Why 70% of enterprise software implementation projects fail and what you can do to prevent it.
Many of our blogs and articles focus on Project Management and Process Improvement with a view to reduce costs and boost productivity, and yet one of the biggest costs for companies in the past 3 years (excluding the impact of Covid 19) is the cost of IT/Software blowouts.
For the last 25 years, the average success rate for enterprise applications that launch on time, on budget and work as expected, regardless of industry, project scale, budget size, and whether bought or built, is a low, persistent 29 percent (Standish Chaos Reports). Can you imagine if buildings, vehicles, or electronic devices had that same low success rate?
We explain this low success rate by saying that software is inherently complicated; that it's impossible to know what you need up front; and to get it right you must experiment, keep things open, see what works; and, in general, welcome the idea of fail fast, fail often. And if you really want to nail it, you've got to get yourself a rock star business analyst, UI designer, enterprise architect and developer. Right? But how often do you have one of those? Let alone a whole team of them?
So, even though delivering great software is hard, why can't we succeed fast succeed often? The accumulation of technical debt from wasted time and salaries from ongoing rework, excessive customisation costs, lost capex from scrapping projects, and when they do go live, lost time and productivity, and often increased workload is astronomical. All this erodes the profitability and sustainability of your business.
The good news is that we know why it's happening. And it's not your vendor’s fault, nor your development team’s, nor your customer’s. And it’s not your fault, or your staff’s fault. The root cause of the low success rate is that software engineering is the only one of the five major engineering disciplines that does not have a universally accepted method and blueprint for its products. Would you commission a new skyscraper, or chemical plant, or engine, or electronic device without a precise visual blueprint? Never! Yet businesses continue to commission multi-million-dollar enterprise applications, critical to their operations, without one.
