The hidden ROI of the discovery phase in software development

The discovery phase is the due diligence of digital projects. It is the process of clarifying what needs to be built, why it matters, and how it can be executed within realistic constraints. And while some stakeholders see discovery as optional overhead, skipping it almost always costs more later.

Nearly three decades of the Standish Group’s CHAOS Reports have repeatedly confirmed a sobering truth: the majority of IT projects fail to deliver as promised – either they run late, exceed budgets, miss key features, or get cancelled altogether. In one of the foundational studies, only 16.2% of projects were completed on time, on budget, and with all intended features. A staggering 52.7% ended “challenged” (out-of-time, over-budget, or under-delivering), while 31.1% never made it to production.

Those statistics aren’t just numbers – they reflect systemic issues. The same report identifies critical root causes behind those failures: incomplete or unclear requirements, lack of user involvement, and insufficient executive support. 

Why does discovery matter here? Because it directly addresses all three of those failure drivers. A properly conducted discovery phase ensures:

• Requirements are clearly understood and validated, reducing the risk of misinterpretation.
• End-user needs are surfaced and prioritized, not assumed.
• Stakeholder alignment is achieved early, garnering the right sponsorship and support.
  

Put simply, skipping or skimping on discovery is like embarking on a cross-country trip without a map, compass, or agreement on the destination – you're almost guaranteed to veer off course.

For many executives, “discovery” sounds vague – more like a pause than a phase. In reality, discovery is a structured and time-boxed process with defined activities, outputs, and decision points. It is where assumptions get tested, risks surfaced, and priorities clarified.

Discovery produces decision-ready artifacts, not vague notes. Typical outputs include:

• Validated Problem Statement – A clear articulation of the challenge being solved, backed by stakeholder and user input.
  
• User Journeys & Personas – Evidence-based profiles and workflows that guide design and functionality decisions.
  
• Low-Fi / Mid-Fi Wireframes – Early sketches and clickable prototypes that visualize structure, layout, and user flow before heavy design or development.
  
• Preliminary Architecture Map – A high-level diagram of systems, integrations, and data flows showing how everything fits together.
  
• Project Roadmap & Budget Range – A realistic outline of phases, timelines, and cost estimates to guide decision-making.
  
• Risk Register – A documented list of potential issues with mitigation strategies to prevent delays and overruns.
  

Together, these deliverables form a blueprint for execution. They are what make subsequent design and development not just faster, but smarter.

On the surface, discovery can feel like a cost center. Weeks of workshops, research, and documentation before a single feature is built may seem like unnecessary overhead. But the economics tell a different story.

The Multiplier Effect of Late Fixes

Industry data consistently shows that fixing a requirements error in production costs 10–100 times more than addressing it during the planning stage. In practice, this means that an overlooked integration detail or misinterpreted user requirement can balloon into hundreds of thousands of dollars in unplanned expenses once development is underway. 

Hidden Costs of Skipping Discovery

• Scope Creep – Without clear priorities, new requests accumulate mid-project, stretching timelines and inflating budgets. 
• Rework – Features built on assumptions often require rebuilding once real user needs surface. 
• Integration Failures – Technical constraints emerge too late, forcing expensive re-architecture. 
• Delayed ROI – Projects ship later than expected, reducing the window of opportunity for value creation. 

The False Economy of “Starting Faster”

Leaders who bypass discovery often justify it as a way to accelerate delivery. Ironically, they end up slowing down: teams burn time on rework, deadlines slip, and costs mount. In contrast, projects that invest 4-6 weeks in discovery typically save months of wasted development effort and in many cases, avoid outright failure.

Technology projects rarely collapse because of bad code. More often, they stumble because leaders never agreed on what success meant in the first place. Marketing envisions a sleek experience, IT worries about integrations, finance pushes for cost control, and operations needs day-to-day usability. Left unresolved, these competing priorities turn into conflict once development is underway – when changes are expensive.

The discovery phase is where these tensions are surfaced and reconciled. Structured workshops bring stakeholders from different functions into the same conversation. By discussing objectives, constraints, and trade-offs early, the team can reach a shared definition of success before the first line of code is written.

This alignment has measurable benefits:

• Reduced churn mid-project – fewer change requests and less rework.
  
• Clearer governance – decisions flow faster when everyone knows the criteria for success.
  
