THE STATE OF REQUIREMENTS

MANAGEMENT REPORT.
The results of a recent industry survey shed light on the latest trends,
challenges and solutions in software product development.

OVERVIEW
Reality or hype? Discover what product teams are really doing.
Whether your role is Product Manager, Project Manager, Business Analyst, Development Director, QA
Manager or Chief Requirements Guru, if you are involved in the planning and development of products,
software applications or systems at your company, this
report is for you.
Gain insights into:
And the survey says:
 What are the biggest challenges in innovation 67% of teams will use or
that companies face? would like to use requirements
 Where are companies getting their next great
product ideas? collaboration and management
 What are the top barriers to success?
software in next 12 months.
 Which metrics matter most when measuring
success?
 Is the Agile process over-hyped?
 Which tools top the wish list?
 How does collaboration apply to requirements management?
 What frustrates people more – scope creep, unrealistic expectations or lack of testing?
 Which genre of music is most popular? OK, that one we threw in just for fun.
Take ten minutes to read the full report and learn more about the latest trends, challenges and solutions
that other organizations are focused on this year. Some survey results you might expect, others might
surprise you. Either way, it’s time to cut through the hype and uncover what teams are really doing to
successfully plan and develop new products in a customer-driven economy.
ABOUT THE SURVEY

This survey was conducted by Jama Software in partnership with Ravenflow. The report includes data
collected from 203 survey participants from April 15 to May 9, 2008. Professionals were invited to
complete the online survey in return for a copy of this published report. For privacy, all survey
participants, responses and comments remain anonymous in this report. Ninety percent of participants
completed the entire survey. Survey participants represented a world-wide audience and a diverse
sampling. Thanks to everyone who participated. Here are the breakdowns by role, company size,
industry and average project team size.

Role in the Organization:

40% Business/Requirements Analyst
19% Project Management
10% Product / Program Management
9% Product Development / Engineering
8% Outside Consultant
5% Executive Management
3% Research / Usability / Design
7% Other

Company Size (Annual Revenue):

26% Greater than $1 billion
14% $500 million - $1 billion
17% $100 - $500 million
14% $25 - $100 million
29% Less than $25 million

Industry:
28% Technology / Software
17% Financial Services / Insurance
17% Aerospace / Defense / Government
11% Healthcare / Medical Devices
8% Telecommunications / Media
3% Automotive / Consumer Products
3% Energy / Chemical / Utilities
12% Other

Team Size (Project Team & Stakeholders):

61% Less than 25 people
28% 25 – 50
6% 50 – 100
3% 100 – 250
2% More than 250
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The State of Requirements Management Report © 2008 Jama Software

QUESTION
In your opinion, what are your company’s biggest challenges when it
comes to innovation? (Mark all that apply)

Gaining a clear understanding of customers needs 65%

Documenting all the requirements 65%

Ensuring what's being built is what was planned 61%

Communicating the requirements to the team 49%

Prioritizing requirements to decide what to build next 43%

Other 11%

0% 10% 20% 30% 40% 50% 60% 70%

SURVEY RESULTS
Three fundamentals of requirements management top the list.
The buzz around “innovation” is everywhere – in the news, at events, on the Web. A Google search will
deliver up over 150 million pages related to innovation. For context, that’s more than Britney Spears.
Despite all the enthusiastic chatter, innovation is easier said than done.
What are the real challenges that teams face when
developing products their customers really want?
“Managing the rapid
One thing is clear – in order to innovate successfully, you
must manage requirements successfully. change of requirements and
As the data shows, the top challenges map to three traceability is our toughest
fundamentals of requirements management – gaining a clear
understanding of what customers want, documenting all the
challenge.” – Survey participant
requirements and then ensuring what’s being built is what
was planned. There’s no substitute for the fundamentals.
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The State of Requirements Management Report © 2008 Jama Software

QUESTION
How would you characterize your company’s approach to innovation?

Other, 9%
Risk Taker, 32% Cash Cow, 11%
Low Cost
Provider, 13%
Market Reader,
34%

Risk Taker – We seek to be first to market with Market Reader – We try to be a fast follower, and
breakthrough ideas. focus on incremental improvements.
Low Cost Provider – We focus on operational Cash Cow – We try to milk as much revenue as
efficiencies by delivering similar products at lower costs. possible from existing products.

