There are many reasons why software projects fail. With any software development process, there can be challenges, especially with complex projects, large development teams with poor communication, and a lack of detail in the requirements gathering, all leading to a software project failing.
What percentage of software projects fail? The statistics on failed software projects are staggering. Studies show a shocking 70% of digital transformation projects fail (Sources: Boston Consulting Group and McKinsey).
Conducted by Info-Tech Research Group, shows that 70% of those failures are due to issues with requirements. If we take these two statistics together, we can infer that 49% of digital transformation projects will fail due to requirements. That’s almost half!
We have a requirements gathering tool to avoid software failure. By harnessing AI and efficient prompts we bypass common pitfalls.
Why software development projects fail?
Software projects fail in our experience, due to requirements gathering, and as a software development company with over 200 digital transformation projects, we have a strong opinion on the matter. Requirement gathering, or lack of it, is very often the main reason why software projects fail when projects are implemented.
Software Failure Analogy: Gathering requirements in software development is analogous to a business analyst sculpting a detailed business plan. Similar to how a business plan outlines objectives, target audience, and strategies, requirements delineate the software’s purpose, user needs, and functionalities. The business analyst, like a strategic planner, collaborates with stakeholders to define key elements, ensuring alignment with organizational goals. As a well-crafted business plan guides a company, comprehensive requirements guide developers in creating a tailored solution. Clear communication and adaptability, integral in both roles, enable seamless translation of business objectives into functional software, fostering a successful synergy between business strategy and technical implementation.
Software project failure statistics: According to developers worldwide the reason software projects fail is due to “changing or poorly documented requirements”. 
Help Us Shape the Future and Reduce Software Development Projects From Failing
Examples of Software Development Failures (Case Studies)
Here are 4 failed software projects case studies with examples:
- Healthcare: Interesting project failure example highlighting Mercy Hospital
- Finance: Failed software project of how TSB BANK locked out clients
- Various Sectors: List of IT projects that failed that are famous
- Redrocks: List of failed software projects that are high-profile
Key Aspects of a Software Project Success
1. The Importance of Planning in Software Development Projects
Software projects are complex endeavors, requiring meticulous planning to succeed. Poor planning can lead to scope creep, budget overruns, and timeline delays, ultimately resulting in project failure. Project managers, along with the development team, must collaborate to create a comprehensive project plan that sets the project on the path to success. Effective planning ensures that the project’s objectives align with the company’s broader goals, promoting a successful outcome.
2. The Critical Role of Communication
Clear and transparent communication is the lifeblood of any software development project. Inadequate communication can lead to misunderstandings and breakdowns within the team, causing project failure. Establishing effective communication channels is paramount to ensure that all stakeholders, including the project team and end users, are on the same page. Regular updates, feedback mechanisms, and collaborative tools can facilitate communication, helping to address issues promptly and maintain project progress.
3. Controlling Scope Creep
Scope creep is one of the most common reasons behind software project failures. When project scope continually expands without proper management, it leads to budget overruns and timeline delays. To mitigate this issue, project managers must diligently manage and control changes in project scope. This includes assessing the impact of changes, prioritizing requirements, and ensuring that they align with the project’s goals and objectives.
4. Software Projects Fail due to Unclear Requirements
Unclear or incomplete requirements pose a significant threat to software development projects. They can lead to misinterpretation, confusion among team members, and a failure to deliver the expected result. To address this challenge, it is essential to gather and document all requirements meticulously. Employing best practices, such as creating detailed use cases, wireframes, and prototypes, can help ensure a thorough understanding of project needs and expectations. A well-structured requirements gathering process is the foundation for a successful project.
5. The Role of User Involvement
Active user involvement is a cornerstone of project success in software development. Engaging end users throughout the development process ensures that the final product aligns with their needs and expectations. By involving end users in requirements elicitation, user testing, and feedback sessions, software projects can adapt to evolving user needs and preferences. This iterative approach fosters a sense of ownership among users, enhancing their satisfaction with the final product.
6. Choosing the Right Technology Stack
Selecting the appropriate technology stack is a crucial decision for any software project. Inexperienced developers or a technology stack that does not align with project requirements can lead to project failure. Experienced developers play a vital role in this aspect, as they can help identify the technology stack that best suits the project’s goals. Careful consideration of factors such as scalability, compatibility, and maintenance requirements is essential in making informed technology choices.
7. Aligning with Business Requirements
Understanding and aligning with the business requirements are paramount for the success of software projects. Failure to grasp the bigger picture and the company’s objectives can lead to a project that does not serve the organization’s strategic goals. Clear communication between the development team and business stakeholders is critical to ensure that the project’s scope and objectives align with the company’s broader vision.
8. Team Collaboration and Coordination
Effective collaboration and coordination within the project team are key determinants of project success. Each team member should be assigned tasks that align with their skills and expertise. A skilled project manager plays a pivotal role in ensuring that the team functions cohesively. Team dynamics, regular status updates, and well-defined roles and responsibilities are essential to maintain project progress.
