There are so many studies attempting to quantify the cost of software failures.  They don’t agree on percentages but they generally agree that the number is at least 50 to 80 billion dollar range annually. The main reason for such cost is the requirements problem, that is, requirements discovered in the beginning are different from requirements discovered towards the end of the project necessary to be successful. If adequate requirements are arrived before development, we could eliminate most, if not all, these failures.

25% – 40% of all spending on projects is wasted as a result of re-work (Carnegie Mellon). Gartner also reports “testing consumes 25% to 50% of the average application life cycle and often is viewed as adding no business value.” According to NIST, “80% of development costs involve identifying and correcting defects” through the entire product lifecycle.

All projects consist of productive and overhead activities.  Productive activities are value adding (i.e. requirements definition, data modeling, analysis, design, coding, and deployment).  Overhead activities are non-value adding (i.e. planning, progress monitoring, risk assessment, quality assurance, testing, rework, configuration management, training, and administration). The degree of software development waste is measured by O/P-ratio, the cost of overhead activity over productive activity cost.  The higher O/P-ratio the higher waste.  Given the fact of resource spent on rework and testing, it becomes obvious to see that the O/P ratio is easily 4 or much higher.   Every dollar spent on value adding activity, there are four or more dollars spent on non-value adding activity. If development begins with adequate requirements, the O/P ratio could be less than 1. This infers cost saving for each project at 50% or more.

If requirements were free of error from inception, the gross economic impact to software industry will be as much as scientific management to manufacturing. For software companies, it means hundreds of thousands of dollars saved in each and every project. For every organization, commercial, not for profit, and government, large or small, it means the vast savings in identifying the right projects, eliminating failure, reducing maintenance cost, and increasing productivity. In conclusion, UCSoft reduces your development cost by 25% or more.