The significance of traceability within a requirement tool or a test management tool (like HP Quality Center) enables links between requirements and tests. This notifies what needs to be changed when a requirement changes.
Requirements management tools also enable requirement coverage metrics to be calculated easily as traceability enables test cases to be mapped to requirement.
To Identify the apt version of test cases to be used.
To identify which test cases can be reused or need to be updated.
To assist the debugging process so that a defects found when executing tests can be tracked back to the corresponding version of requirement.