Change for the better is impossible without failing a couple of times. However, when it comes to digital projects, mistakes have numbers attached to them. A single overlooked step can nullify the amount of hours and resources invested in development, compromising trust in the development team and executives. For that reason, enterprises want their IT projects handled and executed smoothly, with as little friction as possible.
Nevertheless, companies around the world spent $2.3 trillion on digital projects that failed in the end. In addition to different studies consistently reporting at least a 70% IT project failure rate, executives approach IT projects apprehensively, not knowing what kind of blindspots and pitfalls they might encounter. To address the concerns of project managers and add more certainty to their roadmap, we’re going to take a look at the most common IT project failures and explore the practices for avoiding them.
When is a project considered a failure?
When an IT project fails, what does it look like? The first thing that comes to mind is the lack of expected results and value. It significantly impacts business, leading to financial losses, reputational damage, or operational disruptions. Not to mention the opportunity cost, whether it’s growth or competitive advantage.
In general, an IT project fails when:
- It doesn’t deliver results proportionally to investments
Any change must live up to expectations to bring even more positive changes. However, when the project stumbles and ends up unable to make the difference, it’s deemed not just a waste of time and resources, but also gives an impression of a dead end. Not only there was no improvement, but the enterprise is now also set back because it could have used its assets for a more valuable direction. This issue remains quite common as 69% of operations and supply chain offices expressed dissatisfaction with returns on their company’s technology investment.
For example, an enterprise decides to automate its analytical processes. Stakeholders are promised that this change will allow managers to generate reports a day instead of having to gather data in months. However, when the works are complete, nothing changes. Maybe it’s because new tools aren’t user-friendly and managers have trouble navigating the features. Maybe there is a problem with extracting data. The result is the same: the project didn’t make any meaningful impact and brought everyone back to square one.
- It wasn’t delivered on time
There always has to be a certain timeframe for the project. It should be planned and delivered in a way that will allow users to get used to new features and continue their work uninterrupted. While this rule is seemingly easy to implement and follow, calculating the time needed to complete the project and considering unforeseen road bumps is a challenging task—which is why only 29% of IT projects are completed on time.
Sometimes, executives want to adopt a new solution right before their hot season—believing it shouldn’t take much time and the employees will be able to proceed immediately. But this is far from the truth: you need time to not just develop and integrate the technology but also evangelize it across your departments and onboard your teams. Therefore, if you expect everything to be complete in a couple of months, it’s a guaranteed IT project failure.
- It didn’t include all the key stakeholders
Sometimes the innovation is functional and has no hiccups in IT performance, but meets resistance during implementation. In that case, the project failed from stage one because key stakeholders weren’t involved. As a result, the product doesn’t align with all the needs and objectives and can’t be properly integrated into workflows.
Stakeholder management is a crucial part of project management and key to project success. Failing to meet stakeholder expectations can lead to project failure, but to mitigate this risk, we have a discovery phase. At the beginning of the project, all key stakeholders should be identified, and their expectations captured and managed effectively – during requirements gathering, providing updates, and making decisions on time, cost, and resources.
- It’s buggy or low-quality
One of the most obvious signs of an IT project failure is its poor performance. As a rule, the more intuitive the solution, the better. Intended users should be able to interact with the product as soon as possible, navigating them through all the features effortlessly and leveraging them to their advantage. When it doesn’t happen and instead of a smooth user experience there is a crawl through endless bugs and errors, the project's success is questionable.
Sometimes a low-quality product can still be considered a success. For example, if it's a beta version of a high-priority project that needs to be delivered quickly and the stakeholders have accepted its initial low quality in advance. But if the goal was to create a user-friendly product, a seamless bug-free experience is a must—accordingly, not delivering on that part means project failure.
Most common causes of project failure
Depending on the technology type, many diverse factors result in IT project failures. Many solutions can be compromised throughout the entire development life cycle—and the issues will be revealed only after the product is complete and deployed. Therefore, it’s important to start with the most basic and frequently occurring pitfalls.
