Project Management
Unit 10: Why Projects Fail
Table of Contents
1. Why Projects Fail
Introduction to the Unit
In this unit, we will understand why some Projects Fail.
We will focus on understanding the most common reasons for project failure, the specific warning
signs of an impending project failure and the possible strategies to bring the project back to course
well within time.
Objectives
Upon completion of this unit, you will be able to:
Explain why projects fail
Identify the warning signs of an impending project failure
Identify the strategies for preventing project failure
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Project Management
Why Projects Fail
Table of Contents
1. Introduction
2. Why Projects Fail
3. The Warning Signs
4. Summary
Objectives
Upon completion of this segment, you will be able to:
Explain why projects fail
Identify the warning signs of an impending project failure
Identify the strategies for preventing project failure
Introduction
In the last segment, we learned about the importance of the role of a Project Manager and the
characteristics essential for this role. In this segment, we will try to understand why projects fail.
‘Even the best laid plans often fail’. There is much truth in this old adage—more so when it comes to
project management.
Projects are initiated after a thorough analysis and the Project Manager takes over with immense
zeal to plan and execute the project successfully. If this were to come through as planned, it would
an ideal scenario.
However, many surveys done across various industries claim that the percentage of failure of
projects is anywhere from 37% to 70%. Most of these surveys have been done on projects involving
technology.
The 37% failure looks like a good number but it is tough to substantiate by comparing the way
studies are done. The range reaching 70%, however, is alarming.
The foremost reasons for having troubled projects in that worrisome range are:
Requirements: unclear, changing, ambiguous and contradictory requirements
Resources: lack of skills, conflict and poor planning of resources
Schedules: unrealistic, unreasonably tight and overly optimistic schedules
Planning: poor and unclear planning, done on insufficient or missing data
Risks: unidentified or unmanaged
Communication: lack of proper and timely communication
Some additional causes of project failure may include:
budgeting too little time
too little money
inadequate planning
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Project Management
constantly-changing goals
lack of project knowledge
insufficient knowledge of the technology used,
communications issues
poor management of risks and issues, and
poor stakeholder management.
Further, in these situations, the management is usually the last to know about any problem. Often
the only difference between a project's complete failure and its success lies in spotting some
specific warning signs. These signs allow us to notice the problem upfront and to recognise the real,
measurable risk information we can get from historical data and from the time perspective.
The Warning Signs
There are four important warning signs that allow us to mitigate the risk of failure.
Warning sign 1
The first warning sign is employees working overtime. If a project is running smoothly, there usually
is little to no need to work overtime.
Warning sign 2
The second warning sign is people being pulled off the project to work on another project. As time
spent on other projects is cumulative, this factor could indicate a potential problem. This generally
happens in functionally structured organisations where resources are shared across multiple
projects.
Warning sign 3
The third warning sign is milestones not being met. If official milestones are not met, it indicates that
the project may be in trouble.
Warning sign 4
The fourth warning sign is changes in the project scope. While this factor may not necessarily be
‘bad,’ it is a sign that the project could be in trouble.
Warning sign 5
The fifth warning sign is a growing ‘Issue log’. This indicates the presence of too many issues which
are not closed. It also shows that issues are piling up and there is little time to resolve them.
Besides these five warning signs, there are also some more intangible signs, which indicate that a
project may be in trouble. These signs include a general lack of interest in the project, poor
communication among workers, a fear of talking about project problems and a general lack of
progress in the project.
That aside, there is a way to measure a project's success while it is in progress. This can be done
by measuring certain metrics within a project. Measuring metrics is even more important today as
an organisation's infrastructure and business applications continue to evolve and increase.
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Project Management
Further, in today's economy, it is more vital than ever to minimise costs and maximise project
quality.
Therefore, in a rapidly changing globalised economy where the demands on a project keep
increasing, it becomes more and more important for a Project Manager to keep an eye open for the
warning signs that a project may be in danger and take corrective action to address the issues and
salvage the project in time.
Summary
In this segment, you learned that:
the failure rate among projects, mostly involving technology, is 37% to 70%;
most project fail due to improper management of requirements, resources, schedules,
planning, risks and communication; and
the failure rate in projects can be brought down by looking out for some key warning signs.
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