The Next Leap in Productivity: What Top Managers Really Need to Know about Information Technology

2.8. Participate in Writing the Business Requirements

If you ask an experienced software consultant to name a basic ingredient that is common to all successful IT projects, the answer you are likely to hear is this: the right set of business requirements.

Since all IT projects begin by creating a list of business requirements, it is essential for top management to be involved in the process of generating this list. Like the questions listed earlier, business requirements are not written in technical language. Here's a list of typical business requirements:

1. Reduce production costs by 4% in 12 months.

2. Increase e-commerce transactions by 10% in six months.

3. Reduce average transaction time by 40% in nine months.

4. Increase revenue from online catalogue sales by 15% in six months.

Writing and validating business requirements is an incredibly important piece of the IT puzzle. But do not take our word for it. Kaiser Permanente, the health maintenance organization (HMO) giant based in Oakland, California, recently installed software to improve its processes for generating business requirements of new IT projects. Kaiser, which spends about $1 billion annually on IT, estimated that it would save $60 million by improving the way it defined business requirements for new systems.

Now that is a significant cost reduction. Before you start thinking, "Gee, that's a no-brainer, I'm sure we're already doing something like that at our company," please be aware that most IT organizations rely on outside ...