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Why Do Most Tech Projects Fail? – Top Nine Reasons for Failure

Recent research indicates that approximately 70% of all tech projects fail in any given year. This leaves us with a 30% success rate which is extremely low despite all efforts to increase success rates. Ultimately, this causes one to wonder: What is it that causes so many tech projects to fail? In this article, we have outlined the top nine reasons for tech project failure.

Reason 1: Lack of clear vision of requirements/goals

A major reason tech projects fail is because they have poorly defined, or undefined, outcomes. Loosely defined objectives are hard to fulfill when no one defined what they will look like and how the team can go about achieving them. Creating measurable goals will help the team determine whether or not they are able to achieve them. Without measurable goals, how will you know when you’ve succeeded? Teams need a clear plan with set project markers in order to succeed. Setting milestones and benchmarks throughout the process will help the team stay on track if they have been sticking to the original plan. These markers help the team reassess how the project is going every couple of weeks. Frequently changing the goal will lead to project failure in the long run. 

Before starting a new tech project, it is important to understand the current state of the company. Teams often want to skip over this step since they view it as a waste of time and want to get the project moving. However, it is a crucial step when working towards a successful tech project. It is important for teams to create clear objectives and learn problem solving techniques early on. To put an end to shifting requirements and priorities as well as unclear objectives, teams need to become proficient in articulating their problems clearly and concisely to ensure that they ask the correct questions from the beginning. Before starting the project teams should assess these questions to help them stay on track:

  • Why is this project being done?
  • How will we measure success?
  • What tools or data are needed to complete this project?

Reason 2: Lack of Executive Sponsorship

For a tech project to succeed, it needs executive support. It can be very difficult for employees to become dedicated to a project that C-level executives and their specific department leads are not invested in. Inadequate sponsor support can often lead to a lack of commitment from project team members. Without the support of executive sponsorship, team members can find a lack of accountability amongst one another. Thus proving that it is often best for executives to lead the project and hold the team accountable.

Reason 3: Lack of a Dedicated Project Manager

Teams should identify up front who is going to oversee the tech project and ensure that each individual will be highly present throughout the duration of the project. Team members need their project managers to be active and available to them. Lack of investment from a project manager will result in poor team dynamics and inefficient communication. Strong communication and leadership from the top down is necessary to ensure that a tech project succeeds. The absence of a dedicated project manager can be detrimental to the success of the team as they need someone to ensure that the project is staying on track and moving forward constantly. 

Reason 4: Lack of Dedicated Domain Experts/ Project Team

It is important to generate a deep understanding of what your team is, and is not, capable of. Addressing your skill sets ahead of time will ensure the success of your team as they can tackle the project better without worrying over the incompetence of your team members at the last minute. When forming a team, it is ideal to have teams with diverse backgrounds, opinions, and skills so the team can generate advanced ideas as a whole. Having these differing perspectives helps teams go through even more alternative solutions and thus rule out many alternative options to truly get to the best one. Teams that are missing critical skill sets or don’t have the correct talent to properly tackle the issue will struggle throughout the duration of the project which is why it is so important to properly build your team and understand your strengths and weaknesses on the forefront to gain better comprehension of who you are working with.

Likewise, it’s important to develop better communication skills with one-another to grow into a more aligned team. Team members dedication to a project will increase the more personally they get to know their teammates. In-depth knowledge of how the business currently operates will help team members better understand the issue their tech project is looking to tackle and thus help them become more dedicated to the project at hand. 

Reason 5: Project Manager/ Management Incompetence

Lacking strong project management can be a big indicator as to why tech projects fail. Project managers need to take accountability for running the project as weak project management inhibits the success of the team. Likewise, project managers need to be able to look at the big picture and balance all the logistics of the project while not getting caught up in one aspect of the project. Essentially, project managers prove their incompetence if they are unable to do all of the following tasks:

  • Manage money and time
  • Communicate efficiently
  • Make informed decisions
  • Measure the performance and success of both the project and team members
  • Effectively lead their team

A good project manager has all of these attributes and uses them to create good project management practices. They should be able to convey the details of the project to individuals outside the team on a regular basis. Having strong visualization and storytelling skills aids in the ability to clearly communicate what’s happening with the project.

Reason 6: Vendor Incompetence

Vendor performance and management directly impact the success of a project. Incompetence of a vendor is a direct sign that the project can be anticipated to fail. Despite vendors’ best intentions, if their performance has missed the mark then the tech project is going to suffer the consequences. There are numerous reasons why it can be beneficial to include an outside vendor in a tech project, but if they are unable to perform to the needs of the project then that tech project will not succeed since they were reliant on a service that was incompetent to their needs. 

Reason 7: Flawed Vendor/ Product Selection Process

When considering potential vendors, it is important to take your time weighing out the pros and cons of each to ensure that the vendor you ultimately choose is going to be compatible with both your team and project. Give this step of the process enough time to meticulously make your decision. Making the wrong selection could be the very reason your tech projects fail. To ensure the selection process goes well, some tips to consider when looking for a vendor include:

  • Consider what projects the vendor has done before and what they have little to no experience with
  • Look into their credibility
  • Discuss a rough timeline to set these expectations on the forefront
  • Consider the cost risk of choosing one vendor over another 

Reason 8: Extended Project Timeline

Getting off schedule and running out of budget are often related to poor project management discipline. This is another reason tech projects fail and proves there can often be a multitude of correlating factors causing failure. Some of the main causes for an extended project timeline include:

  • The problem being incorrectly solved.
  • The team was unable to determine a decent solution to the problem.
  • Continuing to over-invest time into the project because the team does not want to accept that the project was a failure and consequently a waste of time and money.
  • The team made changes to existing systems without fully understanding how they were currently working.

In order to deliver the project on time and on budget teams should:

  • Identify the correct problem and deduce a solution by using design thinking, prototyping and customer development techniques.
  • Develop an in-depth comprehension of the current systems to find the best method in fixing or replacing it.
  • Control over investing by motivating teams to complete their projects on a 50% time constraint of what is actually available to them.
If a strict and unrealistic schedule is set on the forefront, teams will be stressed out, constantly struggling to stay on track. It’s important to set a realistic timeline and stick to it as best as you can. When making a project timeline you must consider that things do not always go as planned. Teams need to create a realistic schedule by preparing ahead of time for hiccups that may come along the way and allow for a bit of wiggle room. 

Reason 9: Run Out of Money

Estimating a project’s schedule and budget can be extremely tricky. Inadequate cost estimates can create huge setbacks, but it is important to go through these steps and set a realistic budget ahead of time and stick to it throughout the project. These two can often go hand in hand as it is easy to quickly go over budget and over schedule.

Similar to creating a timeline, skipping the evaluation of where the project currently is often results in issues regarding:

  • The new system being unable to process the same data as the old system
  • Users not adopting the new system since it doesn’t have the same capabilities as the old system
  • The new system not being compatible with existing internal systems or external partners

These issues can result in cost and schedule overruns. Therefore, teams end up re-analyzing and re-implementing the issues they created into the new software causing them to spend more time and money on the project. Teams ultimately throw more money at the project because they don’t want to seem wasteful, and they want to avoid sunk costs. Thus, it is essential to evaluate the status of the project before beginning, to ensure that you are budgeting accordingly. Teams must determine if the economic cost benefit is viable before starting the project.

A potential solution to project budgeting issues is to encourage teams to become problem solvers by giving them a constrained budget of 50% of their true budget and timeframe to initially work with. This way teams learn to manage the project with a stricter time frame and budget and end up having some leeway to fall back on if needed.

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