Requirements

I recently had to return an item that I’d bought online. It’s free to return the item in-person to one of their retail locations, or $10 to ship it back. There was a store nearby so I elected to do an in-person return but the experience shows what can happen when software and processes are developed without involving the user.

The store clerk was friendly and helpful. He asked for my online order number, found it in the system, and told me that the money would be refunded to the original form of payment used for the purchase - in this case, PayPal. Everything is going smoothly to this point.

Consider the following statement:

Our consultancy operates on a 50% margin.

Margin is how much extra the consultancy charges on top of their costs to cover the consultancy’s costs, operating expenses, and profits. Most consultancies have a minimum margin that they’ll consider acceptable when bidding on work.

But the details matter when it comes to requirements. A lot. The statement above is subtly ambiguous. How is margin calculated, precisely? I can think of two ways which make sense but result in wildly different profits for the consultancy.