Why do Enterprise Software Projects Fail? [7 Reasons]

Why do enterprise software projects fail? Most of the time, technology isn’t to blame. Rather, failure occurs due to strategic misalignment between people, processes, technology, and data. 

While every business case is unique, there are underlying factors that seem to affect nearly all the organizations that ultimately scrap their projects.  Today, we’re looking at some of the most common reasons why these failures occur, and what you can do to ensure your project doesn’t fall victim to the same fate. 

Why do Enterprise Software Projects Fail?​

1. Setting an Unrealistic Timeline

We get it. Your teams are operating inefficiently, and your current systems are on the brink of a breakdown. You don’t have a second to waste, and you want the new software to be up and running as soon as possible. 

However, in your haste, you must resist the urge to expedite the project and shorten the timeline. 

Instead of relying on accurate predictions and real data, many businesses set arbitrary deadlines and schedules. They push forward with their own estimates, rather than talking to implementation experts or programmers about how long the project will actually take. 

When this happens, end-users are blindsided. They are woefully unprepared to adopt new processes and technology.

Also, quality slips. Your design is incomplete and full of operational potholes. The end product is less than user-friendly, supported by data that was never fully cleansed before it was transitioned.

In other words, it’s an obvious rush job. 

You can prevent these issues by allocating plenty of time to the project planning phase. Make sure all project team members are aware of the full scope of the project and the parameters that surround it. Give them enough time to deliberate and then incorporate their input when creating your timeline. 

2. Under-Emphasizing Organizational Change Management

It’s a common misstep, and it continues to happen: Businesses hyper-focus on choosing the right technology and designing the perfect workflows, but along the way, they leave their workforce grappling to make sense of the change. 

While tech is obviously a huge piece of the puzzle, the people behind it are even more important. During the vendor selection phase, ensure the solution you’re selecting meets your business needs, but don’t stop there. Think about who will be using the software and how they might react to a dramatic shift in their routine workflows.

Enterprise-wide change can be intimidating, and it can overwhelm even your best employees. By focusing on organizational change management (OCM), you can stay one step ahead of them using tactics like clear, consistent communication. 

This means addressing the need for the change and explaining the benefits it will provide. It means being available to receive feedback, answer questions, and ease common concerns.

Change management also means focusing on end-user training so everyone can get up to speed long before the system goes live.

Moving your attention to your employees doesn’t detract from the rest of the project. Rather, it strengthens your efforts and minimizes the risk of widespread resistance that could sink your project. 

3. Failing to Establish Clear Requirements ​

Why are you implementing enterprise software in the first place? What are your specific business requirements? Where do your pain points exist, and how can new technology help you solve them?

There will likely be one hundred different answers and a variety of different perspectives from employees, managers, customers, and other stakeholders. It will take time to analyze all this feedback, and not all organizations allocate enough time to narrow their requirements list to something manageable and clearcut.

Only when you know what everyone needs can you understand where gaps and inefficiencies currently exist. Without this insight, you can’t determine what features will be most important in a new software solution.

4. Failing to Secure Executive Buy-In

Any type of enterprise software project, like an ERP implementation, requires approval, buy-in, and ongoing support from your C-suite. These are the leaders who have the resources and authority to help you get the job done. 

Excellent project management can help you secure this buy-in. With a competent and trained professional at the head of your project, you’re more likely to pique the interest of your other leaders. 

However, don’t be surprised if they’re hard to convince. These types of projects are expensive and time-consuming. They can also draw employees away from their core work. 

Be upfront with your senior executives about these drawbacks, while at the same time, explaining the higher costs you could incur by sticking with the status quo. Clearly outline the benefits that the new software will provide, as well as the cost savings it will deliver.

While the initial sign-off is important, executive support shouldn’t stop there. You should establish an executive steering committee to keep the project team on track and ensure everyone has access to the tools and resources they need. 

5. Not Aligning Priorities

During an enterprise software project, it’s critical to ensure strategic alignment.

One area where this is especially necessary is when you’re prioritizing product functionalities. The members of your project team might have a variety of ideas about which features are must-haves and which ones belong on the optional list.

While it’s helpful to listen to their opinions, your team meetings should ultimately be unifying and constructive. Together, develop a list of features that your new solution absolutely needs. Then, make sure all stakeholders are aligned on these priorities and willing to champion them.

If you fail to establish these priorities early on, it’s likely that your project will experience scope creep. This happens when end-users and stakeholders request customization or additional functionality when the system is already in its final stages of development.

6. A Lack of Sufficient Testing

You might think of system testing as one of the last steps you take before your system goes live.

However, this is a step you should perform throughout the product development lifecycle. By testing components as soon as they’re developed, you can stay on top of problems and fix them before they affect the entire system. 

Knowing this, it’s smart to plan for testing far in advance. Allocate plenty of time to this task, as skimming over it could leave your new software riddled with bugs and errors. Pressing ahead with a buggy system could result in expensive downtime once the implementation is live. 

You’ll need to identify and address bugs at some point, and it’s easiest and cheapest to do so on the front end.

7. Over-Customizing the Solution

Rarely does an enterprise software solution work straight out of the box. You’ll likely need to configure it and add components to make sure it meets your business needs. In some cases, you’ll need to customize it.

Don’t get carried away with customization. It can be time-consuming to implement and can add extra costs onto the baseline solution.

Minimizing customization can be difficult, especially with employees hounding you to consider their individual change requests. We recommend taking each legitimate request into consideration and meeting with your project team to determine which ones are essential for your organization.

Avoid These Common Software Mishaps​

The right manufacturing ERP system, supply chain management system, or CRM system can transform your organization and help you unlock new efficiencies. It can encourage better collaboration, replace outdated technology, and improve customer satisfaction.

However, before you can start reaping these benefits, you’ll need to take the time to plan so you can avoid enterprise software failure.

Why do enterprise software projects fail? The causes are usually straightforward and easily avoidable. By dedicating enough time to project planning, you can avoid many of these common mistakes.

Our software expert witness team leverages their experience with failed implementations to help our enterprise software consulting team lead organizations to success. Request a free consultation below to learn more.