66% of software projects fail according to the chaos report of 2020, and the 2020 cisq report found a loss of $260 billion in US firms due to unsuccessful software projects.

It sends a chill down your spine right!

We all know that software development is the basis for the progression of technology, whether it is mobile apps, SaaS, or web development. Even though apps and software are an inevitable part of our daily life, the failed stories of many echoes around us.

Why does this happen even though successful software projects aren’t rare? Don’t fret; we got your back.

Below are the ten major reasons that can cause your development teams to get trapped and how your tech teams can help avoid them.

When is a Project Considered a Failure?

Project failure happens when it doesn’t meet the acceptable cost and timeframe agreed-upon. Some projects can be a failure if they don’t meet the financial estimation or the ROI target.

Meeting the business requirements while delivering the project is yet another factor influencing the success of any project. The finished project can also be a failure by not meeting the stakeholder’s expectations.

Some of the most important factors to consider while delivering a software project to make it successful:

  • Timely Delivery
  • Project should fall within budget
  • Meeting all the business objectives
  • Meeting stakeholders’ expectations
  • Customer Satisfaction
  • Proper governance of the project

Reasons Why Software Projects Fail and How to Get it Right

Many issues can work against your project team members, causing them to derail even if the ideas are great. When a software project fails, it can be devastating for many in your company, disappointed by wasted time, opportunity, and resources.

However, understanding the traps in advance can help you and your team tackle them like a pro. So to guarantee success for your next project, look out for these challenges.

1. Absence of Vision (Unclear Goals and Objectives)

Vision can be anything from clear goals and objectives of your company to the stakeholders’ expectations. So one of the most common reasons for project failure is to begin work with unclear project objectives and goals.

The right kind of project goals can help the team while making difficult decisions.

Here are five goals to achieve for every project that you manage that are generic to all industries and kinds of projects:

  • Finish the project on time
  • Finish the project under the allotted budget
  • Meet the project/business requirements
  • Improve project productivity and performance
  • Improve team communication and collaboration

Not to point fingers, but the Lehman brothers, and Blockbuster are some of the prominent names in the list of companies in project failure examples.

Projects can be complicated, which strengthens the statement of why you should define your vision clearly. Once the project’s goals and objectives are clearly defined, it’s time to manage your team to abide by each.

2. Expecting a Miracle

When you go forward with your ideas, there will be problems.

Real-life is not like the movies; you can’t expect a tech wiz to come and solve your problems in a flash. Real-life hurdles require a mix of skill and team effort.  You have to be patient while working on it and strive to see the silver lining among the dark clouds.

Tech leaders can encourage group discussions of the problem at hand. Brainstorming ideas is a great way to ensure a speedy and efficient recovery process. Choosing the right people at the time of hiring can be a huge asset in risk management.

3. Improper Planning

Planning is the most crucial stage of work before beginning a project. The success of a project is through proper planning. A perfect project planning involves various complexity levels, and it is impossible to explain them all here.

However, some standard practices around all the industries are common. Here are they:

Set and prioritise project goals

  • Define deliverables.
  • Create project schedules; give them a start and end date.
  • Identify issues and do risk assessment.
  • Present project plan to stakeholders.
  • Know if and when to quit.

Once the planning is proper, then it’s time to schedule a project kickoff meeting. As a bonus, here are the seven major steps involved in streamlining any project kickoff meeting:

  • Establish vision and deliverables.
  • Identify team and set roles.
  • Develop initial project plans.
  • Establish a proper team communication routine.
  • Choose your project management methodology
  • Choose the tools your team will use.
  • Schedule your kickoff meeting

These steps help every team member know his/her roles and work on a common goal. There’s no wrong with removing any of the above steps that do not add value to your project. You can now go to the drawing board and outline, remove or add every step and action needed to complete the project.

Also, take a look at the Startup Guide: Things To Consider When Bringing On Early Team Members.

4. Improper Scheduling

We have talked about improper planning on the previous step, and another most significant reason projects fail is improper scheduling.

A project schedule is a record managing all the effort required to deliver the project on time. It includes many tasks, each of them having a due date to complete on time.

After understanding the project scope and what it needs, schedule the duties according to the team skill sets. Getting your teams to work more in a fixed time to fit the client’s demand is the worst thing to do and a bad example for project scheduling.

Now here’s how to make a perfect project schedule; before you begin project scheduling, ask yourself these four questions:

  1. What are the objectives?
  2. When will it be done?
  3. Who will do it?
  4. Where will it be done?

Once you’ve answered the above questions, you can proceed with the creation of project scheduling. It’s essential to understand and follow the below steps of a project scheduling process:

  • Step 1: Plan schedule management
  • Step 2: Define the project activities
  • Step 3: Determine dependencies
  • Step 4: Sequence activities
  • Step 5: Estimate resources
  • Step 6: Estimate durations
  • Step 7: Develop the project schedule
  • Step 8: Monitor and control

To make your project scheduling more efficient, break down your project into small and easy-to-execute tasks with the help of any project scheduling techniques like; Task lists, Calendars, and Gantt charts.

5. Unrealistic Project Budget

Budget is an essential factor for every project before it can be up for development. The worst thing that causes any project to fail is to fall short on the budget midway through the project.

The right way to manage the budget for any software project development is to make the product you’re developing pay for itself.