1. Ineffective leadership and poor IT project planning
IT projects thrive when built upon comprehensive planning and deep dives into enterprise core needs. Accordingly, when there is no research before the project or that research barely scratches the surface of priorities and pain points, the risk of IT project failure becomes imminent.
However, what are the trademark signs of poor planning?
- Undefined end goals
Quite commonly, failed projects are projects with an identity crisis. They are built on vague expectations and vague KPIs. Nobody can tell who exactly the solution was made for, what objectives it pursues, or how it will drive value. Then there is such a disconnect, it means that there is no leader to gather involved units and no planning to outline the milestones. - Absence of proper discovery phase
The discovery phase is one of the most essential elements of IT project development. This is where leaders mitigate potential risks that could lead to project failure and make sure they are on the same page with stakeholders. Accordingly, the discovery phase also identifies all important stakeholders, takes note of their concerns and priorities, and incorporates them into the journey ahead. Skipping the discovery phase results in nothing, but a compromised project.
- No established leaders
It’s not enough to appoint a project manager and call it a day. The skills and qualities of the project managers matter immensely. For example, only 56% of project managers held the qualifications necessary for delivering the projects they were assigned to. In other words, almost half of project managers start projects lacking important technical knowledge, communication skills, and collaboration abilities.
It’s not just about project managers. Technology executives should also be involved in communication and engaged in every step of the project. When they don’t participate until the last stages, the project lacks insights and perspective it could have benefitted from.
2. Change in priorities
Change is a normal part of today’s business environment. However, it can pose a challenge for enterprises’ tech teams, putting them at constant risk of delivering a project disconnected from the relevant organizational needs. For example, in 2021 41% of IT project failures were attributed to organizational change, when the end project results were unable to meet enterprise goals.
However, can development teams not notice the change and adjust accordingly? Aren’t they part of the organization?
Every department and team have their specific flows and routines. Technology teams work on the tasks given to them at the stage of establishing product concepts and goals. Their responsibility is to deliver the features and functionalities discussed and approved. Since product development includes ample work, they rely on managers and executives to keep them on track.
Essentially, organizational change can compromise a project because of technology executive indifference. The modern tech leader role goes beyond managing IT structure, transitioning straight to proactive engagement in company strategy. Accordingly, many tech executives are now expected to be avid participants in enterprise transformation, being aware of how and why behind every project—and providing necessary change management. When these expectations aren’t met, IT projects fail.
While requirements changes are normal in an Agile environment, it's crucial to always keep the updated project goals and stakeholder expectations in mind as a baseline to avoid scope creep, which can distract from the original objectives and lead to missed deadlines.
Scope creep is a particularly dangerous consequence of the sudden change in requirements—mostly because of its ability to subtly sabotage the team’s efforts. For example, the project scope is seemingly going well, with every team member doing their best and closing sprints. However, at the same time, the project doesn’t move forward—the product backlog keeps growing, and new feedback keeps coming, with the release date nowhere in sight. This development puts considerable pressure on the development team and drains all the resources available for the project.
3. Bad communication and lack of stakeholder involvement
According to the 2023 KPMG technology survey, 46% of organizations attribute the issues with their technology function to a lack of governance and coordination between teams. That number marks poor communication as one of the top IT project hurdles. Most IT project failures stem from weak or non-existent collaboration between stakeholders, managers, and teams. Lack of visibility, unclear objectives, undefined opportunities—it all boils down to the disconnect between project participants.
Many issues can be safely addressed if identified in time. However, quite often important suggestions fall through the cracks and either emerge once the project is done or at the later stages, when troubleshooting takes much more time and resources.
Such an issue isn’t uncommon for large enterprises with numerous stakeholders. The more people are involved in the project, the more complicated the process becomes. Everyone has concerns and expectations, so unless somebody keeps track of feedback, valuable information will inevitably become lost along the way.
