10 Reasons Software Projects Fail (and how to avoid them)

A study of 600 business and IT executives by software development firm Geneca found that 75% admitted that their projects were ‘always’ or ‘usually doomed from the start.’ (1) So it’s no surprise that about 14% of all software projects fail. (2)

Software project fails can be costly. In 2001, problems with Nike’s supply chain management system contributed to a $100 million loss. And just one year later, McDonalds cancelled their Innovate information-purchasing system after spending $170 million on it. (3)

To help you avoid software doom – and financial disaster – let’s take a look at some of the most common reasons why software projects fail. As you’re about to see, the results show that software engineer and author Tom DeMarco was right when he said, “the success or failure of a software project is seldom due to technical issues.”


  1. Late Delivery
  2. Blowing the budget
  3. Insufficient planning
  4. Bad communication
  5. Not meeting original objections
  6. Lack of quality assurance
  7. Not setting goals and milestones
  8. An inexperienced team
  9. Lack of flexibility
  10. Not focusing on the end user

1. Late delivery

If one of the first things decided about a software project is a set-in-stone deadline you’re setting yourself up to fail. That’s because the rush to meet the launch date leaves little to no wiggle room to factor in the sufficient time needed to create the design and user functionality before a single line of code is written. To avoid this, asking each department to estimate how much time they need on the project will help create a realistic timescale that you’re more likely to deliver on time.   

2. Blowing the budget

The average software project overran its predicted cost by 66% according to a study by McKinsey. (4) This budget-blowing bombshell was no anomaly. Other research suggests almost 53% of projects end up costing 189% of their original estimates. One costly example is Levi’s software migration project, which started with a $5 million budget estimate in 2003 and ended with a reported loss of almost $200 million in 2008. (5) The key is to ensure your budget is based on your actual requirements and with accurate input from stakeholders involved in every aspect of the project.   

3. Insufficient planning

As the saying goes, failing to plan is planning to fail. A survey by Innotas found that 55% of IT professionals said their development project failed due to lack of time, staff, and budget. (1) In other words, poor planning led to a poor outcome. That’s why taking the time to consider the full logistics of a software project will give everyone direction and help ensure that the relevant resources are to hand at the relevant times.

4. Bad communication

Poor communication in the workplace doesn’t just lead to low morale, stress, and unmet expectations. It also affects the bottom line with large UK businesses losing up to £4 million a year due to inefficient working practices. (6) Effective transparent communication helps ensure:

  • Everyone understands the requirements
  • Allows everyone to add their opinion
  • Keeps everyone on the same page

5. Not meeting original objectives

It’s estimated that the amount of time that programmers spend on rework that is avoidable is 50% of their time. One of the simplest ways to avoid this is to spend the time to define the objectives in detail early on in the project. Having a clear understanding of the business needs for the software project gives you a blueprint for what needs to happen and who needs to be involved to successfully complete the project.

6. Lack of quality assurance

Testing is to software what Mickey is to Minnie: partners for life. Rather than simply being something that’s done at the end of the project, testing should be factored in throughout the development lifecycle to allow for any potential bugs or glitches to be resolved in a timely and cost-effective manner. The risk with leaving testing to the end of the project is that if you’re facing a tight deadline you might not have time to test which can lead to broken features, unhappy users, and project failure.

7. Not setting goals and milestones

Ask yourself: does everyone involved with the software project know what the end goal is? Research suggests that the answer is often ‘no’ with one study finding that just 55% of business and IT executives felt that the business objectives of their projects were clear to them. (7) Setting a clear framework of the project priorities gives everyone an understanding of what success will look like, helps stakeholders input on what’s realistic to expect, and enables the project team to set checkpoints to keep everyone on course to the common goal. 

8. An inexperienced team

Assembling the perfect project team is a fine art. Too many cooks can lead to the project being hindered by clashing personalities and bureaucracy (not to mention a ballooning budget), whereas an understaffed squad may not have the required experience or skills to succeed. The goal is to cultivate a team with a winning mix of technical skills and temperament where everyone has a role to play. A key factor in enabling this happy balance is the project manager who will ensure the development stays on track by acting as a channel of communication to everyone involved.

9. Lack of flexibility

If there’s one thing you can predict about any software project it’s that unpredictable issues will arise. That’s why having a flexible project plan is imperative. As unforeseen challenges arise, being flexible gives you the freedom to take new suggestions on board or utilise new tools to help get the project back on track. Flexibility helps you innovate and being open to change helps you grow as a business, so although it’s good to have a clear end goal to aim for, don’t be afraid to make changes to your route map on the way to getting there.  

10. Not focusing on the end user

Considering the needs and requirements of the end user is an integral part of every software project but none more so than at the very beginning. That’s the stage where you should be posing the question: ‘Does this software project solve a problem the end user needs to be solved?’ If the answer is no, it’s time to go back to the drawing board. Keeping the user in mind throughout the project helps ensure you’re truly giving them what they need. Want more proof? Then check out these benefits of UX design.  

How to make your software project a success

Whether you’re looking to kick-start a mobile app, marketplace website, or custom software project, we’d love to help turn your business requirements into business success. So why not get in touch so we can discuss your project together?  


  1. https://www.entrepreneur.com/
  2. https://www.cio.com/
  3. https://spectrum.ieee.org/
  4. https://www.mckinsey.com/
  5. https://www.codementor.io/
  6. https://www.moorfieldscr.com/
  7. https://www.geneca.com/

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