Here are some tips on how to set a perfect budget for your custom software project:

  1. Identify your project scope
  2. Define resources
  3. Breakdown software features
  4. Budget each high-level feature
  5. Allocate your budget with a buffer
  6. Use historical data
  7. Baseline and re-baseline the budget

By completing all the above activities, you will determine your overall project costs. Once you master this process, your work will accelerate, and your project development cost will succeed to lie within your budget’s borders.

Do you know the Average App Development Cost in 2021?

6. Lack of Communication

Lack of communication is the most expensive mistake when coming to project management, especially if the communication gap is too wide with the project stakeholders; it will cost you a lot of money.

Effective communication is a prominent element in building trust, mutual understanding, and developing safe and robust relationships across the company.

Reasons why poor communication can excessively affect the success of your project:

  • Failure to figure out the stakeholder’s prospect precisely.
  • Insufficient commitment towards the project.
  • Disagreements and arguments among the project team and stakeholders or between stakeholder groups.
  • Team members can be quickly isolated and can disengage from the objective of the project, their roles, and their contributions.
  • The inaccuracy of the reports that do not reflect the actual status of the project.

So what’s the solution to perfectly achieve all your project success through perfect communication across the organisation? Here are some strategies you can comply with:

  • Be present and readily available.
  • Use project management tools to keep everyone aware of their responsibilities, run effective meetings, and keep them all on the same page.
  • Adopt a better communication plan by answering the following questions:
  • Take leverage of file sharing apps for the efficient workflow.
  • Use online communication tool whenever necessary.
  • Set Up an online review and approval process.
  • Celebrate achievements and build a strong team culture.

7. Moving away from the customer

For whom are you making the products?

Most people forget their audience and start moving towards something more aloof from what the customer actually requires. If you do that, you walk with a ticking time bomb.

Sometimes there is also a miscalculation problem; you make a software to solve a problem that you thought existed but instead do something unrelated to the real problem. The user’s point of view is crucial when developing a product. If they don’t find your software or app useful, marketing the software is useless. Does anybody remember Myspace?

There is no way around it, you have to go the extra mile and do market research to understand your targeted audience. Introducing a beta version of your product or service to the market to get honest to God opinion about it from your users is also a great option. With a beta version your development team can get a clear picture on what the people want.

Software  development teams should gather information from reliable customers to improve their product review. There will be spam reviews so the people involved should be reliable.

8. Substandard Engineers

It’s often a case of not choosing or assigning adequate engineers to the project. Not being willing to put some quality assurance people in place to cut some costs or accelerate results by cutting corners can drastically affect the projects’ success.

Testing the code in various environments is the fundamental purpose of quality assurance engineers. Only by recruiting suitable QA experts can you improve the quality of the software you develop.

We will strongly recommend you offshore your software development project rather than hiring a poor technical team to go the cost-saving route.

Developing any software is an art that demands top talents from the industry and needs precise planning for excellent execution. It doesn’t matter how great your idea is; if you don’t have the best team in hand, your software project will fail.

9. Lack of Adequate Resources

Cross-training and multi-tasking are the two common mistakes that many companies make to save organisational resources and cost-cutting. Companies tend to repeat these mistakes when there’s a sudden structural change within the organisation.

However, these practices will affect the project’s success and could fail the project prematurely. If you find the resources aren’t available, a project deadline extension is a good option on your table. However, it is not a permanent solution, and you must resolve this issue as early as possible.

For a complete resolution, practice the following steps to create a perfect resource plan:

  • List the type of resources required
  • Create a resource planning checklist
  • Construct a resource schedule
  • Manage and control resources

Have the right resource planning tool to keep you updated while the project is in progress. For your project to move towards success, managing your resources is a critical step within the project management schedule.

10. Resistance to change

Change scares people, and most people only like to venture through the most travelled road.

Being a good project manager means learning about the new changes happening around you and implementing these changes in your project.

There are so many project management tools to help you deliver your product efficiently and effectively. Many project managers are responsible for their project failing because of their adamant nature towards traditional methods.

Many Project managers are yet to deploy Agile learning and AI. Welcoming new tech into your arsenal will always greatly impact your work. There are hundreds of options for you to use, find the right one that compliments your product and make your project successful.

11. Lack of QA and assessment

Regular assessment has to be done to ensure the smooth running of the project. Even though there are initial plans and timelines, there will be a lot of unprecedented instances that may need critical attention. You need to have precise data on the progress that has been made.

The quality of the product determines the success of the product in the market. Therefore quality testing plays a huge role in the product life cycle. Many companies are reluctant about their quality testing. Trust me that will backfire.

We need to assess the project’s growth from the initial plan properly, and this needs to be in a clear statistical form to give a clear picture.

QA testing is not something you could forgo, and there should be a designated professional who can give an expert opinion on the product.


So you have gone through the six most common reasons why software projects fail in many companies. As a tech startup founder, you are responsible for taking the lead and ensuring those errors never happen.

However, talking about reality, a software project can fail due to a multitude of reasons. But by eliminating the above mistakes, there’s a high chance that a project won’t fail prematurely. After all, there’s no wrong in aiming for perfection, even though you and your team need a lot of time before your project can become successful.

If you still have any queries about software project management, contact us now and get a free consultation for your business from NeoITO, one of the leading software development companies in the USA.

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