4. Insufficient resources
Do more with less is a dream scenario for many executives and investors. Moreover, it’s an idea behind many projects, such as intelligent process automation. However, this goal can backfire when project leaders let their concerns cloud their judgment and overestimate the capabilities of their teams. This mindset can result in numerous complications, such as:
- Unrealistic deadlines
While modern technologies operate much faster and development processes have accelerated considerably, good products aren’t made in a day. This is particularly true regarding enterprise-level digital projects that have to be incorporated into the organization’s infrastructure. Every change is time-consuming and requires planning in advance. For that reason, executives are recommended to consult with development teams and base project deadlines on their experience and estimations. - Stretching human resources
Over-relying on the “less with more” approach, leaders can assign the same experts to work on several projects at the same time. Rather than delivering results, such decisions usually lead to increased risk of human error, employee burnout, and delayed releases. - Under-allocating talent
When it comes to project development, the talent and skill set of employees matter immensely. Therefore, a decision to save costs and time by appointing inexperienced workers for tasks they’re not qualified for increases the risk of failure. While it’s possible to nurture a professional, it should involve actual training—otherwise, untrained employees will make mistakes that can compromise enterprise productivity. - Underestimating costs
Even with the most optimized expense and outcome ratio, any IT project will still require considerable investment. A successful project delivers lucrative returns on this investment, while an unsuccessful project doesn’t—this is the thought leaders should base their project budget on. If there is no realistic understanding of how much a project costs, development teams risk running out of resources in the middle of the process. - Rigid methodologies
Many enterprise processes rely on agility—project development is no different. Quite often, teams find themselves performing in a high-pressure environment where they need to simultaneously progress the development journey while identifying hidden issues, exchanging feedback, and testing use cases. However, adherence to outdated methodologies often prevents the teams from scoring these objectives and leaves them unable to respond to changing requirements.
Rigid methodologies, such as waterfall methodology, are linear and consequential, divided into several phases. While seemingly predictable and comfortable to work with, these approaches are averse to change and don’t allow for in-depth collaboration where it’s needed. So, when it comes to complex projects, you don’t want linear methodologies—you want to be agile, you want your development cycles to be shorter and you want as much feedback as possible on every stage.
Best practices for avoiding IT project failures
After exploring the causes of unsuccessful IT projects, one conclusion can be drawn: the human factor defines the outcomes. Managers in charge of the project need to be a constant presence, maintaining communication and keeping all the participants synergized with their journey. Albeit overwhelming, this task becomes achievable with several vital practices:
- Starting with a discovery session and a comprehensive project planning
To ensure every participant is on the same page from the very beginning, the discussion should take place as early as possible. The decision-making group must discuss the need for the solution with experts, dissect the presumed concept, and exchange suggestions and alternatives. Doing so allows the team to polish the project idea, find the route with the best resource-to-value ratio, and establish communication channels.
A proactive exploration of potential value can reveal great opportunities. We had a case where the client came to us with a pre-audit tool update request, but during our research, we discovered that the client’s solution could go from facilitating pre-audit routines to creating a single audit standard for enterprise accounting worldwide. By acting upon this discovery, the client now has a one-of-a-kind cloud platform that replaced multiple audit tools with intuitive functionality.
- Securing strong leadership and governance
The project should always have a leader—someone who not only oversees the progress but also builds and encourages communication between all involved parties, keeping everyone updated and in sync with the journey.
A team leader often fills the role of a relationship manager, bridging development teams and stakeholders by continuously informing the latter about the course of the project and estimated completion time. However, the most important aspect of a leader is the ability to enable team autonomy after setting processes.
The goal of a leader is not to control everyone and everything during project development. It’s the opposite: a good leader builds a self-driven team that performs seamlessly without requiring constant guidance. True leadership is understanding how to achieve that result and how to create the necessary mechanisms.
- Setting SMART expectations
Project expectations should stay realistic, all the time. While the development team is familiar with the limits of innovation, it’s important to introduce stakeholders to these limits, explaining where technological capabilities end and human effort takes over. To keep their vision rooted in reality and their journey predictable, executives and managers need to approach the project by constantly reviewing their understanding of project objectives.
Specific
What are the main pain points the solution needs to cover? Why is it important? How it will do it?
