Dodge the Bumps: Why Do Enterprise Projects Fail and How to Prevent it?

To make sure your large-scale software development initiative is destined for success, you need first to figure out why enterprise projects fail. 

Deloitte reveals that 21% of them never make it to deployment, 46% face budget overruns, and another 42% can’t stick to the project schedule or cannot deliver the expected outcomes. So what are the reasons that contribute to an enterprise project’s stall or fail, and how to safeguard big-ticket solutions?

Our experts are pros at dealing with the challenges of enterprise software development and strategizing your success. Read our guide to get the lessons learned first-hand — without projects burnt.

What is considered a failure for a software project? 

“The greatest teacher, failure is.” 

However, the degree of failure makes all the difference and when it comes to notable mistakes, it’s better to learn from others’ missteps rather than pay this high-priced teacher out of your own pocket.

Speaking of software development, a project is deemed a failure if it demonstrates one or several of the criteria:

1. Doesn’t solve the end users’ problem. Mismatching customers’ needs and releasing an undemanded product is the worst scenario possible.
2. Falls short of its original business objectives. You might end up with a different product if your tech partner wasn’t guided by your goals to provide expected project deliverables. 
3. Lacks quality. Jerry-built software is a one-way ticket to project failure caused by the inability to fit into your software ecosystem and scale appropriately. 
4. Fails to bring intended ROI. If the project can’t meet your ROI target and you don’t see a way to give it another shot, it’s time to stop. Run a retrospective and reflect on why the project went wrong to avoid the same pitfalls in the future.  
5. Messes with a timeline. Rolling out the project on time may win you a competitive advantage over your peers.

Some of these factors, such as budget and due dates, can be considered tolerable for the purpose of creating a top-quality, secure, and scalable product. That’s how challenged yet viable and eventually successful projects rise.

Hurdles that contribute to statistics on project failure 

If you made it to the enterprise level, tasks such as resource planning, risk management, choosing appropriate project methodology, etc. aren’t the tough nuts to crack. However, you can still face common project pitfalls stemming from the complexity and longevity of enterprise solutions.

1. Neglected discovery phase

For over two decades, we’ve been witnessing proofs of the principle: 

Shortcuts on the basics always bite you later. 

As an enterprise project is a marathon, mapping out the route is worth it. And a method to avoid project failure is within your grasp — start with a discovery, or an inception phase. At this initial stage, your tech ally digs into your new ideas and aligns your project vision with business context, market trends, and user needs to shape it into a comprehensive roadmap to a top-notch solution.

The discovery phase isn’t a cure-all, but it can help nip most enterprise software development issues in the bud and unveil strategic opportunities that weren’t on your radar before. 

While project deliverables at the inception stage can vary depending on the specific software development services provider, at *instinctools, we bring a lot to the table to minimize the delta between value and cost. 

Our on-field experience in safeguarding large-scale solutions from failure proves that it’s not too late to take another crack, even if it seems that your project has already gone down the drain.

We were once approached by a European venture capital enterprise that wanted to launch a web platform for VC investors and funds. Their trailblazing B2B2C solution was supposed to pull ahead of the competition, but the haphazard implementation approach of the client’s previous tech partner put the product launch at risk. 

Nevertheless, during the discovery workshop, we tackled all issues — clarified organizational priorities and product vision, aligned the development scope and project plan with updated expectations, and outlined the backlog for future releases. These efforts led to decreased time to market and fruitful rollout.  

2. Flawed delivery model

Delivering on time, budget, and, more importantly, on value is a tricky mission. Adherence to the Agile development approach is a table stake, and it alone won’t hand the desirable outcome to you on a silver platter. 

To ward off shoddy code, jerry-rigged architecture, muddled project documentation, non-transparent processes, and failures in project management, you’ll need a solid delivery model encompassing engineering best practices, a tried-and-true architecture approach, and time-tested project management handbook. 

Digital product engineering companies that make the grade in enterprise software development usually build up a custom delivery model backed up with their on-field experience — that’s how we do it at *instinctools. Besides following PMBoK (Project Management Body of Knowledge) and DAD (Disciplined Agile Delivery) principles, we amp up these best practices with our 20+ years of hands-on expertise in crafting large-scale solutions and fortifying them from project failure.

3. Constantly changing goals cripple the project’s scope 

Another nail in the project’s coffin is inconsistent objectives and the consequent scope creep. According to the Project Management Institute study, in 2022, at least 28% of projects experienced it.

Vision&Scope document can call for revision if the market conditions and customer needs have transformed. Nonetheless, even advisable changes should be applied appropriately. Regarding the development cycle, if a sprint’s goal changes, the project team stops it and starts another iteration with re-planning and re-assessment to avoid scope creep and rework in the future. 

If the ship was heading north and then got the command to change the route and move south, sending there a few lifeboats wouldn’t make a difference. You need to turn the whole ship in a new direction. It works the same way for product development.

— Konstantin Nikitin, Lead Project Manager, *instinctools

However, changes may be driven by the desire to implement some trending features without taking into account the existing backlog. In such a case, they only clutter up the scope, slow down the development process, and bring you closer to becoming a failed project example. 

That is another reason why a solid basis such as a discovery phase is vital — it’s easier to stick to the goal and the path to get there when they are clearly defined. To drill down on the project objectives, put a premium on investigating the market, existing solutions, and customers’ uncovered needs.  

4. Not seeing the forest behind the trees

The degree of a project’s success depends on the business’ overall readiness to embrace the digital transformation, which requires equal attention to its all-important dimensions, from people to processes to technologies. 

