Top 10 Causes of Project Failure
"Life is 10% what happens to you and 90% how you react to it ", Charles R. Swindol once said. This observation applies as well to project management, where 10% of the time is spent on the execution of the project itself. The remaining 90% is spent planning the project and resolving problems encountered during production.
No matter which industry you operate in, projects are useful for companies so they can test their ideas, meet customer needs and solve problems. Let's take a look at the various management issues that prevent your projects from finding success. This introspective approach helps you to take a step back from the way you organize projects, and understand how you can achieve higher performance through good practice.
The project drifts away from the objectives
In project management, we talk about drift-changes. But before we can even talk about it, we need to make sure that objectives have been set. Without this step, the project will not progress properly.
Project managers and organizations need to focus on 3 key characteristics: schedule, budget and quality. These characteristics must have a numerical value in order toanalyze project performance. Projects can only succeed if stakeholders understand the value they can obtain in exchange for their contribution. Still, only 58% of organizations fully understand the value of their project.
It is therefore imperative to draw up a forcasted project budget. Without an accurate representation of the benefits projects could generate, companies can lose a lot of revenue, and employee satisfaction declines, ultimately leading to disengagement from the project. One of the first mistakes happens during the planning phase: companies often focus on their profit margin rather than on how to deliver value to their customers.
Make sure your objectives are aligned with your company's strategy, so that you can prioritize your projects. Those that are most closely aligned with the overall strategy take priority. Finally, take customer satisfaction into account first.
A lack of visibility resource capacity
Not having a clear project visibility is a real problem. The view of your resources' availability, their workload or even the progress of their tasks is affected, and can seriously slow down the whole process.
The visibility offered by a project management software on resource planning resources is essential. By integrating information related to their skills or experience, you can assign your employees to the various project tasks where they will be most effective. You also benefit from a clearer view of each individual's performance, which is an essential aspect of project management. Your resources drive the project forward.
A resource planning tool such as Stafiz enables you to see your staff's skills so that they can be assigned efficiently, but also to have a vision of the future margin generated by progress and sales; as well as tracking utilization rate for better performance. Moreover, an automated resource planning tool guarantees even more appropriate resource management to meet customer demand.
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A lack of communication
According to Bull Horn research, 57% of projects fail because of a lack of communication. When a project takes place on a global level, the lack of communication between project managers and other stakeholders located around the world can affect overall performance and lead to delays.
For example, a communication issue regarding supplier payment can cause shipping delays if not handled correctly. If communication is not smooth and clear, there can be big financial consequences.
It is also important to remember that frequent communication to employees about their performance can help them work more efficiently. Indeed, good feedback on their accomplishments leads to better engagement on their part.
For better communication, a resource planning tool or project management software can improve communication between team members, managers and stakeholders. The aim is to provide everyone with the right information in the right place at the right time, and to enable everyone to stay updated on the project progress, obstacles and suggestions.
A lack of flexibility in the organization
Nowadays, working together is becoming more complex. Teams work remotely, and many companies still don't have access to the digital tools they need to coordinate their tasks and schedules. As mentioned earlier, this is again linked to a lack of communication or visibility on the project. But it also refers to employees' inability to adapt to changes, to different time zones if they are in contact with other countries, or to different ways of working.
Keeping methods that are too static and old-fashioned can no longer work in a world where adapting to change is mandatory to remain successful. Whether in terms of leadership or team organization, it's important to keep in mind that flexibility is the key to keep inovating.
Case #1 – Flexibility in the resource planning
Are schedule adjustment done by email or chat time-consuming?
Reshuffle your schedules easily: postpone, cancel, reallocate to other employees easily.
Case #2 – Flexibility in invoicing
Do you have different types of fixed-price, time-spent or subscription-based projects?
Manage and automate these different types of invoicing directly in Stafiz.
Case #3 – Flexibility in the use of tools
Do your teams use various project management software that doesn't communicate with each other?
Stop double entry and errors, Stafiz integrates with many tools and presents a complete API library.
Insufficient leadership from the leaders
Three-quarters of projects fail because of a lack of senior management involvement . Because senior managers play an important role as project sponsors, they should support project managers and give their final opinion on some important decisions.
