Why Software Projects Fail, and the Traps You Can Avoid That Could Spell Disaster

A non-evaluative approach is a pertinent reason why many IT projects fizzle out. Knowing the purpose of the project is extremely important.

Why Software Projects Fail

Is software failure really inevitable? Well, as a matter of fact, a surprising amount of software projects fail. You must be wondering, what the software project failure statistics is. According to a study done by Geneca, 75% of business or IT executives feel that usually their projects are doomed right from the very beginning. Now, this mindset is the last thing you need!
According to Project Management Institute, organizations are wasting an average of $97 million for every $1 billion invested, due to poor project performance. PMI came up with a project performance metrics that exhibited the following project failure statistics:

  • 14% of IT projects fail completely
  • 32% projects lost their project budget upon failure
  • 49% of the projects experienced scope creep that is, scope of the project was not clearly defined and controlled

 Software Projects Fail

While working on a project whose integral part is the development of software as a service (SAAS) app or customer relationship management (CRM) tool, software failure is not justifiable. To avoid such blunders, you need to understand the reasons why software projects fail and how to avoid these traps. Also, if you want to serve your customers efficiently; you need to concentrate on proficiency during the software development phase. Let us help by making your software project success rate better.

Why software projects fail and how to make them succeed:

1.    Ambiguous Project Requirements

Did you know, less than 20% business executives describe the requirements process as the articulation of their business needs? Either the client is unable to define the requirements of the project or, the project manager is unable to understand the specifications of the project. This ambiguity further leaves the developers unsure of what features are essential. This further increases the software projects failure rate. These expectations should be laid out from a very early stage but unfortunately, that is not the case.

Case study: In 2008, Australia’s national airline – Qantas, cancelled its Jetsmart project. The project was worth $40 million and it entailed building a parts management system for airplane mechanics of the company. Following certain turn of events, the solution was so poorly executed and designed that the airplane mechanics refused to use it. After introspection, officials stated that instead of understanding the requirements properly, they just designed what they thought was appropriate. They finally had to abandon a costly IT project and ended up building a replacement solution which took another three more years! Now that you know the seriousness of this situation, let’s talk about the solution.    


Projects with effective communication are twice more likely to deliver project scope and meet the quality standards successfully when compared with the projects without effective communication.

Why software projects fail

So, here is what you need to keep in mind to overcome this cause of software project failure:

  • Make sure that you are working with a professional team who knows the importance of the 5 whys.
  • Team should never shy away from asking questions till they dive in deeper and reach the root cause.
  • The team should also have a proven track record of scaling software.
  • You should never forget that communication is the key to build a good product or service.

Why software projects fail

Note: The tree swing analogy is a generic concept; please re-create this image with text in a different art style. DO NOT copy it since this image as is because of copyright issues. 

2.   Unrealistic timelines and planning

According to Innotas, 55% of IT professionals surveyed indicated that they had a project fail due to lack of time, staff, resources, budget and planning. In the early phase of a project, time estimation is the best educated guess because teams are still comprehending the project requirements. One of the most common reasons why software projects fail is because of arbitrary deadlines and plans that are set with insufficient data. Unrealistic timelines and planning are mainly set because of these two reasons:

  • Inexperienced development teams: Such teams assume that everything will go smoothly. They do not keep the project risks and project budget in mind.
  • Inexperienced project managers: Sometimes project managers request an estimate too soon and don’t consider checking in with the team to find out if the given timeline is feasible or not.

 40% of CIOs say that some of the main reasons IT projects fail is an overly optimistic approach and unclear objectives. Because of these factors, the team would have to rush the software development process; this increases the error rate and results in an unsatisfactory product or service which finally answers the question why software fails?


  • Ranged estimates: You should provide ranged estimates in the case of poor estimation practices. For example, if developers estimate that they require two months to finish a project, consider the risks and uncertainty that can take place. So, it’s better to provide an estimate with some buffer time included in it.
  • Re-estimate frequently: Since upfront estimation is the cause of unrealistic timelines, you should re-visit your plans and estimates frequently. Ask the development team habitually to check if the project is still on track or not.

 With the help of these practices you will be able to deliver on-time-in-budget projects and minimize software development failures.

Why Software Projects Fail

3.    Lack of testing:

Software should be thoroughly tested for bugs. But, unrealistic timelines and planning often leads to little or no testing which further results in software failure. When there is a lot of pressure to deliver a project, companies test their software at production stage which compromises the security. So, software failures due to lack of testing is one of the major reasons why IT projects fail! This will result in an unsatisfied customer or worse.
Solution: We would advise that you should execute testing throughout the software development life cycle. It is always better to test each component as soon as it is completed. Obviously, you’ll have to allocate ample amount of time for testing since it is an integral process and should not be avoided at any cost.

4.    Poor project management

Poor project management is the perfect recipe for disaster! Time, scope and budget are the key factors involved in a project but a proficient project manager is an essential element that cannot be ignored. Without a project manager, the result will be unsuccessful projects.  

Poor project management


According to PMI, organizations that invest in proven project management practices waste 28 times less money because more of their strategic initiatives are completed successfully. It would be best if you have someone who is monitoring the entire project. This way you will also be able to diminish procrastination of work in your team. We advise that the project manager or IT manager use an agile approach. In agile, time and budget of a project are fixed but the scope is flexible. Also, most agile teams operate in a scrum framework.

Let’s discuss a few tips that will help you in choosing a software development company for your projects

In an ideal world, it is very easy to assume that solving the above issues are very easy, all you have to do is find a software development services company to bring your ideas to life. Well, we are sorry to say but it is not that simple! It is very difficult to find companies with talented and efficient developers. You will have to consider so many factors before finalizing the software developers for startups.

  • Do not ignore the latest technology and tools: The software application development company should be updated about the innovations happening in the industry. You should not trust a software development company if their technologies, tools and methods are out-of-date, even if only by a few years.
  • Strong insights of the project management model: According to PMI, 71% of organizations now use agile approaches to their projects. If you have a team of agile ninjas by your side, the project management experience will be smooth. A team that defines your idea, finds the best solution, starts the project after analyzing, planning and estimating. Further, get the product finalized with proper testing and well crafted software.
  • Dedicated resources are a must: Usually software development firms do not have sufficient workforce that can be assigned to specific projects. Dedicated resources would be experts who will look into different aspects of a project such as, developers, QA testers, project leaders, analysts, etc. Software development companies for startups pay undivided attention to this facet to provide better and error-free service.

Important takeaways

  • Communication is the key, it is very important to understand the exact requirements of the project leaving no room for ambiguity to hit the bull’s eye.
  • The timelines of the project should be re-visited while working on it so the project is a success.
  • The lack of time, resources and budget should be kept in check.
  • Adhesive testing should be done throughout the software development life cycle to avoid bugs and failure.
  • Invest in proven project management methods and resources to make your project a hit.

What we are saying is

Failure is not the end of the world; one should discover, learn and move towards the success one deserves! So, after reading this article we hope that you will not rush into the development process, but rather find a perfect custom software development company to assign your project to and achieve the desired results. All the best!

Tanya <span>Editor In Chief</span>
Written By
Tanya Editor In Chief

She is a content marketer and has more than five years of experience in IoT, blockchain, Web, and mobile development. In all these years, she closely followed the app development, and now she writes about the existing and the upcoming mobile app technologies. Her essence is more like a ballet dancer.

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