companies.pdf>