Project Requirements: What Are They & How To Break Them Down

How much thought and time do you put into gathering and analyzing project requirements? And have you ever looked back at failed projects to see when and where you went wrong? Was it all a matter of having the wrong deliverables to start with?

According to Infotech, 70% of projects fail due to poor requirements. If spotted early (in the requirement gathering stage), they are problems that cost $1 to fix. Peanuts. But if left unnoticed until the testing phase, they can blow out to a cost of between $10-100, per error! Yep – take that dollar, and multiply it by ten to a hundred. Suddenly we’re not talking about peanuts anymore.

Now if you want to avoid this costly mistake, you need to understand what quality project requirements look like, how they are compiled and why they need to be turned into a project Requirements Breakdown Structure.

What Are Project Requirements?

Project requirements are all the items you must deliver in order for your project to be considered a success. They could be broad objectives or goals of a campaign or initiative, but they could also be capabilities and features a product needs to meet.

This means they can be either:

1. Functional requirements – Which include all the things or tasks that a tool, app or system needs to be able to do or deliver. For example, a functional requirement of a client management tool might be to turn an estimate into an invoice.
2. Non-functional – Which are focused on qualitative aspects of a project or product. For example, a non-functional requirement of a client management tool could be to have a user-friendly interface.

As much as project requirements guide what needs to be done, they also play a vital role in informing the team and stakeholders what is not included in the project.

Why Are Project Requirements Important?

Project requirements are important because they inform and guide the motivation and direction of your entire project. They are one of the first things a project manager will work to develop. Why? Because you need them to create all the other must-have project documents for the project initiation and project planning phases.

For project requirements to serve their purpose, they need to be concise and clear.

But this is easier said than done. It can be hard to define and land on the right set of requirements. It might take lots of back-and-forth between stakeholders, product owners, sponsors and customer-facing teams. However, once you finalize the list, your project requirements will serve multiple critical project purposes.

They will:

• Explain the project’s rationale and the exact what, why, and how of your objectives
• Set project expectations and parameters for deliverables
• Remove confusion and align the entire project team to focus on one set of must deliverables
• Guide and determine key project elements such as scope, resources, budget, and timelines
• Help project managers track and monitor progress to final delivery

So the right project requirements help your entire team meet the needs of your clients and stakeholders. But they should also ensure you complete the project on time, in scope, and within budget.

On the other hand, poor requirements are deliverables that don’t align with a project’s objective or purpose and therefore, don’t deliver results.

3 Types Of Project Requirements

There are three core types of project requirements that work to deliver a unified solution that addresses business, stakeholder and customer needs.

Business

Business requirements are the conditions and objectives the business or organization wants to address and achieve. These are needs that align to the business’s overall strategic focus. They act as a high-level project roadmap for the more specific functional requirements that will become your tangible deliverables.

Some examples of business requirements include:

• Develop an organic SEO content marketing strategy to educate and attract new customers
• Decrease customer churn by 10% in the next year
• Streamline and simplify the customer onboarding process to improve the new customer experience

Stakeholder

Stakeholder requirements include the needs of all the people involved in determining the project’s development, or those who will be affected by the end solution. This list can include project sponsors, business leaders and regulatory bodies or representatives.

Some examples of stakeholder requirements include:

• Make sure the new website is GDPR-compliant
• Hire writers that have a minimum of five years experience in creating SaaS content
• Deliver at least three new features before the end of the year

Solution/Customer

Solution or customer requirements are all the functional aspects, and customer or user needs a product or campaign is supposed to deliver. Unlike business requirements which tend to be qualitative and quantitative objectives, solution or customer requirements are tangible behaviors or actions a product needs to be able to perform.

Some examples of solution or customer requirements include:

• Customers can sign up for the trial without providing credit card details
• Add unlimited external users to the workflow management tool with only their email address
• Allow users to translate messages and discussions into one of 50 languages

How To Identify & Break Down Project Requirements

Now that you understand the different types of project requirements, it’s time to take a look at the step-by-step process that will first help you identify them, and then break them down into a useful reference document: a project requirements breakdown structure.

