Is Your Dev Budget Being Squandered?

One-third of expenditures on development projects are squandered by three-quarters of organizations, because they lack consistent requirements and discovery management processes, according to a recently released study.

The finding was based on a survey of 450 enterprises by IAG Consulting, a New Castle, DE-based provider of professional services. "One of every three dollars in development is getting wasted by poor requirements," said Keith Ellis, the report's author and a vice president at IAG Consulting, in an interview.

Furthermore, nearly three-quarters of those surveyed were using low maturity level development processes: classified as Level 1 or Level 2. (Five is the highest maturity level.) Those organizations waste up to 39 percent of their dev budgets due to inadequate requirements definition and maturity. In some cases the loss could increase to 50 percent of overall IT spending on development and maintenance, according to the report.

It also concluded that organizations with insufficient requirements maturity hit their business objectives just 54 percent of the time, while taking 35 percent more time to reach that result. By comparison, those at Level 4 maturity will outperform their peer groups by10 percent.

Lower skilled developers in a company with high maturity requirements can outperform more highly skilled ones in a low requirements organization, Ellis said.

While the findings may appear self-serving coming from a consulting firm that provides requirements definition and management professional services, industry analysts said the trend is consistent with their own findings.

"Of course the report serves AIG well given their business," noted InfoTech Research Group analyst Brendon Kerton in an email. "At the same time, there was nothing in the report that surprised me and that we haven't seen with clients we speak to."

Development organizations struggle with processes and QA/testing and often project management, she added. "They end in a discussion about the struggles to elicit and communicate requirements," she said.

"Many of our clients start off thinking about requirements work as easy and something any IT person or business person can do. Requirements are rarely easy to 'gather' like eggs in an Easter egg hunt. Elicitation is often as much about business design as business partners' work through their needs."

Architects and dev managers must have strong facilitation skills, business process design skills and political savvy to work through those issues, she added. "The person has to be able to organize what they've heard, find the patterns, articulate the data and rules and document and communicate in ways that both business people and IT developers, designers and architects can all understand."

Macehiter Ward-Dutton Principle Analyst Bola Rotibi said implementing definition requirements is a longstanding problem. "This has been a problem for a long time, part of the problem is getting the definition process right and the key challenge is to get people to communicate," Rotibi said in an interview.

Those organizations that move to Agile development processes are more likely to achieve higher success rates, she said. "In talking to people who have been doing Agile development, they have noticed a decrease of defects," she said, "and increased satisfaction in quality."

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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