8.4.2 Error Cost Escalation Through the Project Life Cycle

Abstract

AbstractAs systems become more complex, the costs to identify and correct requirements errors can consume large portions of project budgets. In general, there are two categories of cost associated with errors – cost of identification and cost of correction. This paper addresses an important element of the second category – the behavior of the cost of error correction as a project progresses. It is based on a study that used three approaches to determine the relative costs: the bottom‐up cost method, the total cost breakdown method, and the top‐down hypothetical project method. The approaches and results described in this paper presume development of a hardware/software system having project characteristics similar to those used in the development of a large, complex spacecraft, a military aircraft, or a small communications satellite. The results of the study show clearly that cost‐to‐fix escalates exponentially as the project progresses. If the cost of fixing a requirements error discovered during the requirements phase is defined to be 1 unit, the cost to fix that error if found during the design phase increases to 3–8 units; at the manufacturing/build phase, the cost to fix the error is 7–16 units; at the integration and test phase, the cost to fix the error becomes 21–78 units; and at the operations phase, the cost to fix the requirements error ranged from 29 units to more than 1500 units.