I would like to know what kind of tool you use for writing your specifications. I think it's essential to use a tool that supports some kind of plain text format so that one can control the specification with a source control system like SVN. For the specification as for the code as well, it's important to have a history of all changes.
At present we write our specification in a XML format. TeX would also be an alternative, but it's hard for people who have never been working with it.
So let me know, what kind of tools or formats you use for specifications.
DocBook edited with XXE, translated to pdf with xslt when needed to be sent to clients.
Best change ever, so much easier to write, so much easier to merge, and when it's converted it doesn't look so godawfully unprofessional as MSWord.
Plus the structured document style is already there, unlike bloody word which you have to fight with to get working.
We used TeX (MikTeX) and it was perfect because:
The only problem was to get diagrams (from ArgoUML) in.
At another project I saw using Word templates - awful stuff directed from above.
I'd consider using something like wiki/forum on intranet. Imagine using GoogleDocs - there is versioning, it's online.. but not applicable for commercial development.
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