47% of Failed Projects are because of Poor Requirements

(and 5 reasons why businesses struggle with requirements)

Icon_MoneyThe U.S. economy loses $50-150 billion each year from failed IT projects.2

Screen Shot 2016-07-25 at 7.08.27 AM83.8% of software projects fail by missing their deadline, going over budget, or both!

Screen Shot 2016-07-25 at 7.24.19 AM75% of executives believe their IT projects will fail.3

So why are so many projects failing?

DM_WorkerDefects in a launched project cost up to 200x more to correct than defects found during requirements.5

Screen Shot 2016-07-25 at 7.39.24 AMof failed projects missed goals because of poor requirements gathering.6

Screen Shot 2016-07-25 at 7.41.11 AM


80% of rework and 50% of project defects can be traced to requirement errors.4

Screen Shot 2016-07-25 at 7.45.01 AM52% of projects cost 189% of their original estimate or more…almost twice as much as budgeted!

The Majority of Failed Software Projects are caused By Poor Requirements

Have you experienced missed deadlines, blown budgets, or failed projects? These failures almost certainly originated at the requirements stage. 37% of project failures have inaccurate requirements gathering as their primary cause7 , according to a 2014 study by the Project Management Institute. Most other failures have requirements problems as secondary factors. Another study found that inadequate requirements and changes in requirements are the top two factors contributing to software project failure8.


The Heavy Cost of Poor Requirements

Inadequate requirements documents damage your project in multiple ways:

  1. Money and time are wasted on unnecessary work
  2. Reworking costs money and blows your deadline
  3. Extra work puts you over budget
  4. Software misses key requirements
  5. Business performance is jeopardized by ineffective solutions
  6. Users don’t adopt ineffective applications
  7. Frustration grows

Have you ever experienced any of these pain points? Even if a project achieves launch, if it does not meet the key requirements it won’t be adopted by the user, which is the ultimate failure. If the project is not accepted by the user, all the money spent is wasted. Wouldn’t it be nice to get things right the first time?

5 Reasons Why You Struggle With Requirements

1. Most businesses grossly underestimate the time and effort needed

1Effective requirements take 16% of the total effort of a project
, according to two separate studies by the Information Resources Management Association9 and the University of Southern California10. But, most businesses spend far less than 16% of their effort on requirements.

We’ve seen customer after customer who simply produces a bare outline with no detail for their requirements document. Without our help, many of them would have paid the price later in the project. Every time a detail is left out, the possibility for errors increases. This lack of detail can be for one or more reasons.

2. Employees don’t have the skills to write effective requirements documents

2Requirements must be articulated so that both a business and a technical audience can understand what the plan is, but this rarely happens. When requirements documents are written from just a business perspective, key technical details are lost. When requirements focus only on the technical, key business requirements are left unmet.

Stakeholders often understand their requirements, but can’t communicate them effectively in both languages.

3. Insufficient involvement from stakeholders


When key stakeholders are not involved, major requirements can be unintentionally omitted.


4. Whole-brained thinking is needed to develop complete requirements

4True requirements setting works the whole brain: left-brained analysis is needed to break down the requirements to their most basic elements, and right-brained synthesis is used to turn these pieces into an innovative plan.

Most people are dominant in one side of their brain, so they struggle with the other side.

5. Paperwork is a pain and time is your most valuable resource

5An effective requirements document takes time and attention to detail which is often hard to commit to when you have a business to run.

The urgency of the project, coupled with the pain of creating the requirements document, often results in businesses taking shortcuts.

1. Standish Group – CHAOS Report – www.projectsmart.co.uk/white-papers/chaos-report.pdf
2. Gallup – The Cost of Bad Project Management – www.gallup.com/businessjournal/152429/cost-bad-management.aspx#1
3. Geneca – Up to 75% of Business and IT Executives Anticipate Their Software Projects Will Fail -www.geneca.com/75-business-executives-anticipate-software-projects-fail/
4. Karl E. Wiegers – Inspecting Requirements – StickyMinds.com Weekly Column, 30 July 2001
5. Barry W. Boehm and Philip N Papaccio – Understanding and Controlling Software Costs – IEEE Transactions on Software Engineering, Vol. 14, No. 10, pp 1462-1477.
6. PMI – Requirements Management: A Core Competency for Project and Program Success –

7 PMI – Requirements Management: A Core Competency for Project and Program Success – https://www.pmi.org/~/media/PDF/Knowledge%20Center/
PMI-Pulse-Requirements-Management-I n-Depth-Report.ashx
8 Timothy G. Olson – Successful Strategies to Improve Your Requirements – NDIA 2005 Systems Engineering Conference.

9 IRMA International – Effort Estimation Mode for Each Phase of Software Development Life Cycle – http://www.irma-international.org/viewtitle/46269/
10 University of Southern California – Phase Distribution of Software Development Effort – http://csse.usc.edu/TECHRPTS/2008/usc-csse-2008-836/