The number of partially failed or over-budget IT projects has been very high in recent years. Various studies have shown similarly high figures.

Many customers try to shift the responsibility for project failures onto their IT managed service providers by means of strict contracts and contractual penalties. However, such contracts lead to more hedging and finger-pointing.

In a highly competitive market, IT consultants are forced to promise and guarantee things in overblown and costly tenders that they cannot deliver on afterwards. If they don't, their competitors will.

In this article, we look at the most common reasons why IT projects fail

  1. 1. Poor planning
  2. 2. Inaccurate goal setting
  3. 3. Conflict of interest
  4. 4. Too technical a focus
  5. 5. Lack of know-how
  6. 6. Over staffing
  7. 7. Saving at the wrong end
  8. 8. Project management
  9. 9. Agility vs. internal organization
  10. 10. Selection of technology

Poor planning

The mistakes often start with the planning of complex IT projects. Inadequate project planning causes the following conditions in the project:

  • Unclear scope.
  • Confusion about roles & responsibilities.
  • Inefficient utilization of resources.
  • Lack of resources at critical times.
  • Optimistic budget and time estimates.
  • Poor performance.

Inaccurate goal setting

Without clear objectives, complex IT projects run in uncertain directions and are not aligned with overall business goals. It is crucial that companies first develop a digital strategy that aligns with their business goals. Based on this, the next step should be to develop a digital roadmap to guide and plan underlying IT projects. If these steps are not taken in advance, large budgets can be wasted on IT projects. If there are no clear project goals, no KPIs can be defined and therefore the success of the project cannot be evaluated afterwards.

Conflict of interest

The results of IT projects influence the daily work and the achievement of unit goals of various company departments. Conflicts of interest are therefore inevitable when planning and prioritizing project requirements. The various stakeholders from these departments are often not consulted or consulted too late, or they cannot agree on a jointly defined and prioritized scope.

Top management in the company is often only informed in detail about the project status in very critical phases, e.g. in the event of major budget overruns, or shortly before the project is completed. They usually have their own needs and implement completely new and previously unplanned reprioritizations. Frustrated project teams and further deadline delays are the result.

Too technical a focus

In most cases, the budget for IT projects also lies with the IT managers, even if the project results have a huge impact on the work of other departments, such as marketing, communication or customer support. As budget owners, they can therefore often have the last word when it comes to defining and prioritizing the project scope. As a rule, they pursue the goal of developing stable, secure and high-performance IT systems and applications and eliminating old system landscapes. What is often neglected is the user-centered approach. IT projects are therefore set up and managed too technically. Afterwards, people wonder why the acceptance of stakeholders and end users falls by the wayside.

Lack of know-how

Technologies are developing so rapidly that even renowned IT service providers cannot keep up with the pace. Software manufacturers are often in direct contact with their end customers and are increasingly pushing the latest versions of their software products through direct sales. Customers are then enthusiastic and want to benefit from the communicated advantages of the latest software versions. However, these newly launched software products are often not tested with sufficient real data and use cases and are therefore very error-prone.

IT service providers, on the other hand, are under enormous pressure to achieve their sales targets and need to book as much chargeability as possible. Early training courses and training for the latest technologies are therefore scheduled with a low priority. As a result, the necessary know-how for the technologies acquired by customers is often not sufficiently available.

Learning by doing under the time pressure of complex IT projects leads to major refactorings and further deadline postponements.

Over staffing

The preparation and creation of project requirements require a lot of time and coordination. However, if these preparations have to be carried out in addition to the daily work routine, the quality of these project coordination processes, which is so crucial, diminishes. Requirements are very vaguely defined or incomplete. Budget and time estimates for the project scope are calculated on this basis. Resource planning is therefore not correctly aligned with the final scope and project budget. This results in over-staffing, which leads to unnecessary complexity and budget overruns.

Saving at the wrong end

Companies need to save money when it comes to spending. This feels great, but can cost them more if they apply this approach to their IT projects. Allocating inadequate and small budgets to your projects leads to the procurement of comparatively less qualified resources.

Initially underfunded projects quickly fall behind schedule, go over budget and often have missing features or quality issues.

Project management

Different interests, complex team structures and a lack of flexibility lead to
poor communication and a lack of transparency throughout the project. This problem can also be linked to a lack of project management. Effective and efficient communication with stakeholders, management and the project team is crucial to the success of a project. It is the responsibility of the project manager to communicate the updated approved requirements and decisions to the team members.

In very complex and dynamic projects, project managers have to constantly manage scope, budget& expectations and are often
expectation management and are often not authorized to make decisions on this basis.

Agility vs. internal organization

If projects are planned based on imprecise requirements with fixed budgets but then implemented in an agile manner, budget and time overruns are inevitable. Agile project teams that are set up within traditional organizational structures are often confronted with severe restrictions in their agile process model. This reduces the performance of the entire project.

Selection of technology

A well thought-out selection of technologies prevents the technical failure of the project. No project manager can save your project if the tools and technologies chosen for the IT project are wrong. It is easy to be swayed by the latest exciting technologies, especially if you are persuaded by the sales teams of those technologies.

As a result, technology selection is not based on the fundamental problem or project goals. Customers are often not given objective advice by the sales teams of software vendors and IT service providers.