Every project fails for different reasons either due to poor management or lack of scope and every year companies globally face challenges that become the cause of their project failure. Which as a result leads to companies hiring consultants for assessing the reasons and in the process ignoring the actual reason that might have caused the project to fail in the first place. Besides, 1 in 6 IT projects have a cost overrun of 200%, the real question is why? 

Having said that, there is no one way through which companies can manage their structure, teams, and projects for the ultimate success. Since every company is different from the other in terms of how they handle their projects or which project management methodologies they use to manage resources. Some are decentralized and some not so much. Regardless of the company’s structure, organizations need a proper set of practices that can save projects from falling behind or failing. 

Necessary Project Management Functions

  • Hire technical and non-technical resources
  • Manage resources and allocation effectively
  • Have a project manager for overseeing processes
  • Clearly define standards and hierarchy to achieve project success
  • Keep major stakeholder in the loop
  • Constant flow of communication and collaboration
  • Automate project management processes
  • Outsource project management services for maximum results 

Project failure is not only limited to a certain category of companies, but the matter of fact is, it can happen to anyone and anytime. There are a limitless number of reasons associated with failure. Sometimes projects get out of control and sometimes the team and if not controlled on time can lead to irreversible damages and losses. Failed projects are not only bad for the company but the team as well. It can impact the morale, productivity, and motivation of your team members. According to studies, organizations lose $109 million for every $1 billion invested in projects and programs.

Most Common Reasons Why Project Fails

Below are 6 important reasons why projects fail. So let’s dig in:

  • Unclear Project Scope
  • Lack of Resource Planning
  • Poor Project Handling
  • Hiring Unqualified Team
  • Poor Communication
  • Lack of Technology

Unclear Project Scope

Projects can not start without defined project scope: where you are now and where you want to go? Project scope helps you map out your journey and budget that you’d be needing to see your project to fruition. The scope is more about planning your project from start till final implementation and provides a direction. Because lack of direction is one of the biggest reasons why projects fail. 

According to a report by PMI Pulse of the Professional an estimated 37% of projects businesses undertake fail due to unclear project objectives and milestones. Companies that fail to define the scope of their project not only waste time but also their employee's efforts. Whereas by defining clear goals and objectives you not only create a stable working environment but also lead your project towards success.  

Lack of Resource Planning

Lack of resource planning is also one of the most common reasons for project failure. You simply can not expect to execute your project without a team. Am I right? If you need resources, hire them, but obviously, keep the budget in view. Mostly HR and the senior management are responsible for making sure that the project managers have enough resources to complete the project on time. 

Moreover, poor resource planning can lead to over-allocation of resources as well such as too many resources working on few projects and few resources working on too many projects. Even though resource shuffling lets employees experience different projects to broaden their horizons and skillset but when not managed properly can be a hassle. 

Poor Project Handling

This wastes time! Time which employees can spend on other useful and productive project tasks in completing the milestones. Projects come with challenges and challenges are inevitable but poor management can lead to your downfall. Therefore, your project managers and other resources should have sufficient knowledge to find their way through risks and challenges. 

Moreover, time management is of utmost importance. Meeting deadlines shows your capability and integrity. You should have a schedule to follow or else your team would be all over the place. No deadlines meaning the project may not complete on time, which leaves a negative impact on resources and overall company revenue. 

Hiring Unqualified Team

Hiring unqualified resources is one of the poorest decisions that companies can make. Successful companies know about the significance of hiring just the right employees. Finding the right candidates in the first recruitment round can save you billions. Whereas hiring unqualified resources is a suicide. 

To attract and eventually hire a potential candidate takes time, effort, and money because the process involves selecting candidates, scheduling interviews, conducting interviews, etc. Besides, salary depends on the level of the post. If you hire for a senior position making a wrong decision can do more harm. Therefore, it’s important to go through a thorough vetting process from the very beginning to prevent issues in the future. 

Poor Communication

Good and strong communication is one of the most important components of project management among other things and similarly, poor communication is the biggest impediment to project success. Many companies may just depend on written forms of communication with their project teams but written communication such as email can be challenging, even though it can always come in handy. Challenging because they can add up to different contexts than anticipated and even lead to misunderstandings. Therefore, having daily standup meetings either physically or virtually if you are working with remote teams, is suggested to make sure that everyone is on the same page, better loop in the major stakeholders as well. 

Companies should invest in communication technology such as Zoom or Slack so that everyone can communicate with one another seamlessly and without any disruptions. The tool should be accessible to everyone. Communication tools like these also enhance project transparency.

Lack of Technology

There would be no exaggeration to say that technology is becoming an important part of not only our lives but also our business operations. Businesses are seemingly automating their tasks to catch up with digitization. The reason why we can find many project management software to manage internal communication and tasks for smooth progression of the project. 

According to studies, 71 percent of organizations use project management software to improve the management and control of projects and programs. Project management tools such as Asana, Trello, Monday.com, etc provide many benefits to project teams including designers and developers such as collaboration tools, resource planning, task scheduling et al. Project management tools can eliminate the possibility of failure since everything and everyone is transparent and accounted for.

Why Projects Succeed?

Given below are some of the reasons that make projects successful:

  • Hiring experienced and dedicated project managers
  • Maintaining communication effectively and efficiently
  • Setting SMART goals: measurable and attainable
  • Proper resources and budget allocation/planning
  • Having a risk management strategy in place
  • Successful hiring of skilled employees
  • Project management tools for visibility of all projects and people involved
  • Equal interest of all the stakeholders and team working on the project
  • Clearly defined responsibilities and requirements free of any confusion
  • Prioritizing requirements based on importance 
  • Not overlooking warning signs 

Edward Kring
Digital Marketing Expert
Edward Kring is a digital marketing expert working in one of the reputed fintech software development company. He has helped several brands grow from nothing to a successful name in the past few years. He believes smart work and business values go a long way when it comes to success.

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6 Most Common Reasons Why Software Projects Fail