SURVEY RESULTS
When it comes to product innovation – speed does matter.
A McKinsey Research report shows that over 70% of senior executives say that innovation will be at
least one of the top three drivers of growth over the next three to five years. So, what approaches are
companies taking?
Be first to market with a breakthrough product or be fast to “We’re a fast follower.
follow with a better one – that’s how the majority of those
we surveyed characterize their company’s approach to We watch the competition
innovation. closely and then make it
Did different industries answer differently? What about the
size of a company? Surprisingly, neither size nor industry had
better.” – Survey participant
a significant variance when we filtered the survey results.
The common theme represented by the responses and
comments provided is that whether a risk taker or a market reader, the majority of those surveyed
viewed rapid product development as a key driver to their ability to innovate.
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QUESTION
What are your sources of new product ideas and requirements?
(Mark all that apply)

Feedback from customers & partners 71%

Internal product teams 59%

Visionary executive 46%

R&D studies 32%

Other employees 28%

External consultants 27%

0% 10% 20% 30% 40% 50% 60% 70% 80%

SURVEY RESULTS
Think R&D studies hold your next great idea? Ask your customers.
A similar “a-ha” is occurring at companies everywhere – they are embracing the fact that customers are
willing to openly share their ideas and participate in the product planning and development process. It’s
less expensive, real-time, and as unfiltered and pure as a
good Hefeweizen. “Lavish R&D budgets don’t
In the world of customer-driven product development, it’s a
trend that’s been underway for several years, but it’s
deliver better performance.
recently hit another gear with the explosion of online Customer focus does.”
customer communities and Web-based collaboration tools.
– Booz Allen Hamilton,
As this data illustrates, the #1 source for new product ideas Global Innovation 1000 Report
and requirements is feedback from customers and partners.
Does this mean traditional R&D goes away? Does it mean your visionary executive takes a back seat?
Not necessarily. It simply means that companies that achieve greater alignment with their customers
achieve greater results. Your customers are leading the conversation. Are you listening?
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QUESTION
What are the goals of the projects your team works on?
(Mark all that apply)

77%
80%
64%
70%

60%

50%

40% 28%
30%

20% 8%
10%

0%
Other Reducing the costs Enhancing existing Bringing new
of manufacturing products products to market
existing products

SURVEY RESULTS
Enhancing existing products outweighs developing brand new ones.
Is this surprising? Maybe not. New products tend to grab the spotlight, but they also tend to be slower
to develop, more expensive and higher risk. Companies are finding success through smaller, more
focused releases with incremental enhancements over time.
These survey results support the trend toward more and
more product development teams adopting the philosophy
“Our goal is to deliver quality
of “release early and release often”. software in a reduced
What we found surprising was that only 28% answered that timeframe using an iterative
“reducing costs” was a goal. You read and hear a lot about
efficiency being a top initiative especially during tougher approach to development
economic times, but these survey responses didn’t reflect
that.
and systematic testing.”
– Survey participant
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QUESTION
Let’s talk about complexity – on average, how many requirements does
a typical project or product contain?

5000+, 5% I have no idea, 6%

1000 - 5000, 14%

< 100, 22%
500 - 1000, 19%

100 - 500, 34%

SURVEY RESULTS
No one ever said this job was easy. I hope you like requirements.
Maybe we should run a contest for the largest requirements specification document – 800 pages, a
thousand pages? For the 5% whose projects on average have over 5,000 requirements each, there’s a
Guinness World Record just begging to be set. Yes, we checked and there isn’t one yet.
This question provided some interesting segmentation.
As you might anticipate, the more complex the projects (meaning we filtered on those with 500 or more
requirements per project), the lower the average success rates, the greater the time spent managing
changes to requirements, and the greater the interest in using requirements collaboration and
management software.
Does the size of the team have any correlation to the size of projects? Yes, the bigger the team, the
bigger the projects. Whereas overall 72% of those surveyed averaged at least 100 requirements per
project; for those teams with 25 or more people, 90% averaged 100+ requirements per project.
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QUESTION
What percentage of your time is spent each week dealing with changes
to requirements?

