We have recently published an IMF Report based on a Web Forum presentation given by Hans Eckman on Requirements Change Management. Hans is a Vice President and Enterprise Business Analyst for SunTrust. Below is a brief excerpt from the report on a couple of studies showing how much change can actually affect a project’s costs:

“One study by Barry Boehm stated that letting a defect get into production will likely cost you 100x more than had you caught it in your initial requirements and design phases. However, in a new study he conducted along with a partner, they found that on really small trivial projects the cost increase is really only 5:1. If it costs you $200 in man hours and effort to change a requirement then that means for a small project you are looking at $1000 in production, or possibly even $10,000 on a larger project. Also, current software projects spend about 40-50% of their work effort on avoidable rework. That means almost half of everything you change in a project could have been avoided. There are two major sources they found in their research of avoidable rework. One was hastily specified requirements and the other was nominal-case design and development.

Figure 1 shows the distribution and cost increase of these changes over time. There are two studies, one by Tassey and the other by Boehm, which tried to figure out how much a defect costs for every unit of cost as you move further along the lifecycle. A defect could be an error, omission, basically anything that needs to be changed. In requirements and design, that is where you point out the base unit. In this case there is one cost unit. For example, if your cost to do something is a blended rate of $65/hour then that is your multiplier as well. Once you get into coding or unit testing Tassey found the cost was 5x as much. Boehm’s study showed the cost was 3x as much…”

Members can download the full IMF report, “On Lock-Down: Requirements Change Management,” HERE.