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3.1 Critical Requirements Analysis



.1 Introduction

In the earliest Processes of a project’s life cycle, a large amount of effort can be spent identifying potential issues and defining project requirements.

Very often, however, little consideration is given to:

The size of each issue - does it really play a major part in determining the success or failure of the project?
The validity of each requirement - what impact will meeting the requirements have on the business?

Poor requirement analysis can result in the missing business objectives. This is because many of the issues resolved and requirements met yield small or intangible benefit to the business, particularly when compared with project costs.

Performing a Requirements Analysis can:

Formulate a standard definition of the project objectives
Identify major issues and requirements
Recognize unjustified requirements and minor issues
Provide a firm basis for the evaluation of options to help ensure business success.

By using Critical Requirements Analysis, true critical issues and requirements are articulated in a structured way and attention is focused on these rather than on minor requirements. Minor issues and requirements should be documented at any point where they are discovered, and if they can be solved at little or no extra cost, incorporated into the project deliverable. What is important is that in assessing feasibility, or evaluating options, you only use critical requirements, not minor requirements.


.2 Critical Requirements Analysis Steps

Project Initiation and Planning

Use Critical Requirement’s Analysis during the Project Initiation and Planning Process to help define the business scopes of the project and to identify or evaluate the major requirements.

Requirements Definition

To produce a Requirements Model, carry out a more detailed analysis of the proposal to identify project requirements and set them within a hierarchy that illustrates their relative contribution to the achievement of Business Objectives.

Step 1 - Determine Business Objectives

In order to make an assessment of the business implications and benefits of any proposed project; it is necessary to answer the following:

What is the Business Objective of the project?
What are the major elements that play a critical role in achieving this objective?

In some complex environments, it is not possible to produce a simple statement of Business Objectives, although an attempt should still be made, if only because

Management may not have previously tried to refine individual functional objectives into a single corporate objective.

Whatever the case, it is important within Critical Requirements Analysis that collective agreement is reached on a statement of the Business Objectives of the project.

Where a few crisp objectives cannot be defined, it may indicate that more than one project may be necessary.

Step 2 - Determine Critical Performance Areas

Critical Performance Areas (CPAs) are those areas that have greatest influence on whether or not Business Objectives are met or where there is the greatest opportunity for risk. The definition of Critical Performance Areas is:

"Areas in which an effective level of performance must be maintained in order for the project to meet its objectives."

As with the Business Objectives, it is possible that no single view will emerge immediately. A process of rationalization and discussion will have to take place in order to reach agreement on the Critical Performance Areas.

Once those involved agree, they are able to begin to document the Critical Requirements Analysis model. This shows the top level Business Objectives (as a single line statement wherever possible) and their related functional Critical Performance Areas

The project team should provide a brief narrative description for each Critical Performance Area as a way of confirming and documenting their common understanding.

When considering Critical Performance Areas, it is important to concentrate on what has to be achieved. In this way, the functions that truly influence the success or failure of the project are identified without the inhibitions of any physical constraints or historical precedents, which may have determined the existing functional or organizational structure.

Step 3 - Decompose Critical Performance Areas

When initially defining Critical Performance Areas, an attempt should be made to keep them all at a high and consistent level (Level 1).

Once these high-level Critical Performance Areas have been defined, it is then possible to decompose them into successively lower levels of detail.

Decomposition is accomplished by reviewing each Critical Performance Area and determining whether the performance may be affected by any lower level activities.

If so, those lower level activities should be entered into the Critical Performance Area hierarchy as level 2 Critical Performance Areas, under the level 1 Critical Performance Areas they affect.

Once all level 2 Critical Performance Areas have been identified, if necessary they too can be decomposed further. It should rarely be necessary to go to level 3.

As with level 1 Critical Performance Areas, a brief narrative description for each lower level Critical Performance Area should be provided.

When carrying out Critical Requirements Analysis, some Critical Performance Areas may be identified that, although determining success or failure in meeting the Business Objectives, may be out of the direct control or influence of the project team. These should be noted for later analysis.

Step 4 – Define Performance Requirements

Having established the Business Objectives and Critical Performance Areas for the area under investigation, it is now necessary to determine the required performance.

First, establish the criteria by which success or failure will be gauged. These

Performance Criteria are determined by management, initially at Business

Objective level and then for each level 1 Critical Performance Area.

Performance Criteria may also be established for lower level Critical Performance Areas. This is at the discretion of the project team. The Performance Criteria are included in the Critical Performance Area hierarchy.

It may be necessary to define several Performance Criteria for Business Objectives in order that success or failure can be gauged adequately. The same is sometimes true of Critical Performance Areas. Performance Criteria for a Critical Performance Area may incorporate elements of the Performance Criteria for Business Objectives.

Performance Criteria may be expressed as financial measures (cost, profit, quality metrics, etc.), ratios, frequency or elapsed time, Customer satisfaction measures, etc.

Once Performance Criteria have been established for all Critical Performance Areas, the Critical Performance Area hierarchy should be reviewed in order to:

Validate that each lower level Critical Performance Area can have a significant impact on the Performance Criteria for its 'superior' Critical Performance Area
Ensure that no lower level Critical Performance Areas exist that may also have an impact on the Performance Criteria for a higher level Critical Performance Area.

Step 5 - Determine Performance Levels

Having established the means by which performance will be measured, it is necessary to determine the required level of performance for each of the Performance Criteria in the Critical Performance Area hierarchy.

Note: Management should establish standards for performance for internal Business Measures and guidelines for measures of Customer/Supplier Satisfaction.

Step 6 - Define Reporting Requirements

The last category of requirements to be defined is for the information that is needed in order to monitor and control the output of the project.

Performance Criteria are used to gauge the required levels of performance in critical areas.

Other reporting requirements may be identified through interviews with internal or customer management.

Reporting requirements should use company standard format and structure when available or reporting requirements defined by the customer.


.3 Review Critical Requirements Analysis


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 March 29, 2000
Copyright EXXCEL Contract Management Inc. 1998. All rights reserved.
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