Step 1: Gather Stakeholders & Requirement Suggestions

Your first step is to round up all the stakeholders that matter. These are all the people with direct, and indirect insights that will help you form the foundations of your project roadmap and deliverables (requirements).

Once you’ve got the group together, you can start collecting requirements and the context behind their importance.

• Gather stakeholders – You’ll have a basic list of stakeholders you know need to be involved in these conversations. These might include project sponsors, product owners or account managers, and customer or client-facing teams or leads. The most important thing here is to include your project topic experts, and to not forget the people who have the most intimate connections and conversations with the people who will be affected by your deliverables. To broaden your list of stakeholders, ask around and get advice from project managers who’ve run similar initiatives within the same department.
• Collect suggestions – Once you have all the people together it’s time to start collecting suggestions. These need to be targeted and aligned to the project objective that has been defined in the core project charter, which is the first document that needs to be developed. It belongs to the project initiation phase of a project lifecycle.
• Get the context – For each suggestion you collect, it’s vital you get the context and rationale which makes it worth including in your list of final project requirements. This context will help you in the next step when the time comes to analyze and sift through and prioritize all the items you’ve gathered.

How you choose to gather your stakeholders and collect requirement suggestions is up to you. You might decide to send out a request for requirement suggestions to be logged directly into a shared document, or you might hold a brainstorming meeting to go over the project objective and have a preliminary discussion. Whichever way you choose to go, you will need to have some form of centralized digital document where you collect requirement suggestions and their context.

Collaboration tools like ActiveCollab are ideal for these types of team initiative, especially if you have people working remotely and across timezones. You can simply create a project requirements task, invite all your stakeholders to join the task, and hold an online discussion where everyone can share their ideas within the task or log them into a document link.

Step 2: Analyze, Define & Categorize

The next step is to go through all the requirement suggestions and evaluate their relevancy and priority. Then, and only then can you define those requirements in a way that will make them valuable, and useful points of reference for tracking your project to success.

• Analyze suggestions – You need to go through each requirement one by one and analyze them from various contexts which include: user or solution needs or business environment and strategic focus. Now in this part, it’s important to stay optimistic and innovative within the constraints of reality. There’s no use including a requirement that cannot be accomplished with the resources, and timelines you have at your disposal. However, if it is something that would be highly valuable to the business and customer, it might be something you keep in mind for future iterations and updates.
• Define requirements – The suggested requirements that pass your analysis stage, need to be defined clearly. This means developing detailed descriptions of what each requirement is focused on achieving. Where possible, include metrics or concise outlines which say exactly what the end result will achieve. For example, instead of saying something like: decrease customer churn rate or speed up trial registration process, you should say something like: decrease customer churn rate by 15% in the next 12 months, or speed up trial registration process by removing the need to register with credit card. Can you see how the latter two make it easier for a project team member who will work on those deliverables to identify what they’ll need to work towards? The first two versions are too ambiguous and broad and would be hard to monitor and evaluate in the end.
• Categorize & prioritize the selection – When you have your list of clearly defined requirements, you’ll need to categorize and prioritize. First you need to divide and categorize them into business, stakeholder, and solution/customer requirements. Then, you’ll need to prioritize them in order of importance and value. To do this, you can use one of several prioritization techniques like the MoSCoW method or the Eisenhower Decision Matrix. This step will help you work out the core deliverables that will deliver the greatest impact. Aim to focus on a three-level priority structure where you label each requirement as either high, medium or low.

Step 3: Create A Requirements Breakdown Structure (RBS)

The last step is to create a requirement breakdown structure which organizes and breaks down requirements into sub tasks for easier management and tracking of each item. This is especially important for large or complex projects with long lists of requirements.

