Why IT Projects Fail (and how to prevent it)

Why IT Projects Fail
According to surveys, IT projects fail 50-80% of the time. When I first read these statistics I doubted their accuracy since I thought I had a pretty good record delivering IT services and solutions to the business. But if we define project success as delivering on time, on budget, and delivering expected value, then perhaps the stats are accurate. Even on smaller infrastructure projects there are always the gotchas that drive budget or project timelines from the original estimate. The more complex the project, the more likely it is that one or more of these project success measurements fail. When is the last time you heard of an ERP project coming in on budget, on time, and delivering on all of it’s promises?
Here is a list of some of the most common reasons why IT projects fail:
  1. Not understanding the requirements
  2. Choosing the wrong solution, or the wrong vendor to implement the solution
  3. Underestimating the level of effort, resulting in budget or time over-runs
  4. Lack of organizational change management
  5. Poor project management
I am sure there are other contributors to project failure, but the top 3 are the ones that seem to contribute the most to project failures – and they are all tied together. If you don’t have the proper level of understanding of the requirements, then it can lead to choosing the wrong solution, budget and timeline over-runs, and not delivering on business value. Choosing the wrong solution, or a vendor who can’t deliver the solution effectively, also leads to project failure.

Not Understanding the Requirements

This usually happens due to not spending enough time planning and really understanding the problem you are trying to solve. This is probably less common for IT sponsored projects than it is for business projects. There always seems to be some level of disconnect between the business and IT. Usually it is just a knowledge gap. IT personnel or business analysts try to document the business process, but things are missed because they don’t have an in depth knowledge of that business process or operation, and business leaders are not thinking about the ways the process or technology is linked to systems and downstream processes.

Ways to minimize this risk:

  1. Look for requirements that were used in similar projects for other companies. Use peer groups, industry experts, or other tools.
  2. Build up a BA competency over time to really understand the business unit’s processes, requirements, and systems. Process map and diagram the process.
  3. Keep asking “why” and “how” and drilling in with business leaders, understand reporting and other requirements needed to run the business.
Choosing the Wrong Solution or Vendor
Choosing the wrong solution is the result of either not understanding the requirements or not understanding the solution’s capabilities. Have a crystal clear understanding of what you are trying to accomplish and what the underlying business and technical requirements are is the key to successful project outcomes. Finding a solution provider who understands your business and vertical domain is also important for anything but the most basic of Infrastructure projects.
Ways to minimize this risk:
  1. Find other companies that are like yours who are using the solution…and talk to them. What gaps or disappointments did they have? What do they think are the strengths of either the solution or the implementation partner?
  2. Find data on strengths and weaknesses of the vendor or solution by using research companies, peer groups, and other resources.
  3. Don’t rely on the vendor’s sales or consulting/engineering team to assess product fit. You cannot delegate this responsibility and they do not have your best interest in mind. 
Underestimating the Level of Work
This is usually the result of failures in one of the first 2 areas we discussed. The other culprit is not taking into account other software, hardware, or services needed to make the solution fully functional. Will it need to be integrated with other systems or will it drive upgrades for underlying technologies to have a fully functioning solution?
Ways to minimize this risk:
  1.  Understand the complete business and technical landscape. What other systems will it touch that could lead to hidden costs? Do you have all the licenses and modules accounted for? Are there any integrations or other activities that need to happen to fully deploy the solution?
  2. Research what other companies have done to implement this solution and how much it cost them to implement.
  3. Count on every project going over the anticipated cost and budget a cushion of 10-25%, depending on the project and how many unknowns there are.
The Power of Assessments – An Ounce of Prevention
One of the best ways to make sure that your project outcomes are successful is to do a paid assessment to uncover and document requirements. This is cheap insurance to figure out what is truly needed for a project and you can use the deliverable to produce a Request For Proposal (RFP) or Request For Quote (RFQ) that you can then send out to bid to 2 or 3 vendors. Don’t use this process just to pick the lowest bidder, but understand that premium providers will charge a premium price and should deliver a better than average result. All solution providers are not created equal and it is your job to figure out who can deliver and who can’t.