9. Adhering to a Robust Development Process
Following a robust development process is essential for project success. Best practices, adherence to industry standards, and a focus on delivering the highest quality are critical factors. Defining and following a clear development methodology, such as Agile or Waterfall, helps maintain consistency and predictability in the project. Thorough testing, quality assurance, and continuous improvement throughout the development lifecycle are integral components of a successful project.
10. Prioritizing End User Involvement
End users have a crucial role in shaping the direction of a software project and ensuring that it meets their needs and expectations. Regular feedback, user testing, and collaboration with end users can lead to a finished product of the highest quality. Engaging end users throughout the development process fosters a sense of ownership and satisfaction with the final product.
Why almost half of software development projects fail
(Ab) use of agile methodology
Agile methodologies are great. They can be used to speed up the development of projects and potentially get things delivered quickly. However, we have seen a worrying trend where people, with restrained budgets and timescales, use Agile Methodologies to avoid any upfront requirements capture and as a final software solution.
The story goes that we don’t need to define upfront requirements as “it’s agile”. Some companies can handle a very low requirements approach such as a small start-up team with a strong vision of the product they are developing. However, for companies who do work on clients’ behalf or internal IT departments who need to fulfill the needs of internal stakeholders, we would highly recommend some detailed requirements capture. Companies usually need to budget for projects and estimate timescales so a lack of upfront requirements can mean no clear budget or timescale for the project.
Overruns in budget are a common reason for project failure as the company runs out of money for the project.
Missing requirements are the main reasons software projects fail
Gathering a complete set of requirements for a project is difficult. We are only human and stakeholders and the implementation team can miss things. Failure to properly gather requirements means some requirements are missed, creating two problems: –
- The project can take longer to deliver than expected
- Costs can increase beyond those budgeted
Missing requirements are generally discovered during project implementation. As projects run people begin to notice things that have been missed. This can cause unplanned tasks and in the worst cases missing requirements, once discovered, can interfere with documented requirements causing rework. According to a study by Info-Tech Research Group 50% of re-work was as a direct result of requirements issues. That’s a lot of wasted money and effort.
You can never guarantee that you will not miss requirements but a structured process and structured questions can help to reveal areas of the project requirements that may be otherwise forgotten. Where appropriate we find that showing stakeholders wireframes or prototypes of proposed systems helps to focus the stakeholder on what will be delivered.
Lack of detail in requirements
Related somewhat to missing requirements, a lack of detail in requirements can cause problems. Whilst this may be considered similar to missing requirements there can sometimes be a complacency that all the requirements have been captured and agreed with the business stakeholders yet due to a lack of detail or clarity the estimate and timescales for the project can be breached because of the extra work involved.
Whilst we would not consider this as bad as missing requirements, the lack of detail can suddenly start adding effort to each part of the system. For example, if the need to store and list a client was detailed only at a high level then the details such as requiring a photo and video of the client or having some sort of credit check done on the client might add additional effort and cost not anticipated when timescales and budgets were set.
In the example above if your project does require a client to be modelled then noting the data stored against the client (e.g. photo) and actions performed on the client (e.g. credit check) will help tie down requirements at a better level of detail than just specifying that the system will have clients.
Not enough attention paid to non-functional requirements
Not paying enough attention to non-functional requirements can trip up a project implementation. For example, what are accessibility requirements, security requirements, reliability, and performance requirements? What browser versions are you targeting for a website or what platform are you targeting for a mobile application? We know of one company who outsourced a company web application which was delivered successfully. Unfortunately, no one told the outsourcing company that the client’s standard technology was React and the web app was delivered and written in Angular. The client could not support the application so they ended up having to get the application rewritten at their cost.
Non-functional requirements are a common area where inexperienced business analysts and stakeholders can fail to specify important areas of the system. Again, this can affect budgets and timescales.
Ensuring that structured questions are asked in relation to non-functional requirements can really help stakeholders and the implementation team think about these areas of the system and start to specify these areas.
To us, it is clear, and studies back this up, that the requirements gathering process causes many of the issues associated with failed projects.
Where to outsource software development to avoid failure?
With our industry experience and talented software developers and years of helping a range of clients on many software projects we have grown weary of hearing about projects fail. Poor requirements are at the root of software failure and project fails. We believe the industry needs more process and structure in requirements gathering and, as a result, we have developed Requiment. Our product helps you through a set of guided questions and serves as your virtual business analyst or, at least , a business analysis assistant. This is the best place to start when considering to develop a new software project.
Conclusion
Software development projects are the backbone of the tech industry, and their success or failure can significantly impact a company’s fortunes. To avoid project failure, addressing issues related to poor planning, communication breakdowns, scope creep, unclear requirements, lack of user involvement, technology stack choices, alignment with business requirements, team collaboration, and adherence to a robust development process is essential. By implementing best practices and fostering a collaborative environment, software development projects can achieve the expected results and deliver value to the end users, contributing to overall project success and business growth.