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 due to a lack of communication. When a project takes place on a global scale, 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 problem concerning supplier payment can lead to shipping delays if not handled correctly. If communication isn't smooth and clear, there can be major financial consequences.
It's also important to remember that frequent communication with employees about their performance can help them work more effectively. Indeed, good feedback on their achievements leads to greater commitment 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.
Lack of organizational flexibility
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: shift, cancel, re-allocate to other collaborators with ease.
Case #2 - Billing flexibility
Do you have different types of fixed-price, time-based 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 packages that don't communicate with each other?
Put an end to double-entry and errors: Stafiz integrates with numerous tools and offers a complete API library.
Insufficient management direction
Three quarters of projects fail because of a lack of involvement from senior management. Because senior managers play an important role as project sponsors, they should support project managers and give their final say on certain important decisions.
Senior managers brief project managers on objectives and overall strategy. A survey by Project Smart UK asked 1,000 project managers whether roles, responsibilities and levels of authority were clear in the projects they were working on. 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 easier to manage than macro-projects, since the failure rate for projects with budgets over $1 million is 50% higher than for projects with budgets under $350,000. Each project is unique and has its own uncertainties in terms of risk. In any case, it's always best to quantify the risk.
When planning a financial budget, always allow for a percentage of risk and cost overruns that could create tensions with sponsors or customers. Always prepare project managers with a guide on how to respond to specific project risks. You also need the right tools to track project progress and financial performance against budget.
Tools such as project management software provide this long-term visibility and alert you when a project goes off budget.
Visualize the performance of your projects in forecasts
Variance analysis: compare planned activity with actual and scheduled activity. Visualize the financial impact 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 halfway through a project, organizations may miss a few warning signs, such as problems with money coming in and going out, delays in deadlines, or budget overruns. Busy managers don't have the time to follow all the warning signs.
The only way to solve this is to use project management software that provides the level of automation you need to follow the warning signs. Stafiz project management ERP software provides 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 losing time.
Discover project management with Stafiz
Underestimating costs
This situation arises when objectives are not achieved as planned, and the project manager loses track of his or her priorities. Project progress can be affected when one team has to wait for another to complete its tasks before it can begin its own.
This leads to delays, and it also happens when the organization focuses too much on the profit margin and tries to cut costs in the belief that it can deliver with fewer expenses and resources. These are the reasons why one project in six has a cost overrun of 200% on average, and a schedule overrun of almost 70%.
How to avoid project failure?
As a project becomes more complex, managers realize how difficult it is to analyze certain data. You need to go beyond what Excel spreadsheets and other basic tools can offer to plan, execute and monitor other project management processes.
It's much better to work with tools that bring together graphical representations such as Gantt, time tracking, planning and budgeting. This is possible with Stafiz.
One of the main reasons for project 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 are not using the right tool to work with their team.
Stafiz helps service companies gain visibility, optimize teams and boost profitability.
- Be alerted when deviation happens
- Anticipate your business
- Understand your data
- Stay flexible