Greater than 50% It's not my job, 7% Less than 10% of

of time, 8% time, 24%

25 - 50% of time,
23% 10 - 25% of
time, 37%

SURVEY RESULTS
The vast majority spend at least 10% of their week managing changes.
Oh man, you’ve got to really feel for the 8% that spend over half of their time just managing changes to
requirements. It’s a reality of product development though, customer needs change.
So, how can you best manage the change and keep everyone in sync without killing yourself?
As Forrester Research defines it, that’s where requirements
management solutions help by: “Managing the rapid
1) storing requirements in a central location
2) tracking relationships among requirements and artifacts change of requirements and
3) controlling changes to individual requirements and groups of traceability is our toughest
requirements
This was another interesting question to segment the results
challenge.” – Survey participant
on. When we look at those that spend at least 25% of their
time or more managing changes, success rates were lower,
the #1 challenge shifted to “ensuring what’s being built is what was planned” and the interest in
requirements collaboration and management software increased to 80%.
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QUESTION
How do you measure the success of your delivered projects/products?
(Mark all that apply)

Customer satisfaction 83%

Quality assurance / safety ratings 44%

Revenue 39%

Cost savings 39%

Speed to market vs. competition 24%

Buzz (awards, news, reviews) 8%

Other 13%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

SURVEY RESULTS
Customer satisfaction outshines revenue and other success metrics.
Surprised by this answer? Why isn’t revenue higher?
This is a question where role plays a factor. For business analysts and project managers, which
represent 59% of those surveyed, customer satisfaction reigned supreme. For product managers and
executives, revenue was the top metric they cared about, with ROI being a popular write-in theme for
“other”.
These results speak to the interesting dynamic that exists
between project management and product management. “Success for us is measured
As Jeff Lash, the author of the blog, How To Be A Good by the return. What is the
Product Manager, writes, “To avoid conflicts between
project management and product management, product ROI back to the business?”
managers, project managers, and project teams should all – Survey participant
agree on shared goals and metrics as much as possible.”
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QUESTION
How often are the projects or product launches that you’re involved
with delivered on time and on budget? Let’s be honest now…

35% 31%

30%
24%
25% 22%

20% 17%

15%

10% 6%
5%

0%
Less than 20% 20 - 40% 40 - 60% 60 - 80% Greater than
(Ouch!) 80% (Jealous?)

SURVEY RESULTS
For the large majority, success rates are 60% or lower.
It’s like Shaquille O’Neil shooting free throws – you expect better, but the reality is you’re lucky if just
60% of the attempts are successful.
Why are these success rates what they are? Are we all just numb by the same old story about project
failure? Billions are lost each year on bad software. Got it. Delays in product development can
bankrupt companies. Yep.
In the IEEE Spectrum Report: Why Software Fails it
suggests, “The biggest tragedy is that software failure is for “It’s all about an on-time
the most part predictable and avoidable. Unfortunately, delivery. Did we meet the
most organizations don’t see preventing failure as an urgent
matter…” target date?”
Do you buy that? Something tells us it isn’t just – Survey participant
organizational complacency, but that there’s much more to it
than that. In the next question, we explore the leading
causes for failure.
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QUESTION
When a project/product is NOT viewed as successful, what typically are
the causes? (Mark all that apply)

Scope creep 70%

Missed or poorly defined requirements 66%

Unrealistic schedules or expectations 66%

Team communication and collaboration issues 49%

Misunderstanding of what customers want 43%

Issues with change management 37%

Lack of executive support 25%

Lack of testing 22%

Team didn't buy into the project 12%

Other 9%

0% 10% 20% 30% 40% 50% 60% 70%

SURVEY RESULTS
Beware of the dreaded “scope creep”.
It lurks by the water cooler, on customer status calls and in team meetings – it’s the dreaded scope
creep and it wreaks havoc on projects. It’s not alone though, tied for a close second are its nasty
cousins “missed or poorly defined requirements” and “unrealistic schedules or expectations”.
How do you avoid these? Tools can help, process is critical, but more than anything else it takes really
skilled people to keep these issues in check. Otherwise, these issues will continue to creep up (no pun
intended) and create unnecessary frustration, delays and costly rework for organizations – all of which
lead to failure.
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QUESTION
Of these barriers to success, which ones do you PERSONALLY find the
most frustrating? (Mark all that apply)

Scope creep 31%

Missed or poorly defined requirements 40%

Unrealistic schedules or expectations 43%

Team communication and collaboration issues 21%

Misunderstanding of what customers want 28%

Issues with change management 16%

Lack of executive support 23%

Lack of testing 12%

Team didn't buy into the project 7%

Other 4%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

SURVEY RESULTS
“Unrealistic schedules or expectations” drive people crazy.
Even though scope creep was the top cause for failure,
“unrealistic schedules or expectations” takes the top prize in “Some of the biggest overall
what professionals personally find most frustrating.
problems come from
Some barriers you can overcome mid-project, but when
unrealistic expectations or schedules get set and approved, it’s
pursuing what the customer
difficult later to hit the reset button with stakeholders and says they want, without
customers. It’s a lesson even the most experienced product
development teams have experienced. determining what they really
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need.” – Survey participant

The State of Requirements Management Report © 2008 Jama Software

QUESTION
“Collaboration” is a word being talked about a lot. In your opinion, how
does collaboration apply to requirements management?

