A new survey by IAG Consulting finds that among two-thirds of companies polled, it is "improbable" that an IT project will be considered an overall success, due to inadequately or improperly gathered business requirements.
Fifty percent of these companies' projects could be termed "runaways," marked by at least two of these three factors: Taking more than 180 percent of estimated time to be completed, going over 160 percent of the established budget, and delivering less than 70 percent of the desired capabilities.
The other 32 percent of the companies surveyed enjoy a "probable" chance of success for IT project, according to the study, which surveyed more than 100 midsized and Fortune 1000 companies in North America.
"The numbers here came back far, far bigger than we ever expected," said Keith Ellis, vice president of IAG, which is based in the U.S. and Canada. The independent company focuses on business requirements analysis.
"One big reason that really stands out for me is that people tend to look at requirements as a document, not as a process. If you do that you're going to fail," Ellis said. "Here's one of those cases where the means is as or more important as the end."
Good requirements analysis can ensure a project's scale is minimized, but not at the expense of meeting a business' needs, according to the study. Another hallmark sees changes to requirements occurring infrequently, because the proper level of consensus has already been reached.
The study weighed development projects, which cost at least US$250,000 and involved "significant new functionality," as opposed to matters like maintenance or a rollout of new client machines. The projects consisted of either internally developed software or application implementations. Their average scope was US$3 million, according to IAG.
The damage was worst when non-IT business analysts were in charge of the requirements. Those projects came in at nearly double their budgets and took more than 245 percent of their allotted time, according to IAG.
When IT workers managed the requirements analysis, the results were only slightly better, with budget overruns at 163 percent and time at 172 percent.
The best results came when business and IT worked together on defining requirements. There, budgets ran an average of 143 percent and time, 159 percent.
The study suggested many companies are working on an ad-hoc basis. More than half "did not have professional, trained staff dedicated to the function of getting requirements, and the vast majority view the process of getting requirements to be inefficient," the report states.
Companies should form a "center of excellence" for business-requirements gathering managed by both IT and business employees, the study concluded.
IAG conducted the study with the help of analyst Michael O'Neil and Info-Tech Research Group over the past several months, Ellis said.