Why do most software development projects get delayed, canceled, or go over budget?

We at Tipstat have faced a lot of these challenges with offshore software development over the years and would like to share our insights with clients and companies.

What makes a project successful?

We can say a project is completed successfully if the project meets these three parameters:

1. Its predicted timeline

2. It’s budget

3. The goal

It’s quite simple to write down the various methodologies followed for completing a project. Finding an idea, discussing the various aspects of the idea, modifying it based on related previous experiences, analyzing merits and demerits and surveying the success of the project, calculating the resources and budget of the project, etc are some of the steps put forward by successful project management experts. But still, the rate of project failures is surprisingly getting high. Let’s check out why most IT projects get delayed, canceled, or go over budget.

Why do IT projects fail?

According to The third global survey on the current state of project management, The poor estimation during the project planning is the largest contributor(32%) to the project failure. 


Even though this is an era of astounding technologies, nobody has invented a common solution to complete a project successfully. The reasons for IT project failures can depend upon client-related issues, project team-related issues. Let’s discuss them in detail.

Client-related Issues

The whole future of the successful completion of a project depends on the vision of the client. If the client has made a perfect road map that can be flexible moving forward based on real-time issues, then the project has a good chance of getting completed successfully. The problem arises when:

1. The scope of the project exceeds the budget: The idea of the project gets expanded when the development starts and with such expansion increases the cost. Other reasons can include sudden economic changes (war, resource price hike or unavailability, etc), loss faced in clients other projects, unavailability of funds from promised sources, etc.

2. Lack of interest: Some projects show their true colors in the middle of the development. The client might have felt that the idea is easy but due to the lack of proper research, such clients will re-evaluate that the complexity of the procedure of their idea implementation is high and that the project may not have the expected potential if finished.

3. Another opportunity: If the client gets a different offer that can give them much better results, then there are chances that they can either pause or shut down the current project.

4. Partnership fights: If the client has multiple partners and they get into fights that result in goodbyes can end the future of the project as well.

Project Team related issues

1. Lack of a proper team:  If the assigned project is complicated and there is no one in the team experienced enough to handle it, then the project can miserably succumb to non-existence. Also, if the same team is handling multiple projects from different clients, long delays or failures can happen.

2. Lack of proper communication: This is one of the major issues faced in all projects. If the client fails to convey the exact idea of the end product that they are expecting, then the project team will proceed on a road that will take them to nowhere. Similarly, if the internal communication between the sales team, development team, and testing team is not in the same frequency, then the chances for project failure increases.

3. Timelines, Deadlines: There is a saying that “It’s always easy to begin something but difficult to complete it”. For the successful completion of an IT project, it’s important to schedule proper timelines. There will always be a deadline marked by the client. Due to the unprofessional approach of the team, deadlines can be delayed.

4. Changes in the project team: Even though a project is handled by a team of 4-6 members, in most cases there will be a single brain that storms out the best ideas and accomplishments. If the team members who are more experienced and talented are removed from the project, then the expected deadlines cannot be met.

5. Lack of proper tools, resources: If the project team is not using standard scientific methodologies in planning, preparing, implementing, and auditing the project, then the chances for project delay, deviation from the core idea, and failure can occur.

6. Testing vs Development: There is always a war between the development team and the testing team. In most cases, this competition is good for the refinement of the project. But if the war is unhealthy, then the project gets delayed or canceled.

User- related issues

The users or customers are the ultimate group of people who decide the success of any project. If the project can’t convey its true purpose, then it is considered useless even if it gets completed. When a project team works independently in a closed environment, they lose open communication with users and fail to get feedback from them. So at different levels, the project team invests time resources, and money on things that are not needed by the end-user. The user may not even use the product due to the user interface complexity.


According to the Project Management Institute(PMI), “There is no single method or organizational structure that can be used to manage projects to success”. Let’s see some of the most common methods used to resolve the issues that can cause project failures.

1. Keeping clients in the loop from start to end: This is very important. There should be frequent communication between the client and the project team. The client should be informed about each step taken in the project cycle. Similarly, the project team should set up presentations and detailed reports after the completion of each milestone.

2. Proper Project Planning: The bigger the project, the smarter the plan should be. There should be a well-documented guideline or project plan to follow. This guideline has to be created in the presence of the client(in most cases the client will provide a guideline, the team can modify that based on their workflow). The document should be followed in all cases. The selection of proper members in the team is also important. The project team should contain people who have prior experience and deep insight with similar projects. 

3. Adapting to the real-time changes: According to THE HARVEY NASH / KPMG CIO SURVEY 2017, 64% CIO’s say that the political, business and economic environment is becoming more unpredictable (Source:https://www.hnkpmgciosurvey.com/pdf/2017-CIO-Survey-2017-infographic.pdf). Hence the project team should always be willing to face unpredictable problems in the project roadmap. Identifying real-time issues and solving them without exceeding the deadline is the key part. 

4. Communication is the key: According to the third global survey on the current state of project management, Implementing efficient and effective communication strategies positively affected projects quality, scope, business benefits, performance levels, etc 

(Source: https://www.pwc.com.tr/en/publications/arastirmalar/pages/pwc-global-project-management-report-small.pdf ). 

Studies show that projects with healthy communications are having more success rates. The client-project team communication and interpersonal communication inside the team should be effective.

5. User is the king:  Even if the project met all the parameters that are essential for its success, it can miserably fail due to one factor: customer satisfaction. There should be a bridge between users and the project team so that they can test the real-time usage and functioning of the project with users. This is the reason why famous companies release a beta version before launching the product.

Hence we can say that the project management process requires a good investment in planning, strict feasibility checks using effective tools, efficient communication, an experienced team, vigorous testing at each level,  and active user interaction sessions. 


1. https://www.pmi.org/learning/library/seven-causes-project-failure-initiate-recovery-7195

2. https://www.cio.com/article/3211485/why-it-projects-still-fail.html

3. https://www.atspoke.com/blog/it/reasons-for-it-project-failure/

4. https://www.techrepublic.com/article/6-reasons-why-your-it-project-will-fail/

5. https://www.objectstyle.com/agile/software-projects-failure-statistics-and-reasons

6. https://www.pwc.com.tr/en/publications/arastirmalar/pages/pwc-global-project-management-report-small.pdf

7. https://www.hnkpmgciosurvey.com/press-release/

8. https://www.hnkpmgciosurvey.com/pdf/2017-CIO-Survey-2017-infographic.pdf


10. https://www.iqvis.com/blog/why-it-projects-fail-top-8-reasons-explained-here/