If delivering IT projects were easy, they would always come in on time, on budget, and deliver expected value. We know that it is rare when this happens and is the exception and not the norm. The difference in most cases is information. Information on requirements, solutions, and vendors that is often hard, if not impossible to get. Join peer groups and create a network of people and companies that can help you deliver exceptional results on a consistent basis.

And finally, don’t forget about the power of assessments as a precursor to projects in order to estimate costs and document requirements. This is cheap insurance to uncover unknowns and leverage the experience of other professionals. Use this information to create an RFQ or RFP with the goal of giving vendors better information to produce a better cost estimate, and to highlight the differentiation between solutions and solution providers.

10 Reasons to become a Section1 Partner


Section1 is an opportunity engine for Solution Providers, Service Providers, and Software Development Companies!

      1. You would like opportunities to come to you instead of burning sales cycles on prospecting.
      2. You would like to demonstrate your value proposition verses having to compete on price alone.
      3. You would like to have clear, documented, customer requirements from the beginning of the engagement.
      4. You would like to do business with companies that might not respond to other marketing initiatives.
      5. You like FREE company exposure! Let’s face it, who doesn’t like free?
      6. You would like to participate in shaping the future of how IT projects get done (Hint: Rand McNally wasn’t looking for a phone to put them out of the map business, and taxi drivers are still in denial about Uber and Lyft. Don’t be a map company)
      7. You like automated sales processes.
      8. You like walking on the wild side of technology.
      9. You want to grow your business.
        Drum roll please…
      10. Section1 costs nothing to join! Enjoy a significant early adopter advantage since competition is limited.


Contact operations@section-1.com for more information on becoming a Section1 partner, or sign up HERE.

Simplify IT!

Section1 Simplify IT

We believe that it is time to put the “Information” back into Information Technology. Businesses of all sizes waste too much time, effort, and money on IT projects that never come to fruition. Too many companies miss financial targets. Too many organizations aren’t able to execute upon critical market opportunities. Too many IT careers have been derailed.

Most IT projects fail because of one or more of the following issues:
• Lack of business analysis and requirements
• Poor project management and governance
• Improper fit of solution or vendor
• Lack of Organizational Change Management
• Poor project sponsorship

All of these points of failure can be managed in order to reduce risk and uncertainty with IT projects. Even better – a platform can be developed with the goal of sharing information and reducing risk by managing the reasons why projects fail.

Section1 is on a mission to reduce risk and demystify IT. We are transfering power back to IT leaders by providing them information on products, projects, vendors, and requirements that they cannot get anywhere else. We have developed a data analysis engine that gets smarter with every project. We are changing an industry by challenging the status quo.


Why Section1?

Why Section1

There is always a lot of pressure when it comes to writing the first blog for a new startup. I am simply going to explain the “Why” of Section1, since every great company needs a great “Why”.

Studies show that 50-80% of all IT projects fail. They fail to come in on budget, they fail to come in on time, and they fail to deliver expected value. The challenge for IT leaders is that at the very beginning of a project, when they know the least amount about it, they are expected to develop requirements, pick a solution, select a vendor, and establish a budget. And there is no magic database that they can go to that gives them the information they need to do this effectively. It is like reinventing the wheel every single time and it is no surprise that IT projects have such a high failure rate.

IT projects fail for a variety of reason but the big three are:

  1. Not understanding the requirements
  2. Selecting the wrong solution, or the wrong vendor to implement the solution
  3. Underestimating cost

Section1 is a platform that reduces the risk of IT project failures by connecting IT Leaders with High-Performance Solution Providers. Section1 has a crowd sourced data analysis engine that grows smarter with every project and provides vital information to help IT leaders scope projects, develop requirements, and create a Request For Quote that the Section1 platform matches to the best qualified solution providers, based on their geographic location, company stability, capabilities, and experiences with other customers.

For Solution Providers, Service Providers, and Software Developers, we are an opportunity engine.

For more information about Section1, or information on how you can benefit as an IT Leader or Solution Provider, contact us at operations@section-1.com, or visit our website at www.section-1.com.