Top 4 reasons a software project may fail.

May 24, 2023 |
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Throughout the history of the software industry, we have seen many software projects fail – projects that had promising scope and innovative features. A number of experts, in fact, believe that software projects are just prone to failure and product owners should always plan around such vulnerabilities.

However, this situation poses a question to potential product owners. Is it better to plan for failure and take care of it once it happens? Or should you assess risks and try to minimize them beforehand? And if so, what are the risks you should be the most aware of?

The CHAOS Report 2015, among many others, shows that software projects are statistically failure-prone. Among the 50,000 projects studied in the creation of the report, 56% exceeded their planned budget, 60% were not delivered on time and 44% did not achieve their feature targets. With the IT industry growing to such an extent and companies investing vast amounts of money on digitizing their services, such large percentages of failure are a warning sign for both you and us.

However, the good news is that this trend has been narrowing as the rate of failure consistently reduces from 1994 to the present. To keep up with that consistency and further reduce failure in software projects, it is important to learn and prepare for potential risks coming in future projects.

Therefore, here are four top reasons your software project may fail and how to be aware of them from the get go.

Why software projects fail

Every project is different and unique. From project requirements to the nature of the end user, every step is unique from software to software. So, every project also has its unique risk factors.

However, through over a decade of working in the software industry, we have seen some factors come up more often than others. Factors that, if not dealt with, can lead to big risks for the project’s success.

We will now discuss these common reasons behind software project failure. But before that, please keep in mind that most software projects fail not because of one particular issue but because of multiple factors in play. And managing risks associated with the factors mentioned below will not guarantee success for your project, but it will surely reduce risks of failure.

1. The project planning is subpar.

This is the biggest cause behind software projects failing. Planning can make or break a software project in such a way that even the best developers or an unlimited budget cannot save it.

Let us take a look at a case. The US’ healthcare.gov platform had everything a software project could need – $1.7 billion budget, a strong team of over one thousand engineers and many more. And yet, it turned over budget, missed its planned date of release and, when released, the software was quite poor in quality.

As you can probably predict, the problem with this software was in the planning phase. Being the official healthcare portal of the US government, it was bound to face heavy traffic from the get go. Unfortunately, the plan did not take that into account and a massive surge of users caused the platform to go down within 2 hours after release.

But – there were more issues like incomplete or confusing UI and incorrect insurance company data. In 2013, the then President of the United States regarded the issue by saying, “There’s no sugar coating: the website has been too slow, people have been getting stuck during the application process and I think it’s fair to say that nobody’s more frustrated by that than I am.”

It was an example of subpar project planning. Like mentioned earlier, a poorly put together plan ruined the whole project. So to reduce the risk of your software project’s failure,

  • Spend time and resources on creating the best project plan plausible
  • Do your research on how to plan a software project and
  • Hire experienced project planners to execute the planning and strategizing.

2. There are gaps in communication

Communication is the most important skill required to execute a collaborative project. Most, if not all, software projects will require you to work with a team. Lack of proper communication can cause serious problems in such situations and so can too much communication.

On one hand, you need to make sure that communication is always readily available within the team. On the other hand, you need to beware of ‘analysis paralysis’ taking up room in your project because of over communication.

To reduce risks of this genre,

  • Develop and maintain open channels of communication
  • Make sure communication is fast enough to solve problems and reach a solution quickly
  • Monitor overthinking about a problem and motivate finding solutions faster

3. The goal is unrealistic

A common reason for failure is setting yourself up for it from the beginning. And you do so by setting goals that are not realistically achievable. (I am not talking about just software development in this case).

When the goal is unrealistic and the development team is divided into too many expectations, even the best planning can not save your project. Your team is much likely to get burnt out soon and a burnt out team always leads to failure.

To maintain the quality of your software product,

  • Plan in a way so that your team does only one thing at a time.
  • Look out for signs of burnout.
  • Do not throw continuous tight deadlines that become too much to handle.

4. The project is too big

Research shows that larger projects fail more frequently than smaller ones. According to CHAOS Report 2015, “It is clear that the larger the project, the less valuable the return rate. In many cases larger projects never return value to an organization.”

Software projects tend to lose efficiency as it gets too large both in terms of specifications and in terms of team size. It is usually associated with inability of proper communication, increase in number of mistakes and lack of focus among team members.

To resolve issues caused by too big a project,

  • Break the project down into smaller ones and
  • Create small teams that interact only at set points.
Software projects are risky and prone to failure. But at the same time, they are the future of business. With the progression towards a smart world, software solutions are going to be at the heart of development. So do not let these risks scare you in the way of reaching your goals.

Plan, communicate and set realistic goals. In case you are interested in collaborating to accomplish any part of developing your custom software, we will be happy to help!

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