For our clients:
36 Reasons Why Top IT Projects Fail.
9 months back, I was part of a discussion started by Ron Sheldrick on LinkedIn about the topic — Failure of top IT projects. To this date the discussion is extremely active with many experts leaving their valuable inputs. Inspired by this discussion, I want to outline some of the top reasons projects fail. But before that, let’s have a quick look at the stats related to the success rate of large projects.
Gartner report –
Project size <= $350k: Success rate => 80%
Project size <= $1M: Success rate => 75%
Project size > $1M: Success rate => 72%
Standish Group Chaos Report –
Project size <= $750k: Success rate => 75%
Project size >= $1.9M: Success rate <= 40%
Project size >= $10M: Success rate <= 5%
Sauer Study –
Project size <= $360k: Success rate => 75%
Project size >= $11M: Success rate <= 50%
Project size >= $25M: Success rate <= 25%
Project size >= $36M: Success rate < 5%
Now let’s jump into the reasons top IT Projects fail:
- No defined processes for small, medium, and large projects. The process must include necessary minimal steps to get from concept to implemented business functionality. However, if you do not enforce your process properly, it’s the equivalent of not having a process.
- Having no real time status enabled by integrated project management. As technicians complete tasks, the updated project status should be immediately visible to stakeholders, CIOs, project managers, etc. based upon the different roles in the project.
- A recurring reason is a mismatch between customer expectations and the delivery capabilities of the technology organization. Properly setting and managing customer expectations is a key criterion to success.
- Lack of business engagement — You can code to perfection, create the perfect new app or seamlessly migrate data, but if the business is not engaged to direct/support the project, conduct UAT, provide feedback, etc. the project will not be successful. It’s important for IT Project managers to challenge those outside of IT and ensure they direct the business project team members aggressively.
- Not figuring out what success looks like for the customer. They don’t measure success in the correct way and most basically don’t know what the users are trying to achieve with this project.
- Lack of a shared visioning process. A process that includes educating the business on what is critically important in the application of their systems and technologies. This learning engagement can then lead to improved requirements gathering, which will steer a project to its successful execution.
- IT project resources not proficient for their roles, lack of knowledge and experience.
- Ego of the sponsor — Sponsors often tend to do everything to avoid a failure. Higher the ego, the more difficult it becomes.
- Inadequate user communications and management leading to uncontrolled project creep, particularly in policy based organisations.
- Lack of planning and foresight regarding both economical and technical feasibilities.
- The focus on new tools/software vs. what can the organization do to fix the business issue with the current people, process and technology. A tool is made to support the business process and people. Without understanding the current environment, organization looks for a new tool every few years.
- Weak governance model between provider and customer (internal or external)
- Adopting too much of industry best practices (follow the best deployment in the same industry) when the organisation doesn’t have the resources (non IT) to execute or the knowledge of processes. This leads to a chaotic situation between the core team, implementing partner & stake holders.
- Unreasonable pressure from business for unrealistic time line and cost or what is commonly called the “Time to Market” pressure.
- Available value in the project deteriorates with time or ROI become negative.
- Project vision is not fully vetted or is misunderstood between stakeholders (business owner(s), executive leadership, PM and IT leadership)
- Working with unproven and unreliable vendors and subcontractors.
- The lack of Executive buy-in is often the cause of a project being seen to succeed or fail. With a strong relationship between the two organisations, open, honest and continuing evaluation of progress against the plan ensures there will be no surprises.
- Coders trying to live up to the “All knowing Miracle-Worker-Guru” status that is expected of them and the business-side’s willingness to blindly accept the coder’s time estimates.
- One of the key causes of project failure is multi-tasking — which is claimed to waste huge amounts of time and therefore introduce project delays. This short video on multi-tasking is a great resource.
- Lack of time and focus during the User Acceptance Testing phase.
- Project team lacking a cohesive knowledge base, meaning that teams do not have the necessary talent or knowledge to deliver the project. (This gets even worse when projects are designed in the vacuums of silo’ed IT services)
- Test and validation — whether performed during the project or as a last step, this piece is often left off the project due to time, people, or budget constraints.
- Following to false trends, not to real production need.
- Absence of an effective project governance mechanism.
- Poor limitation expectation leads to belief that a system will “solve” a broken business process through automation
- Insufficient and incomplete project plan: missing phase, insufficient testing, poor data migration, poor cut-over plan and/or no mock cut-over activities, etc.
- Poor benefits expectation leads to user disappointment and acceptance failure.
- Uncertainty of solution for customizations: sales team often sell something based on a high-level understanding of what’s needed and once in project mode implementation team can’t deliver.
- Poor cost expectation leads to budget constraints and poor quality.
- Unexpected interference: new directives from top level, key resources leaving project, etc.
- Common cause of project failures (delays, budget over-runs) is data. Data not available in a timely manner, or not being of high quality and in sufficient volume — will impact the timeliness and quality of every phase of project.
- Hardware and software unknowns, especially with new versions and technologies being plugged together for the first time
- Poor written scope. The input from the stakeholders is vague a majority of the times and added to that, if the PM does not bring in the appropriate SME, it will prove worst.
- Project Manager does not understand the technology.
- Not enforcing certain levels of discipline that is required to manage large projects. Too often we end up cutting corners that ultimately cost a project’s success.
There can be several causes of project failure and each failed project has its own set of issues. What according to you can be some other reasons for projects to fail. Do let us know in the comments section below.
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