Requirements errors are costly, costing billions per year and resulting in failed or abandoned projects. As Tom King and Joe Marasco explain in this post, It execs and business stakeholders alike need to understand the cost of requirement errors in order to fully see why it’s an important factor in success: If you are a business executive, IT manager, project manager, or business analyst, you need a way to calculate the cost of requirements errors. Once you know that cost, you can make controlling faulty requirements an appropriate priority. You can calculate your cost of a requirement error based on the simple formula presented in this article. The formula is based on extensive practical experience, as well as data from a wide variety of industries and software development environments. King and Marasco then go on to explain the process of determining cost for requirements errors: estimate the size of the project, estimate the number of defects to expect at system test, estimate the number of requirements defects, estimate rework costs, estimate rework costs due to requirements errors, and then divide the cost of requirements rework by the number of requirements defects.