Software project failure

Problems are a natural part of any project: maybe working across different time zones hinders smooth communication, or unforeseen tasks crop up and break your initial plan. Most of the time these things are manageable, but sometimes they’re significant enough to lead to project failure, costing you time, money, reputation, or even a business.

So how do you avoid such an outcome?

In this article, we’ll share some of the reasons why software projects fail and show you what you can do to minimize your risks. Let’s start by defining what we mean by software project failure.

When is a project considered a failure?

Software project fail

A project is considered a failure when you need to abandon it before release or take the resulting product or service off the market after release. The reasons for software project failure can range from simple things like a lack of resources to more serious management inefficiencies. Generally, they fall into one of the following categories:

  • Time. Project delays can significantly impact your relationships with stakeholders who are waiting for results and profits. Also, markets can change over time.

  • Cost. Every project will have unforeseen challenges, and sometimes these will need extra investment. If you’re unable to invest more, the only way out is to either cancel your project or suspend it and wait for better times.

  • Quality. You can put a product or service on the market, but what if it is of poor quality? Samsung’s legendary overheating phone batteries are a case in point: see below for a summary.

  • Use and market fit. If your solution doesn’t meet customer needs or they don’t know how to use it, they won’t pay for it.

Reasons for failure often build upon one another. For example, a lack of time and resources might force your team to take shortcuts, which can negatively affect quality. Or you might try to minimize costs at the discovery stage, which will result in a product with a poor market fit.

Software project failure examples

Software project failures

Going beyond the theory, failed software project case studies have plenty to teach us about what makes a project fail. Here are some big ones.

The National Health Service (NHS) IT system project failure

Rushing is a recipe for disaster, which is particularly true in ambitious projects with a great deal of responsibility. Take the UK’s National Programme for IT, which aimed to revolutionize the country’s patient health record system. The government underestimated the requirements, resulting in a rushed schedule they couldn’t meet from the outset. The fiasco cost taxpayers about £10 billion.

Exploding Samsung batteries

In 2016, Samsung experienced probably the worst crisis in its corporate history. In August, the company released the Samsung Galaxy Note 7, a highly anticipated new “big phone” which miserably failed: as early as September, users began sharing stories of overheating and exploding batteries on social media.

Samsung made the decision to discontinue the entire product line and recalled around 2.5 million phones.

Toyota vehicle malfunctions

Toyota’s infamous project failure came from an accelerator fault in its Lexus range. The cars were going faster without a driver pressing the gas pedal — all because of a system fault and improper memory handling. Within weeks, Toyota recalled millions of cars and had to pay a $32.4 million fine.

As you can see, budget overruns are not the only consequences of project failures. Enterprises risk losing their reputation and even endangering the lives of their users.

A survey of 3,234 project management practitioners revealed that 14% of projects failed. Let’s look in more detail at why a software project fails and what you can do to minimize the risks.

Top reasons why software projects fail and how to make them succeed

Software failure examples

Why does a software project fail? Here are some typical problems you may encounter during project implementation and ways to overcome them.

Problem #1: Unclear software project goals

Nearly 37% of projects fail because of unclear goals. If you don’t know what you want to achieve, it’s difficult to see when your project isn’t performing as you want it to.

Solution: Set measurable software project success criteria

Set clear and measurable software project objectives. For example, you might need a solution that will increase your conversion rate by 30%. Once all your KPIs are defined, you can develop a software development project plan based on them.

Problem #2: Unrealistic expectations

Dreaming big can never hurt, but your goals should always be in line with target user expectations. Beware too of giving in to stakeholder pressure and overestimating your ability to achieve certain things.

Unrealistic expectations can cause employees to rush tasks, make sloppy decisions, or take shortcuts. Consequently, the product will be inferior or simply useless.

Solution: Do your research and communicate

Validate your ideas first. You can run a focus group and judge how your target market will react to your idea before you start investing.

And of course, you should communicate, communicate, and communicate. Discussions with stakeholders, staff, and subject matter experts will help you come to a rational decision.

Problem #3: Vague software project scope

Fuzzy goals and overconfidence can also lead to a poorly defined software project plan, also known as project scope — a list of activities and resources needed to deliver a project.

Without a clearly defined scope, you won’t be able to develop adequate milestones, assemble an efficient team with the right expertise, and delegate tasks at the right time. It’s no wonder that poor planning is to blame for 39% of software project failures.

Apart from the lack of clear understanding of what goes after what and who does what, poorly defined project scope leads to incorrect software project cost, time, and resource estimation. Let’s give each of the problems a closer look.

Why software project fail

  • Incorrect software project cost estimation. Incorrect cost projections can seriously affect the quality of your deliverables since you have limited resources. Or, as we said earlier, you may end up having to pause a project indefinitely because you don’t have the budget.

  • Incorrect time estimation. Project delays can result from incorrect software cost estimation, sliding milestones, significant changes in scope, gaps in team collaboration, or insufficient resources. All these things slow down your time to market, leading to lost customers and dissatisfied stakeholders.

  • Unforeseen resource gaps. Resource allocation isn’t easy. But it’s easy to overlook unexpected problems such as several employees getting sick at the same time or an outdated system failing to function.

Solution: Plan everything in advance

“Plan in advance” is obvious advice, but not always easy in practice. Here are some tips for creating a manageable project scope:

  • Plan out resources, timelines, and costs. First, make a list of talent, software tools, and hardware resources needed to deliver the project. Then plan milestones, break them down into tasks, and assign a corresponding team member and other resources to each of the milestones. This gives you an overall schedule that you can use to calculate the project cost.