• Identify the core deliverables – From your list of categorized and prioritized requirements, you’ll notice you have some core or larger deliverables. These will need to be broken down into sub-parts. In a document, spreadsheet or project management tool, enter your core deliverable and then break it down into its sub-parts. Many of these might be dependent tasks which mean one needs to be completed before another can start. Make sure you order them correctly. You can do this in ActiveCollab’s Gantt chart view, which lets you link, see and track dependent tasks quickly and easily.
• Allocate smaller tasks – You might also notice you have smaller requirements in your master list that feed into some of the core deliverables you’ve already identified. Place them where they belong so you end up with a clear, hierarchical breakdown of all the requirements you have identified in your final master list.
• Get final validation – Once you’ve got your Requirements Breakdown Structure (RBS) set up, send it off to all your key stakeholders for final feedback, validation and approval. It’s important you don’t miss this step because it gives you an opportunity to be 100% sure the work you’ll be focusing on is exactly aligned to the project’s purpose and goal.

Benefits Of Having A Requirements Breakdown Structure

Joint Goal Clarity

You know that old saying, It takes a village to raise a child? Well, the same analogy can be applied to projects. If you want to set your project on the right path, and help it turnout a success, it will take an entire team. But, you also need to make sure that everyone in that team is on the same page, working towards the same goal.

Taking the time to develop and create a Requirements Breakdown Structure (RBS) helps you unite everyone in the project team around the same purpose.

It also helps you understand how different departments interact and depend on each other. You’ll also identify how improving one process, may lead to improvements in another area so you can multiply the positive impact you create as a result of working together, in a combined and collaborative effort. A united front drives and motivates project teams to push through even in difficult stages of the project.

Structured & Ordered Approach

Establishing the what and why of a project is one thing, but knowing how to achieve those things is another. While a Requirements Breakdown Structure is not as comprehensive as a Work Breakdown Structure, it does give the entire project team a framework which creates a sense of order and precise direction.

Laying out a clearly defined requirements structure helps you stay in line with the project’s primary purpose and scope, and it keeps you on course even when unexpected challenges pop up.

When you divide requirements into all their sub-parts, it’s much easier to organize your teams, assign tasks, allocate timelines and track their progress. It also helps you come up with contingency plans if one task is brought to a halt.

Increase Project Success

When you take a closer look at all the elements, stages and documents that go into project management, you understand there’s a method to all the madness (so to speak). And that method lies in creating a sense of logic, order and transparency. When you set firm foundations in the initiation phase of a project with the right requirements, the chances of success in every next phase increases considerably.

A good portion of establishing your project requirements structure will also depend on connecting solutions to key pain points, which ultimately, if met, will lead to overall project success.

Vague requirements or ones that don’t center around your project's purpose will drive an entire project in the wrong direction. This will result in one of many common project delays. You may be pushed to go back and rework project plans, reallocate resources, implement change management plans, and manage unhappy stakeholders who will be looking for explanations and accountability. All this might result in budget blowouts, damaged relationships, and unhappy clients. All the things a project manager wants to avoid at all costs.

Use ActiveCollab To Gather and Manage Project Requirements

If you want to minimize halts and set foundations that don’t fall flat on their face half-way through the project, you’ll put the effort into creating a precise and clear project Requirements Breakdown Structure.

ActiveCollab is more than a project management tool. It’s a home base for all your project and innovation workflows. Create a project, invite your team members and stakeholders, and get ideas flowing. Hold virtual discussions, get feedback, and refine those ideas to come up with a list of project requirements that are worth pursuing. Ones that will justify the time and money invested because they’ll deliver the impact you’re after.

And once you’ve landed a master list of all your business, stakeholder and solution requirements, you can move onto the project planning and implementation phases. Create Gantt chart project schedules and timelines, assign tasks, set budgets and monitor the progress of each deliverable. Keep tabs on your project team's capacity with time tracking features, and manage resources throughout the entire project journey.

We’re a project management tool that’s evolved into productivity and workflow management software for client-facing businesses and startups. Created with professional service businesses in mind and product or software developers, ActiveCollab helps small and medium teams scale with ease.