The 3 Perils of Software Development: Why Projects Fail and How to Avoid It

Almost everyone’s dealt with software project failures.  But fighting fires only gets you so far.  Eventually, you have identify the root cause—and that’s never been easy.  At least until now, that is.

In the case of software development, there are 3 Perils that conspire to sink your projects: Defects, Delays, and Dollars.
Understanding them is vital to ensuring the future of your next project.

“Why do software projects fail?”  

That question is about as universal as IT gets.  It’s shouted from boardrooms, uttered quietly in the offices of frustrated directors and VPs, and discussed ad-infinitum by scrum teams nationwide.  In fact, I’m willing to bet you’ve probably asked it yourself once or twice.

And yet, like the meaning of life, very few people in software circles can really answer that question.  A lot of IT teams have simply accepted project failures as an uncomfortable reality, which explains why the Standish Group estimates that only 6 percent of major software projects are considered “successful” upon release—launching on time, on budget, and with their anticipated scope.

So why does this happen?  In the case of software development, there are 3 Perils that conspire to sink your projects: Defects, Delays, and Dollars.  And understanding each and every one of them is vital to ensuring the future of your next project.

Defects: The First Peril

Look back at any bloated software project you’ve had and you’ll likely remember a whole lot of defects, riddled throughout every phase of development.  You might also recall where they did the most damage: in production.  When defects pop up after software releases, they don’t just cause user frustration; they also are a whole lot harder to correct—requiring costly rework and lengthy delays to fix.

For every development stage that a defect goes undetected, it costs a whopping 5x more to fix.  That means a defect, if not found in requirements, can cost 78,125 times more to repair when it is found in production!

Treat defects like diseases.  The earlier you catch them, the better off you’ll be.

Delays: The Second Peril

Whether they’re caused by the downstream impact of “small changes” the business wants to make (we’ve all been there, right?), poor planning/coordination, or defect-related rework, delays are your worst nightmare.  Their toll on your projects can be painful (busting budgets and schedules) and their effect on your credibility is excruciating—oftentimes resulting in upper management tightening the purse strings and looking towards future initiatives with a heavy dose of skepticism.

The Harvard Business Review discovered that 1 in 6 major software projects overruns its schedule by an average of 70%—and goes over budget by an average of 200%!

If delays are a constant problem for you and your team, consider improving your test plan.  A metrics-based, predictive approach can help you understand where to concentrate your testing effort—keeping you from underestimating your schedule while focusing your team on the highest-risk areas of your code.

Dollars: The Third Peril

Even if you’ve ever experienced either of the first two perils, you probably know this one well.  Defect-related rework and continual delays almost always lead to two inevitable outcomes: massive budget overruns and drastic actions from the people at the top.

Mounting expenses drive upper management to a particularly nasty dilemma—reduce the project’s scope and try to salvage some part of the project or cut the company’s losses and cancel the whole project altogether.  And sometimes that’s just the tip of the iceberg!

From 2001-2002, Kmart sunk around $2 billion into transformational IT initiatives.  Both projects went off the rails in 2002, and the combined loss was a major contributor in the company’s decision to file for bankruptcy that same year.  By the time they were acquired by Sears Holdings, Kmart had closed over 600 stores and 67,000 employees had lost their jobs.

That’s the real cost of software failure.  And if you’re not proactively trying to steer clear of the 3 Perils, that’s exactly where you can wind up.

Staying in the Clear

There’s no getting around it: keeping your projects on track can be notoriously difficult.  But, with a solid understanding of the 3 Perils, attacking their root causes becomes far and away your most effective course of action. 

In this case, that means implementing processes to reduce defects and delays; which, in turn, will help keep your projects from overrunning their budget.  And, if the day ever comes that your project does go well over its budget, make sure that your company’s decision-makers have a clearly-defined “cancellation point” where they’ll pull the plug.  There’s nothing worse than a bloated software project that’s costing the company millions with no end in sight.

But that’s not going to happen—provided you understand the 3 Perils and how to avoid them.  If you need a bit more information on that front, don’t hesitate to reach out for an in-depth discussion with one of our experts.  We’re happy to help!

After all, isn’t it about time you had a definitive solution to that age-old question?


Mike Hodge
Lighthouse Technologies, Inc
Software Testing | Quality Assurance Consulting | Oracle EBS Consulting

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