For example, you can’t adopt cloud-based ‘everything’ to light-speed time to market without taking care of QA automation and honing unit and integration tests. Cloud migration increases the number of releases x20 per day, and such a workload is beyond manual handling.

One of the major project challenges may also lie in delivering software that seamlessly fits into your existing ecosystem. That’s the struggle one of our clients faced. A global software licensing company was looking for a tech partner to deal with a legacy system modernization as a part of its overall digital transformation journey. We offered two options:

• Moving fast and renovating the existing software to the most up-to-date solution available
• Going step by step by upgrading the versions of existing software and, eventually, adopting a coveted modern solution

5. Inadequate governance model affects communication at all levels

We’ve seen projects that had failure right on their threshold because of poor communication between the development team and stakeholders on the client’s side. What are the consequences?

• Insufficient C-level engagement puts additional stumbling blocks on the project’s path

What are your expectations when hiring a dedicated team for enterprise development? Based on our clients’ experiences, this decision is usually driven by a desire to delegate development tasks to industry experts and get top-quality software with minimal risk of the IT project failure. 

No CEO, CTO, CXO, or other company executives want to be engaged in the development process on a weekly basis and resolve operational issues. They expect to receive monthly and quarterly visualized strategic reports with highlighted key metrics that prove the project is moving in the right direction. 

Yet, no matter how much you want all the magic to be happening behind your tech partner’s doors, top-management involvement — clearly, within reasonable limits — is vital, especially at the initial stages. To arrive at the destination set at the start, C-level product vision should be clearly articulated, documented, and treated as the project’s North Star. 

• Discrepancies in product vision fuels constantly changing objectives 

If several stakeholders on the client side haven’t collaborated much before the project, working together on a roadmap can be a point for bridging the gaps in their perspectives and establishing reliable communication. 

• Misalignment between the stakeholders, tech partner’s team members, and end users can derail the whole project

Matching technology with common sense is a top priority that should be covered by close collaboration between the development team and the client. Minor details can take their toll and lead to crafting software your employees won’t even be able to use. 

Your dedicated team can create a five-star app with ample touch and gesture functionality. But what if the warehouse staff works in gloves and won’t be able to leverage all these touch-based features? As always, the devil is in the details, and your tech services provider should uncover and take them into account from the get-go. 

That’s how we deal with it at *instinctools. We have a project governance framework that implies all-encompassing, multi-level collaboration between the team members and a client:

Our approach addresses issues at different levels so that they are handled by contributors with the relevant competencies. The majority of head-scratchers are resolved at the project level in a matter of days or weeks. Questions of the company level are discussed at quarterly meetings. 

6. Chase for the quick win

When it comes to enterprises, one of their pain points is a large ecosystem of heterogeneous internal solutions adopted throughout an organization’s existence and, therefore, challenging to manage and maintain. As a software company that faced and overcame these hurdles while working on our clients’ projects, we totally understand the hunger for affordable software. However, a quick route to success isn’t always the go-to option and may actually lead to the failure of IT projects. 

We once got a request from a manufacturing corporation to review their CI/CD processes and fine-tune them so that everything will keep up and running hitch-free over the next decade. 

However, even consulting standard-bearers such as Gartner won’t risk doing horizon scanning for such a distant future and making bold predictions since the IT landscape changes like the wind.  

Enterprises need to accept their fate rather than expect a wow effect from the out-of-the-box solutions that promise to fix things once and for all. My 15-year experience in managing large-scale projects shows that there’s no way to avoid customization of ready-made solutions for established IT landscapes. 

Nevertheless, be aware of the opposite extreme — over customization, which is just as detrimental to the software and can become one of the reasons why projects fail. 

— Konstantin Nikitin, Lead Project Manager, *instinctools

7. Over-reliance on technology instead of business outcomes

It’s important to look under your feet when walking the tightrope, but if you dwell on the road for too long, it’s easy to lose the vision of the final goal. 

Similarly, technology isn’t a destination; it’s a way to bring you there.

Here’s one more case from my practice. A fintech company bet on an out-of-the-box DWH solution with a $60,000 yearly license, hoping it would solve 90% of their data-related problems. However, the cost of software integration into their ecosystem exceeded $1,000,000. 

A feature-rich, out-of-the-box product — just as they wanted. However, building a custom solution from scratch would have cost much less than adjusting an off-the-shelf solution to their IT landscape. 

— Konstantin Nikitin, Lead Project Manager, *instinctools

8. Mismatched expertise

The root of all the previous problems may lie in hiring the wrong team. If a dedicated team lacks the expertise to cover your enterprise-scale projects, it turns into additional risk you have to manage.

Finding a reliable tech partner and leveraging IT staff augmentation to extend your in-house expertise or outsourcing development tasks to a fully-packed dedicated project team is a golden ticket to reaching your high-level goals while ensuring your solution is secure, and the core knowledge won’t leak outside the company. 

To cut the chaff at the initial stage and exclude the team factor from the list of potential causes of failure, validate the trustworthiness of the potential vendors:

• Verify if they are present on business listings, such as Clutch, GoodFirms, Techbehemoths, SelectedFirms, etc.
• Scrutinize their market reputation by checking testimonials of previous clients
• Review the company’s case studies to see if its expertise clicks with your project’s needs

Pave the road to fail-proof enterprise solutions

Withstanding unclear objectives, unrealistic expectations, and scope creep while keeping your eyes open to new strategic opportunities isn’t an easy road. Yet having a blue-chip partner by your side allows you to rest assured of achieving desired outcomes. 

Let your tech ally run a discovery phase, clarify organizational priorities, draw up a project plan, choose adequate delivery and governance models, keep project leaders on the same page, track due dates, and more, to avoid project failure and deliver the results you are aiming for.   

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