Top 5 reasons for project failure and how to fix themAkanksha SrivastavaLast Updated: September 30, 2022
Successful projects in business increase the odds of continuous growth. Completing a project on time and within budget is essential to keep your customers satisfied and is likely to open doors to new opportunities for your business. However, the success rates of projects have readily declined over the years.
Only 2.5% of the companies complete 100% of their projects successfully.
Most project managers experience project failure, and it’s often unavoidable. Of course, 100% of the projects cannot be a success, but steps should be taken to understand project success and failure factors and reduce the number of projects that fail.
What causes project failure?
Have you ever wondered why do projects fail?
Several factors could go wrong during the execution of a project, but here are the 5 reasons for project failure that top the list.
Undefined project scope and objectives
Before starting any project, a set of objectives or deliverables are agreed upon by both parties. Now, during the course of the project, there might be findings that open new opportunities. So, your customer extends the scope of the project or demands extra service. That’s how your project scope stretches beyond the original project plan.
To avoid such a situation, there should be a system that restricts parameters set for each project so that undue pressure does not fall upon the employees or the service provider to meet new expectations.
Lack of team communication, collaboration, and coordination
Effective communication and coordination within a project team play a primary role in driving any project because most issues arise when the team members don’t know how and when to provide an update to the stakeholders. It becomes hard to keep everyone on the same page.
86% of the team leads believe that lack of collaboration is the main reason for failures in a workplace.
With so many different communications apps, people tend to miss out on notifications which could lead to missing out on deadlines. To overcome this situation, a common collaborative platform should be established where all updates, communication plans, and data are shared. It will keep all essential information in one place and minimize discoordination.
Inefficient resource planning
Most organizations face financial loss due to unforeseen investments that projects might require. They fail to comprehend it before building a budget for it.
According to project failure statistics, for every 1 billion USD invested in projects, organizations lose 109 million USD.
So, in addition to planning a timeline for a project, it is of utmost importance that project managers plan for the inventory and resources as well. Some of the resources that you must plan for include:
- Human resources required for the project
- Raw materials
- Equipment like electronics
- Outsourcing costs
- Training needs of the employees
Ineffective risk assessment and management
In a project, not everything will go according to plan. And it happens more often than not, which leads to project failure.
Risk assessment becomes crucial in delivering a successful project. It depends on your ability to analyze and predict potential issues that might occur during a project. It is vital to have an alternate course of action plan and also; the budget for it.
Sometimes it’s also important to visualize the value your product will hold, given the ever-changing dynamics of the market. Let’s look at one of the popular project failure examples to understand this.
Ford launched a car in 1957, Edsel, which turned out to be a historic failure.
When they started working on the project, they conducted rigorous research and development and established dedicated production facilities, which slowed down the project significantly. So, when Edsel was finally launched, the market had increased demand for tiny cars, which it was not. The project failed, and the company faced huge losses due to inefficient risk assessments and planning.
Inconsistent follow-up practices
Whether it is communication with the customer or the completion of in-house tasks, consistent follow-up is a must. It ensures that everything is on time and within budget, resources are being efficiently utilized, and highlights the issues, if any, before it leads to any delay or significant issues.
How can project management software help?
Such software offers an all-in-one solution to manage all aspects of a project. Here is how it can avoid project failure.
The project management software market is expected to grow at a CAGR of 10.67% from 2021 to 2026.
1. Seamless integration into the workflow
Most project management software are AI-powered that requires the least manual input. They seamlessly integrate into the system and establish a solid foundation for the successful completion of a project. It helps you to accurately estimate the cost and define the scope and timeline of the project, and ensure that the various stakeholders are onboard as well.
77% of successful projects are driven by project management software.
2. Effortless task management and work delegation
Project planning, work delegation, and consistent follow-up have never been this easy.
Modern project management software integrates your favorite tools that simultaneously manage several tasks. It also allows you to create a work checklist for each employee and set priorities.
You can plan days, weeks, and months for you and your team without the fear of missing a deadline. Scheduled alerts are also possible, which you can set to remind yourself of crucial events during a project. You may also tag specific tasks and categorize them based on their urgency or the teams working on them.
3. Effective risk mitigation
A project management platform identifies resource bottlenecks before it affects the project timeline. Using this information, you can effectively manage project resources and deploy effective counteractions without overburdening the team with work. It will encourage a positive and healthy work environment.
4. Improved intra- and inter-team collaborations
Project management software allows you to capture conversations. These are searchable files that can be shared among teammates. This way, there is no time lag when a piece of information is required.
Teammates can tag these files to a task or overall project depending upon which team will need them. Employees can also directly message each other while being on the same platform. It saves a lot of time and drives work exponentially.
5. Real-time project tracking
Project management is all about staying on top of every task, every step of the way. Using a project management tool, you can monitor and control all changes happening in the project. Everything is compiled regularly in the form of updates so that you don’t miss out on anything important.
Get in touch with the experts
Are you tired of project failures? It’s time to work smarter. Get on board with our powerful project management software, Flow, and stay ahead of the competition.
Flow offers a cross-team project management tool that lets you see your and your team’s tasks at a glance. You can use drag and drop functionality to assign tasks among teammates, which cannot get simpler.
Leverage our collaborative tool and experience digital transformation because project management has never been this easy.
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