Requirements management based on strategies, goals and indicators

In this article, I’ll discuss how organisations can go about integrating requirements management with the company’s vision, strategy and business goals.

The specific requirements mentioned in this article have to do with increasing customer satisfaction and the usage of the e-services offered by a software company. To help the company clarify its management of its business requirements it can make use of balanced scorecards and KPIs (key performance indicators).

What’s a balanced scorecard?

No, no, put your bowling shoes away, this is not THAT kind of scorecard!

Basically, a balanced scorecard is a business management strategy with a proven track record of being extremely effective in helping companies devise goals in a holistic manner: one that gives value to four main aspects of a company’s existence. In other words, it helps you hit a strike each time when chasing your goals.

It is very easy to come up with a goal that only makes reference to the company’s operations, and thus completely ignoring the financial, human resources and customer service aspects.

The four parts of a balanced company (and scorecard)

Business operations are inextricably linked to the company’s financial state: the richer your company is, the more aggressively it can behave in the market, increasing its operations and being able to foot the cost of hiring more employees, operating its systems for a longer time and at a higher turnover rate. You know what they say, money makes the world (and the company) go round!

Equally important is the HR aspect in all this. If a company plans to up its production, this will inevitably affect the employees’ lives. Longer work hours, tighter deadlines, more intense workloads; they all take a toll on people, and satisfactory ways to maintain morale and compensate their efforts have to be taken into account during the planning stage.

Finally, customer services is a key component of a business’ reputation: if a company wants to compete more aggressively in today’s social media-dominated marketplace, then it must be prepared to play a more proactive role in figuring in its clients’ online conversations and to provide real-time response to any support requests or complaints as they emerge.

A simple balanced scorecard takes into consideration these four fundamental aspects of a company’s existence, however the concept of a balanced scorecard has been developed over the years to include even more ‘perspectives’ as they are known, including the company’s vision, strategy and objectives. This is popularly known as a strategy map.

Adapting the balanced scorecard (or strategy map) for software requirements

Just as a balanced scorecard gives a quick overview of a business’ general health by focusing on four main aspects: operations, finances, human resources and customer services, the same can be done for your software requirements by tweaking this basic formula accordingly.

By way of analogy, business operations would be equivalent to the software’s functionalities – what is should be able to perform. Finances in business is a matter of the assets available that allow the company to exchange for other resources it needs. In software testing this parallels with the money and time resources of the team, two precious and rare resources indeed for many companies!

The human resources section on a company’s scorecard when mapped out onto software requirements could translate into a description of the attention reserves of the tester and how this finite amount of energy should be prioritized and expended into useful work on the requirements at hand.

Finally, customer services translates neatly into the quality of the user experience and any feedback collected from users testing the software in real-life applications.

Introducing KPIs

In the business world, the course of action taken by the organisation should be aligned with its overall vision, strategy and goals. At the end of the day, organisations do not take actions for the sake of doing something, but for the specific aim of increasing their business’ market share and brand equity.

The ultimate metric that determines whether a particular action should be pursued further or abandoned for a different one is its impact on the bottom line, however in larger companies it simply isn’t feasible to measure everything against this particular standard. You don’t want to fall victim to analysis paralysis now, do you?

Often, a more realistic outcome is chosen, such as customer satisfaction and increased usage of services.

KPIs are metrics that give information regarding the employees’ efforts in reaching this goals by measuring aspects of their performance in an activity which contributes towards the achievement of these goals.

Choose the best indicators for your goal

It is important to choose KPIs carefully for a given goal, as not all indicators may accurately reflect progress towards goal achievement.

Increased customer satisfaction can be measured in terms of the number of customer support requests that remain unresolved by the end of a given period.

If from one week to the next, the number of unresolved support requests decreases, then we can logically infer that a larger number of our customers are happily using our services problem-free.

In this example, it is easy to propose total number of support request as a possible KPI, however a lower number of requests does not necessarily mean that more of our customers are satisfied with the service they’re receiving, maybe the number decreased because less customers are using our services, or they’re finding it difficult to lodge a support request in the first place!

Using KPIs for requirements management

In the case of a requirements management scenario, there are several KPIs that could be monitored and the exact nature of these KPIs will differ according to the particular project and the company that is working on it.

However, the importance of selecting a small number of highly meaningful figures to track is universal and the temptation to have a lot of KPIs should be resisted at all costs, otherwise the technique will be too cumbersome and this defeats the purpose of allowing you to swiftly implement any changes when the situation calls for them.

A handful of useful KPIs for requirements management include:

• Number of requirements completed over a given time period (daily or weekly);
• Percentage of requirements to be reworked;
• Number of modifications coming from requirements errors per month;
• Time between system completion to delivery;
• Percentage deviation from total budget

A strategy-based requirements management process

This overview of the role of balanced scorecards and KPIs in business performance management and their implementation to requirements management brings us back to our original problem.

A hypothetical software company X, using a balanced scorecard, or more precisely, a strategy map, details its vision as becoming the next leader in the field of e-shopping cart systems. This can be achieved by adopting an aggressive strategy which focuses on increasing the usage of its services among its clients. The main objectives it will pursue are increasing customer satisfaction among its existing clients and marketing its services more effectively to prospective users.

Apart from the list of basic KPIs mentioned above, other project-specific KPIs could be: number of support requests resolved in a timely and satisfactory manner and rate of new clients that purchase its services, which reflect increased customer satisfaction and service usage respectively.

Putting it into action

Managing requirements based on strategies, goals and indicators is tough work, but it sure does pays off. It ensures that your company acts in a way which is consistent with its thinking, its brand image or corporate vision.

By including the balanced scorecard technique, or its more advanced iteration, the strategy map, your organisation can be more aware of the many ways how a certain course of action impacts different aspects of your business, and hence settle on a modus operandi which profits the company from every perspective.

Finally, choosing KPIs wisely makes all the difference between choosing an action which truly helps you make progress towards achieving your goals, or one that has your company going in circles around the challenges it wants to overcome.

To start managing requirements more strategically use the following questions to make sure you’re taking advantage of balanced scorecards and selecting KPIs:

1. Which functions should the software perform?
2. How much time will be allocated to testing?
3. Which requirements are the most important?
4. What do users think of our work so far?
5. Which key metrics are we measuring and how are we performing today compared to the previous day/week/month?