The 7 Main Reasons Why Projects Fail

Projects fail. A lot. We would like the think that after thousands of years of building and creating, we might have finally cracked the code to project management. Sadly, this is far from the truth. In fact, research from KPMG shows that 70% of organisations have at least one project failure while 50% of projects failed to consistently achieve what they set out to do. So just why are projects failing? In this blog, we uncover the 7 main reasons why projects fail to help your team have a better shot of success.

1. Inadequate Project Management

Structured project management gives organisations significant visibility and control over their projects to ensure projects are running on time, on budget and within scope. With plentiful research to corroborate the benefits of structured and standardised project management, a report from the Project Management Institute shows that only 58% of organisations fully understand the value of project management and a mere 23% of organisations implement standardised project management practices across the organisation. 

A lack of a standardised and fully formalised project management process leads to critical information gaps, lack of consistency, lack of proper accountability and traceability which all contribute to an overall increase in inefficiencies that threaten project success.

2. Unfit team members

A recent survey from Wellingtone shows that poorly trained project managers are the biggest challenge for organisations. The survey revealed that over half of projects (53%) were being managed by non-professional project managers. Due to the current pandemic conditions, it is no surprise that there is a significant rise in ‘accidental’ project managers – employees that are very quickly brought up to lead projects they may not be trained or qualified for to fill in critical gaps. 

While employees can make great leaders if you train them well, research shows that on-the-job training has been steadily decreasing in recent years and with the already apparent undervaluing of project management itself, many organisations are not providing their project managers with the critical tools, skills and competencies to properly manage successful projects. 

3. Ineffective Leadership

Especially in times of uncertainty and change, strong and effective leadership is vital for project stability and success. With the pandemic throwing many teams and organisations into disarray, many projects quickly go neglected without the proper direction from a competent leader.

 Effective leaders are able to provide much-needed clarity regarding project ownership and responsibilities, make informed decisions quickly and communicate actively with all necessary stakeholders to manage expectations. However, linking to the previous point, many organisations have not invested in training their employees in critical project management skills leading to a critical leadership competency gap. 

4. Unsupported estimations and timelines

While we may have more information and data in our hands than ever before, sadly not everyone is tapping into it properly. One of the biggest benefits of cloud-based and integrative project management solutions like pmo365 is the ability to consolidate your data and make it accessible, understandable and thus useful for an organisation.

Sadly, many organisations have yet to tap into such services and are lacking the full access to necessary data to make fully informed and justified estimations. Unsupported estimations run the risk of producing unrealistic timelines, unachievable objectives and increasing overall project risk that can ultimately lead to project failure. Implementing the right systems and practices to ensure historic data and insight is readily available is a critical 

5. Poorly defined project scope leading to scope creep

Project scope provides a detailed outline of all aspects of a project from activities, resources, timeline, deliverable to key stakeholders, assumptions, constraints and more. Linking with the previous point, without access to the necessary data and information a project will run the risk of expanding its scope beyond its original agreed upon outlines, leading to unexpected and costly impacts to project timeline, costs, resources and more.

The phenomenon is known as scope creep and research from PMI shows that it is surprisingly common, particularly in IT projects. Their survey showed that 52% of projects experienced some form of scope creep which is cited as one of the key reasons for project failure. Some common causes for scope creep include:

  • Lack of formalised and agreed-upon scope definition process
  • Overly vague or open-ended requirements 
  • Outlined requirements are not fully aligned with the project’s overall objectives
  • Inadequate change control throughout the project development and execution stages

6. Outdated technology and tools

Outdated technology is a significant contributor to some of the aforementioned reasons for project failure above. Old and inflexible technology is struggling to keep up with the increasing complexity and demand of modern projects. Projects are increasingly being led by globally-dispersed teams that need to be collaborating and updated in real-time to keep up with the competitive and fast-paced market. Outdated technology and tools run the risk of reducing overall project productivity as well as increasing security gaps and compliance risks. 

Even with the many intuitive and powerful tools readily available on the market, research shows that 44% of people do not use project management or task management software, while only 23% of organisations use portfolio project management software. Making sure that your teams are able to collaborate, coordinate and manage their projects seamlessly with the proper tools is vital to long-term consistent project success.

7. Selecting the wrong projects

Finally, one of the biggest factors that impact project failure starts from the very beginning. When organisations and key decision-makers lack the capability to access data and have complete visibility over their portfolio, it becomes hard to truly capture the true value of projects and ensure they are aligned with business objectives to achieve the most value. What ends up happening is that projects are selected based on incomplete data, rough guestimations or even fall victim to personal biases that can lead to costly wasted opportunities.

All too often, organisations focus on maximizing their resources by increasing the number of their projects rather than optimising their projects and achieving value. For example, there is no point in having ten successful projects if none of them addressed the key objectives of the organisation. Selecting the right projects for your organisation starts by ensuring key decision-makers have access to relevant data, applying robust selection criteria that emphasize business value and having realistic estimations on project cost, timeline, resources and more.

Additional reading: Project benefit vs Project Value

Achieve project success with pmo365

Now that you know some of the key reasons why projects fail, pmo365 is ready to guide you on your next steps to achieving project success! As we have mentioned before, having effective PPM software is vital and pmo365 is your one-stop-shop solution to achieving project success.

Our powerful cloud-based solution consolidates all your project-related activities onto a single platform so you gain complete visibility and control over your entire portfolio of projects. We take it to the next level by taping into Microsoft’s Power Platform to give you advanced level analytics, insights, automation, integration and so much more.

If you want to have a deeper look at how pmo365 can help you achieve project support, check out our how it works page or see it all in action with a free demo trial

You may also like

Raid logs are an essential part of project management.
Bill Allars

Using RAID Logs for Project Reviews

RAID Logs are an effective risk management tool, used extensively by project managers to inform and structure project meetings. Inadequate

Get a Free Demo of pmo365