78%
70%
80%
63%
70%

60%

50%

40%

30%

20%

10%

0%
Everyone on the team has Requirements, related Everyone on the team is
access to the items and discussion in sync on the latest
requirements threads are all captured in version of the
a centralized place requirements

SURVEY RESULTS
Well, actually collaboration applies to all of the above.
Next to innovation, “collaboration” might be the second biggest buzzword in business right now. So,
what does collaboration really mean as it applies to requirements management? We were curious too,
so we asked the question.
As the survey results show, no one clear answer stands out. “Requirements management
Essentially, collaboration embodies all three of these things –
team-wide access, centralized place of all assets, and continuous is a communication process.
alignment to the latest version of the requirements.
Collaboration happens when
Some experts view collaboration as one of the key ingredients to
being more successful with requirements management. And,
everyone has the same
based on our own personal experience, we agree. A collaborative understanding of the
approach is a faster, more successful way to stay in sync
throughout the planning and development cycles – both internally requirements.”
(with your team) and externally (with your customers and – Survey participant
partners).
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QUESTION
Which process does your team use?

Waterfall / Modified Waterfall 25%

Iterative / Spiral 9%

Agile (or some flavor of it like XP) 6%

RUP (or some flavor of it) 12%

We aren't purists, we use a mix of processes 37%

We actually don't believe in process 4%

Other 6%

0% 5% 10% 15% 20% 25% 30% 35% 40%

SURVEY RESULTS
Surprised? Only 6% are pure Agile shops. Many use a mix.
There’s no denying the momentum that Agile has in the product development world, but is it
overhyped? At Jama, we use a modified Agile process ourselves and have used various processes
before, so we were curious to learn what other teams are really doing.
As the data illustrates, the largest segment is actually using a mix
of processes. A quarter of survey respondents are using a “It depends highly on the
traditional or modified Waterfall method exclusively, but few
beyond that are purists of any one process.
project characteristics, so it
So, as one survey participant pointed out, “It’s important for the varies from Waterfall to
tools to be flexible to adapt to whatever processes your team or Agile.” – Survey participant
company uses, because inevitably they will change.”
These survey results and our own experiences confirm that no
single process is a silver bullet. Different projects, different
products, different teams – they require different processes. Adapt and survive.
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The State of Requirements Management Report © 2008 Jama Software

QUESTION
How does your team currently document and communicate
requirements? (Mark all that apply)

Spreadsheets & documents (e.g. Word & Excel) 83%

Email 40%

Meetings (daily stand-up) 37%

Requirements collaboration & management software 32%

Intranet 30%

Requirements modeling / visualization software 29%

Whiteboard / sticky notes / task cards 21%

Blog / wiki 10%

Other 4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

SURVEY RESULTS
Help! We’re stuck in the land of documents and spreadsheets.
It’s pretty amazing when you think about it – the tools (e.g. Excel spreadsheets and Word documents)
that your kids might use to do their next homework assignment are the same ones professionals use to
manage massive software development projects.
Sure, these tools are ubiquitous and we all know how to use them, but are they really the best way to
capture and communicate thousands of requirements for complex projects with distributed teams?
As this survey data supports, more often than not, business analysts and project managers rely on
manual effort and Microsoft Office to accomplish the documentation and communication of
requirements.
But, as Forrester points out in their recent Wave Report for application development professionals,
“Purpose-built requirements management tools dramatically increase the efficiency of proper
requirements management practices.”
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QUESTION
What’s on the list of software tools your team will use or would like to
use in 2008? (Mark all that apply)

Requirements collaboration & management 67%

Requirements modeling & visualization 55%

Project management 53%

Product lifecycle management (PLM) 24%

Application lifecycle management (ALM) 20%

Idea management 18%

Portfolio management 17%

Other 5%

0% 10% 20% 30% 40% 50% 60% 70%

SURVEY RESULTS
“Requirements collaboration & management” tops the wish list of tools.
Why do you need specialized tools – can’t you just manage everything in documents? It’s a common
question, and one often asked by senior management when presented with a budget request to buy a
specialized tool.
As Forrester Research defines it, “The purpose of “Tools improve the efficiency
requirements management tools is to maximize the likelihood
that a development initiative will deliver applications that
of mature requirements
function as desired.” management practices.”
This survey shows that two thirds of organizations are – Forrester Research, Requirements
interested in using requirements collaboration and Management Wave Report, 2008
management software in 2008. What’s on your list?
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JUST FOR FUN
What is your favorite genre of music?