• Stronger adoption – end users and sponsors are more likely to embrace a system they helped shape.

In this sense, discovery is not just a technical step, it is an organizational alignment tool. It transforms fragmented expectations into a cohesive roadmap that executives, managers, and developers can all commit to.

It is easy to mistake discovery for a technical exercise—a way to gather requirements, document integrations, and prepare developers. But the real power of discovery lies in its strategic function. It is the bridge between what an organization wants to achieve and what technology can realistically deliver.

During discovery, hard trade-offs are brought into focus. Leaders must distinguish between mission-critical outcomes and “nice-to-have” features. They must decide whether speed to market outweighs customization, or whether regulatory compliance demands certain architectural choices. These conversations don’t belong in late-stage development, where changing course is costly. They belong at the beginning, where strategy and feasibility intersect.

When done well, discovery creates more than a technical plan – it creates a business case for investment. Success metrics are defined, return on investment is modeled, and risk scenarios are mapped out. By the end of discovery, decision-makers don’t just know what will be built; they know why it matters and how it supports the organization’s broader objectives.

Discovery should not be seen as a one-time hurdle to clear before development. In dynamic organizations, it is a discipline worth returning to at key inflection points. Markets shift, regulations change, and user expectations evolve – what was true at project kickoff may no longer hold six months later.

Revisiting discovery pays dividends in situations such as:

• Expansions and New Features – Before extending a platform with new modules or integrations, a mini-discovery validates technical feasibility and user value.
  
• Strategic Pivots – When business goals change, such as shifting from B2C to B2B or expanding internationally, discovery realigns technology with strategy.
  
• Major System Integrations – Adding a CRM, payments provider, or data warehouse introduces risks that require renewed stakeholder alignment.
  
• Post-Launch Learnings – Analytics often reveal unexpected user behavior; a short discovery cycle helps translate those insights into roadmap adjustments.

In this sense, discovery is less a phase and more a repeatable framework for mitigating risk associated with change. Organizations that adopt a “continuous discovery” mindset, reassessing assumptions before each major step, are more resilient, faster to adapt, and better positioned to extract value from their technology investments.

Discovery is not one-size-fits-all. The level of depth required depends on the size, risk, and complexity of the project. A lean startup initiative needs a different approach than a multi-year digital transformation. One useful way to think about discovery is in tiers of depth and investment, each designed to mitigate specific risks.

• Essentials Discovery (≈20 hours)
  A focused engagement for small projects or MVPs. Activities include a kick-off workshop, a handful of stakeholder interviews, lean personas, a competitor snapshot, and basic user flows. The goal is to quickly validate assumptions, prioritize features, and avoid building the wrong “first version.” 
• Strategic Discovery (≈60 hours)
  A more substantial process for mid-sized initiatives such as website redesigns or moderately complex applications. In addition to the essentials, this level adds user research, detailed personas, competitive analysis, a design audit, information architecture, clickable prototypes, and a strategic roadmap. It mitigates risks like usability gaps, poor market fit, and unclear roadmaps. 
• Complete Discovery (160–250+ hours)
  Reserved for large-scale or high-stakes projects, this package includes extensive workshops, deep stakeholder alignment, comprehensive user research, content audits, full user journey mapping, high-fidelity prototypes, technical feasibility studies, and a multi-phase project blueprint. It is designed to prevent costly missteps in enterprise-grade initiatives where the consequences of failure are significant. 

The takeaway is not that one approach is “better” than another – it’s that discovery should scale to fit the project’s context. Whether a sprint of 20 hours or a months-long engagement, the common thread is proactive risk management, structured learning, and aligning business goals with user needs and technical feasibility.

In technology projects, the most expensive mistakes are rarely made in code ​​– they’re made in the assumptions that precede it. The discovery phase exists to expose those assumptions, validate them, and align teams around a plan that can actually deliver. Far from being an optional overhead, it is one of the smartest investments leaders can make to safeguard budgets, timelines, and long-term outcomes.

At Five Jars, we’ve built our approach to discovery on this principle. Our structured frameworks scale from lean, rapid validations to comprehensive multi-stakeholder engagements, ensuring that projects of any size begin with clarity, evidence, and alignment. Explore more about how we approach strategic discovery and project planning.

If your organization is preparing for a new initiative, now is the time to prioritize discovery. Contact us to begin your discovery phase with confidence.