Measurable
What are the metrics and scores for tracking the solution’s efficiency? Is there “before” and “after” to compare?
Achievable
Are the expected results possible to achieve with available resources? Does the team have the tools and the professionals for the tasks?
Realistic
Can the project deliver the desired outcomes? Are these goals possible to achieve within the outlined time frame?
Time-bound
What outcomes will be delivered in a month after product deployment? In a year? What is the deadline for project completion?
- Identifying and engaging all stakeholders
Keeping the project in synergy with business needs and objectives requires building an organized network of communication between all stakeholders involved. This task gets more complicated when a large organization has many departments and units, making it difficult to identify all the stakeholders. However, the latter is integral to successfully meeting every requirement and avoiding scope creep.
Map out
Identify all potential stakeholders (those who may affect or be affected by the project) and assess their level of interest and involvement.
Connect
Determine the preferred methods of communication with each stakeholder.
Synergize
Ensure that identified stakeholders are part of the communication loop, considering their competence, involvement, roles, and responsibilities when discussing requirements, changes, schedules, or other relevant project topics.
To correctly identify stakeholders, project managers need to have an accurate understanding of the change the project will deliver—and map out groups who will be particularly affected by this change. Then, they need to find the leader of each group and stay in touch with them throughout the project.
- Implementing change and risk management
Many IT projects encounter disruptions—and prevail if teams are prepared to handle them. The secret to preventing or overcoming issues like scope creep is having proper, adaptive practices in place.
Albeit Agile environment is more adapted to changes, it is crucial in a competitive world to have a proper mechanism in place to manage these changes. This ensures that they do not become a reason for project failure.
To establish change management mechanisms, leaders should take the following steps:
- All proposed changes should be verified to ensure they align with the original project goals, preventing any deviation from the core objectives.
- Any change introduced by one stakeholder should be communicated to all relevant parties to ensure no key stakeholders are overlooked, which could otherwise lead to serious consequences in the later stages of the project.
- New changes to be implemented must be thoroughly analyzed in terms of their impact on time, quality, and budget to ensure that they are acceptable and still meet the project’s goals.
When we worked on our client’s pre-audit tool transformation, our work scaled rapidly. We went from 10 people to 70 in a relatively short time. However, we were prepared for this, so we switched to the scaled agile framework (SAFe) quickly and were able to keep up the pace, meeting deadlines for each development stage.
- Using agile and flexible methodologies
Volatility of development processes can only be tackled through fast reaction and adaptability. This is why Agile methodologies delivered a 64% success rate according to a 2022 report. These practices are essential for equipping teams with approaches and mindsets needed for navigating sudden changes and, what is even more important, teaching them to interact with their surroundings. For instance, an Agile framework identifies relationship managers and provides a detailed network of connections and feedback channels, which facilitates collaboration and communication. - Thorough testing and quality assurance
One of the most foolproof ways to erase hidden project issues is consistent testing—particularly during the early stages of development. But, depending on the scale and complexity of the project, this effort may take too much time and resources. For that reason, automated testing becomes a must for preventing IT project failure.
Test automation is a solid response to dynamic pace of project development. Testing teams can’t physically asses every project stage and keep up with deadlines—but with automated testing tools, they become able to run multiple tests and ensure seamless quality of the end product.
- Engaging technology partners
Finding the right talent for the right task is critical. However, when there is a strict timeframe and the search takes too long, cooperating with a technology partner empowers teams with much-needed talents faster while providing greater value. An experienced partner provides their expertise in the niche, bringing an in-depth perspective to project roadmap as well as reducing the risk of failure.
An external expertise is detrimental to securing project relevance and ensuring its resilience. As a manager, you can evaluate the project’s impact on internal teams and gather feedback, while a technology partner is familiar with multiple practices and approaches for smoothly integrating changes with company workflows.
If you want your IT project delivered with minimum setbacks and with maximized returns, let’s chat!
With agile and change-driven teams of Trinetix, you’ll gain more than strategic guidance and exclusive insights—you’ll have a committed partner sharing full responsibility for product outcomes and committed to securing long-term value.