I'm not a fan of Other, 14%

music, 5%
Alternative, 4%
Country, 6%
Rock, 44%
Classical, 11%
Jazz, 8% R & B, 7%

Hip Hop, 2%

SURVEY RESULTS
Work hard. Play music. A shared mantra for product development.
You know what they say, “All work and no play, makes product development a dull job”, or something
like that.
We admit, there’s no real business value to this question being a part of this report other than to remind
us that despite the challenges and never-ending demands of product development, this profession still
rocks. Would you rather be a lawyer? Forget about it.
There are definitely times when managing requirements can “I like a bit of everything.
feel like a thankless and unglamorous gig. But, as this report
illustrates requirements management plays an important role in
Who can choose only one
the bigger picture of being able to successfully develop style? ”
products on time, on budget and within scope. And, a little
– Survey participant
music to keep us sane during the process never hurts, right?
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CONCLUSION
2008 is the year of requirements collaboration and management.
The goal of this survey was to identify what product development teams are really doing this year to be
more successful, and to hopefully cut through some of the hype and buzz that’s out there.

So, what have we learned from this survey? Here’s a summary of the findings:

1) There’s no substitute for fundamentals. In order to innovate successfully, you must manage
requirements successfully. The top 3 challenges to innovation were: gaining a clear
understanding of customer needs, documenting all the requirements and ensuring what’s being
built is what was planned.
2) Customer-driven product development. R&D studies and visionary executives are helpful, but
your customers hold the keys to your next product ideas and requirements. The Web has
ushered in faster and more efficient ways to elicit feedback from customers to help you build
the products they really want.
3) Customer satisfaction rules. Revenue? Buzz? Time to market? Which success metric is most
important to product development teams? Customer satisfaction is #1.
4) Beware of scope creep. Scope creep tops the list for the #1 cause to projects that fail.
Followed closely by missed or poorly defined requirements and unrealistic schedules and
expectations.
5) Demystifying “collaboration”. A popular buzzword, collaboration means different things to
different people. As it applies to requirements management, it embodies three things:
everyone on the team has access to the requirements, everyone is in sync on the latest version
and all requirements, related artifacts and discussion threads are captured in a secure and
centralized place.
6) When it comes to process, we’re not purists. There’s a lot of media attention around Agile
processes, but few organizations have shifted to being a pure Agile shop – in fact only 6% of
those surveyed. Most organizations are using a mix of processes, so tools must be flexibile
and adapt to your processes.
7) Documents still dominate, but RM tools top the wish list. Not surprisingly, over 80% of
professionals manually use MS Office to capture and communicate requirements using
documents and spreadsheets. However, when asked which tools they plan to use or would like
to use this year, requirements collaboration and management tools top the list.

Let us know your thoughts.

Did this report confirm what you already knew? Did some of the findings surprise you? What other
things would you like to see in future surveys? Let us know, we’re interested in your feedback.
Send your thoughts to: John Simpson, Jama Software, [email protected]
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ABOUT JAMA SOFTWARE

Jama Software is a team of experienced project management, product development and Web
professionals who believe in taking a collaborative approach to requirements management. We are
dedicated to building professional-grade, Web-based applications that help companies ensure their
product development projects succeed – delivered on time, on budget and meet customer needs.

The result is an application called Jama Contour. To learn more about Contour and to help shape the
future direction of our products, join us in Jama Backstage, an online collaborative forum of
professionals who care about moving requirements management forward. Free trials and other
educational resources are available upon request.

PRODUCT FORUM

503.922.1058 | [email protected] | www.jamasoftware.com

ABOUT RAVENFLOW

Ravenflow is a leading provider of rapid requirements definition software. Ravenflow accelerates

application project time-to-market by reducing the time required for all stakeholders to approve
requirements, reducing developer rework due to requirements errors, and by generating test cases
automatically. Business analysts and stakeholders across all industries depend on Ravenflow's award-
winning RAVEN application to quickly visualize and validate software requirements.

For more information, visit www.ravenflow.com.

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