Senior managers brief the project manager on the objectives and on the overall strategy. A study by Project Smart UK surveyed 1000 project managers to ask them whether roles, responsibilities and levels of authority were clear in the projects they work in. Here are their answers:
- Strongly agree: 2.8%
- Agree: 34.3%
- Disagree: 51%
- Strongly oppose: 9.7%
- Don't know: 2.3%
Almost 63% of the surveyed did not know their role or had not received specific instructions from their superiors.
A poor risk management
Micro projects are simpler to manage than macro projects because the failure rate of projects with a budget of more than $1 million is 50% higher than that of projects with a budget of less than $350,000. Each project is unique and has its own uncertainties in terms of risk. In any case, it is always better to quantify the risk.
When planning a financial budget, you should always plan for a percentage of risk and cost overruns that could create tension with sponsors or customers. Always prepare project managers by providing them with a guide on how to respond to specific project risks. It is also necessary to equip yourself with the right tools to monitor the progress of the project and the financial performance compared to that of the budget.
Tools like project management software provide this long-term visibility and alert you when a project deviates from budget.
Visualize the performance of your projects in forecasting
Variance analysis : Compare the planned activity with the one that has been completed and scheduled. Visualize the financial impacts of your scenarios (resource planning, purchases etc.) and be alerted.
A lack of team coordination
Not planning the project as a team with the project manager and with management inevitably leads to failure. When the three levels of management don't have access to up-to-date information in real time, that's when you're heading for failure.
These sessions should be held regularly within organizations to discuss issues and review performance metrics and progress. It is also an opportunity to share visibility on the performance of individual tasks.
What's more, bringing team members together makes it easier to brainstorm ideas to reach a consensus. This has a major impact on project performance.
An underqualified leadership
Many problems arise during project management, and solutions don't just appear. To solve these issues, organizations need effective project managers, dedicated to guiding the project in the right direction. 80% of "high-performance" projects are led by a certified project manager. That's why choosing the right person to lead the project, someone with the necessary skills, will reduce the risk of failure.
One of the recurring reasons for project failure is that the project manager does not have the experience and technical training to manage certain tools. Some also lack the social skills to manage a project as a whole and globally.
Another problem could simply be a lack of management involvement. To guarantee the success of a project, they need to be present and listen. They need to give their team and customers the information they need to move forward and solve any problems that arise. Being a good leader requires a lot of skills, but also many soft skills such as communication, conflict resolution and organization.
An irregular follow-up
Once they are halfway through the project, organizations may miss a few signs such as problems with money coming in and out, delays on schedule, or going over budget. Busy managers don't have time to follow all the red flags.
The only way to solve this is to use project management software that provides the level of automation needed to follow up on red flags. Stafiz software, ERP for project management, offers this total automation for your project management.
You can track progress, budget adjustments, and time spent on each activity. This software helps managers work on other aspects of the project without wasting time.
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Underestimating costs
This situation occurs when objectives are not achieved as planned and the project manager is no longer able to find his or her way around the order of priorities. Project progress can be affected when one team needs to reach out for another team to complete their tasks in order to begin theirs.
This leads to delay, and it also happens when the organization focuses too much on the profit margin and tries to cut costs by thinking that they can deliver with fewer expenses and resources. These are the reasons why one in six projects has a cost overrun of 200% on average and a schedule overrun of almost 70%.
How to avoid project failure?
When a project becomes more complex, the manager realizes the difficulties in analyzing certain data. You need to go further than Excel spreadsheets and other basic tools can offer to plan, execute, and track other project management processes.
It's much better to work with tools that are combined into one graphical representation like the Gantt, time tracking, schedule, and budget. This is possible with Stafiz.
One of the main reasons for a project's success is that 77% of high-performing projects and managers use the right project management software. There is a high risk of failure when 44% of project managers do not use an appropriate tool to work with their team.
Stafiz helps service companies gain visibility, optimize teams, and boost profitability.
- Be alerted when deviation happens
- Anticipate your activity
- Understand your data
- Stay flexible
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