Listed here are WaterFall Model examples and industry-specific financial model templates which utilize the WaterFall Method.

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What is a WaterFall Model – WaterFall Modeling

A WaterFall Model is usually one of the methods used to model the Software Development Life Cycle (SDLC). It can also be used to model other business models which require a sequential method such as in areas of engineering design. WaterFall Modeling used to be for modeling manufacturing and construction industries since both are highly structured physical environments, thus, it can get really expensive in the development process. Therefore, with the technology nowadays, it is possible to adopt the use of software to conduct the designing and calculating for the needed expenses.

WaterFall Modeling can be rather a straightforward process due to its step-by-step nature. Though one can realize that there are minor differences due to the numbers and descriptions involved in the method depending on the developer. Still, it doesn’t change the fact that the concept is the same and encompass a broad scope of an idea to developing a finished and full-scale, live application.


Sequential Phases in a WaterFall Model

The WaterFall Method is divided into separate phases where each phase’s outcome becomes the input for the next phase sequentially. This means any phase in the development process can only start if the previous process is completed. Thus, the term “waterfall” is used due to its nature which processes flows steadily downwards through sequential phases of Conception, Initiation, Analysis, Design, Construction, Testing, Production or Implementation, and Maintenance.

  • Requirements: The most important phase is the first phase which involves the understanding of what needs to be designed and what is its corresponding function or purpose. This means the conception and the initiation of the idea, which are then analyzed to determine its feasibility. In this phase, the specifications of the input and output or the final product are studied and marked for the next phase to use.

  • System Design: After gathering the requirements needed for the project, the data from the first phase are then studied in the next phase where a system design is prepared. The System Design helps in determining the hardware and the system requirements to help in defining the overall system architecture. After this phase, a software code is written for the next stage to use.

  • Implementation: Using the outcome of the previous phase, it will be used as inputs for the implementation. First off, the system is developed in small programs called units, which are then integrated into the next phase. Each unit is developed and tested for its functionality which is referred to as Unit Testing.

  • Integration and Testing: Once all the units developed in the implementation phase are integrated into a system after testing of each unit, the software designed, needs to go through a constant software testing to find out if there are any flaw or errors in the design. This task is done to ensure that the client won’t face any problems during the installation of the software. Unless this phase isn’t fulfilled, you can’t proceed to the next phase which is to deploy the system to the client.

  • Deployment of System: Once the functional and non-functional testing for errors in the system is done, the product is then deployed in the customer environment or released into the market.

  • Maintenance: The final step is only applicable after the installation of the product. This phase involves making modifications to the system or an individual component to alter the attributes or to improve the performance of the system. These modifications often arise either due to the change of requests initiated by the customer, or certain defects which are only uncovered during live use of the system. Usually, the Client is provided with regular maintenance and support for the developed software to ensure reliability and a lasting relationship.

Each phase is cascaded to each other in which process is like a waterfall. The next phase can only be started after the defined set of goals are achieved for the previous phase, hence, the name “Waterfall Model“.


Advantages and Disadvantages of a WaterFall Model

While the WaterFall Model is not so commonly used in recent years, it can still provide a number of advantages, especially for larger projects and organizations that need stringent stages and deadlines.


  • Can easily adapt to Shifting Teams – It allows the project as a whole to maintain a more detailed, robust scope, and design structure due to all the upfront planning and documentation stages. Though this advantage is also apparent to other approaches, the waterfall model is well suited for larger teams that have members come and go throughout the life cycle of the project. Thus, there won’t be any trouble of shouldering too much burden on the design since it is placed on the core documentation and not on any individual team member.

  • Forces a Structured Organization – Enforcing something might sound bad, but for a project that requires a strict organization and deadline, then it is a great benefit to have. It is best to have a strict discipline in the overall design and structure to ensure the best result in an organized way.

  • Allows for Early Design Changes – It allows changes or any kind of alterations in the early stages of the design as long as it hasn’t been implemented yet. Otherwise, it will tend to be more difficult in the later stages. Still, the waterfall approach lends itself well to any changes in the early stages of its life cycle.

  • Best Suited for Milestone-Focused Development – Since the waterfall model encourages proper organization and strict discipline, it is best suited for milestone-focused development projects. This is due to the straightforward method of the waterfall model that made it fitting for those who are after clear, concrete, and well-understood stages that the team can understand and prepare for. Hence, the entire process can be done a lot more efficiently and faster which is befitting for projects with deadlines.


  • Nonadaptive Design Constraints – Compared to other approaches, the one thing that a waterflow model couldn’t cope is its inherent lack of adaptability across all stages of the development lifecycle. As mentioned above, it is only best to do any alterations in the early stages but if there are changes in the later stages then one can only do a big dramatic leap which will turn all the efforts of the process before that to null. That’s why when using the waterfall model, one should ensure that the early stages are final before implementing it and proceeding with the next stages, otherwise, the project life cycle will be extended which is not good for projects with a deadline.

  • Ignores Mid-Process User/Client Feedback – As you already know, a waterfall model enforces a strict step-by-step process which can be a big trouble between clients or users’ feedbacks. Especially in the later stages, some clients will have issues and want to add changes but this is detrimental to the process for the development team and extend time to redo the designing and other stages again. This is often time-consuming and also really costly; hence, this is one of the biggest issues for a waterfall model.

  • Delayed Testing Period – The testing period is one of the most critical parts of the development lifecycle of a project and yet, in the waterfall method, it is only done at the later stages which can be a big problem especially when there are bugs or design issues. This means that you will have to go back and redo some processes again to fix the issue, hence, another aspect that will cost and extend more time period to work on the project.

Just like any approaches, the waterfall model has its own advantages and disadvantages. Still, waterfall modeling can be very useful depending on one’s need, especially for teams or organizations that encourage a well-structured model.

Are you looking for WaterFall Model Examples that you can use for your project? If you are, then you can check out our list of financial model templates that uses WaterFall Modeling above and use it as a base to start your very own WaterFall Model. These waterfall model examples are ready-made by financial modeling experts with a substantial amount of industry know-how and experience.