  • Use a project management tool. Project management tools help accurately estimate task timelines, use project resources more effectively, and even improve cost estimation. You can streamline repetitive processes, get an overview of task dependencies, track project metrics, and more.

  • Hire a dedicated team if you don’t have the needed expertise in-house. A reliable partner will have a wealth of experience to leverage and share. Whether they use bottom-up software project estimation or reverse analysis, they’ll advise you on the best approach to take.

Problem #4: Incorrectly compiled software project documentation

Documentation is essential to software project planning. It enhances project efficiency by summarizing all the prerequisites for software project scope, such as software requirements specification documents and user manuals. Without proper software project documentation, it’s difficult to determine what your service does and doesn’t cover and align your team’s work with the client’s expectations. In addition, high-quality project documentation ensures team commitment to the deliverables.

Solution: Centralize and automate

Use a central repository and document management software for comprehensive project documentation management. This is much better than having documents scattered across Excel spreadsheets, email chains, and chat messages.

What’s more, as the project progresses, there will be numerous adjustments, and here you can’t do without automation tools. It makes managing document version history real-time and thus flawless. Here you can consider using document management software that allows you to seamlessly import, store, share, export, and secure any type of document. This will keep your team and all stakeholders informed and connected.

Software project fail

Problem #5: Poor software project team communication

A lack of communication, especially in critical situations, can turn an already complex project into an even more complex one and lead to disappointing results.

Solution: Combine the right culture with the right tech

Successful software project examples demonstrate that good teams complement each other’s knowledge and work together to solve problems. A software development project management approach that fosters transparency and collaboration will help you ensure smooth teamwork.

Make sure that every team member sees the big picture and is aware of their responsibilities and how they contribute to the project. This will keep them inspired and engaged. Active listening shouldn’t go unmentioned either, since people love to be heard. Finally, set up the right tools for online communication, video conferencing, project management, and file-sharing.

If you’re just starting out with PM and need some support, you can always entrust your project to a web development partner with a well-established and transparent workflow. We’ll explain how to choose one later in this article.

Software project failures

Problem #6: Unforeseen risks

Overlooked risks can slow down project implementation, lead to cost overrun, or otherwise jeopardize a project’s success. Undefined opportunities and risks cause 27% of projects to fail. Of course, you can’t predict the future, but it’s better to be safe than sorry.

Solution: Be proactive

Risk management helps you identify potential problems before they arise and take advantage of possible opportunities. Here’s what good risk management looks like:

  • Brainstorm all potential risks at the outset.
  • Communicate these risks to a client or stakeholder to avoid overwhelming them later.
  • Evaluate each risk in terms of its nature, its impact on your project, and its likelihood of occurrence.
  • Prioritize the risks.
  • Determine what can be done to reduce the likelihood of each risk.
  • Develop preventive measures.
  • Decide what you’ll do once a risk has occurred.

Software failure examples

Don’t let risks catch you off guard because they can turn into a disaster in a very short time. Remember the Toyota case again. This is definitely not what your customers expect from you.

How to achieve software project success

Why software projects fail

On the road to success, forewarned is forearmed. It makes sense to look at all the potential problems you might face during the software development lifecycle and anticipate the risks.

Everyone on your software project team needs to have a clear idea of the software project goals. Based on this, you can develop a realistic project scope, stick to the timeline and budget, and allocate resources properly. Also, don’t forget the importance of collaboration, both internally and with stakeholders.

And, of course, consider partnering with an experienced software development company. With our firm focus on achieving results, you can be sure you’re making the right choice to ensure project success.

How to choose a software development agency

Why software project fail

There are different criteria for selecting outsourcing partners: cooperation and pricing models, corporate culture, industry knowledge, and tech stacks are just a few examples. Here are some good pointers to get you started:

  • Check the company’s eagerness to understand your business needs. Your partners should understand your business requirements, as this is a guarantee for accurate estimates. They should also clearly articulate what requirements they’re ready to meet and how.

  • Ask your candidates about which software development methodology they would use in your case. Agile techniques like Scrum and Kanban are high on the list for developers because they fit almost any project. But every project is different. Kanban, for example, is better for continuous delivery. Scrum, with its sprint nature, is good for speeding up time to market.

  • Look at the communication service. What tools will a company use to inform you of updates? How often will they contact you? You should always have a complete overview of all changes. A reliable partner will always keep you informed and be honest about potential challenges, and won’t over-promise.

With these tips in mind, you’ll be better placed to find the best partner and impress the market with your product or service.

Partnership with Acropolium

Why do software projects fail

Acropolium offers a wide range of bespoke software development services, including IT consulting and custom app development. We have years of experience working with various clients, projects, and technologies to develop complex solutions for logistics, healthcare, fintech, hospitality, retail, and more.

Our expertise is verified by our ISO 9001 compliance and 4.9- and 5-star reviews on Clutch and GoodFirms respectively.

Final thoughts

It would be a much easier world if everything always went according to plan. Unfortunately, as every project manager knows, the reality is much different, and problems are bound to arise.

We hope this article has helped you evaluate the risks of project failure and suggested actions to improve your software development project management workflow. If you’re looking for the support of an experienced software development partner, we’re right here.

Contact us to learn more about the benefits of our subscription-based offering and discuss the details of your project!

Sources of information