Business leaders are tired of software implementations that do more harm than good. Many have been burned by big-ticket solutions which — even if the technical implementation has gone relatively smoothly (i.e. the ‘go-live’ happens more or less on time and within budget) — fail to deliver lasting value. The promised changes don’t stick, and the solution doesn’t live up to expectations.
It’s not only expensive or complex software projects that fail. According to the Standish Group's 2020 CHAOS report, two-thirds of all software projects fail.
But it’s the legion of ERP disasters that usually grab attention, as they often result in millions of dollars in losses and widespread business disruption. Up to 50% of ERP implementations fail the first time around, with 64% of ERP projects going over budget and 30% taking longer than expected.
Denis Bensch, CIO at FlowCentric, notes that there are many ways in which a software project can be deemed a failure. For example, failure may take the form of an implementation being cancelled partway through — often because the company runs out of time or money.
“If the company can’t afford to finish the implementation, they won’t see the full benefits. Similarly, if they are pushed for time and go live too soon, the system could fail to perform — or fail to gain user adoption,” he says.
Often, the project is technically completed but ends up under-utilised, usually because its features and functions don’t deliver what the business actually needs — or what was promised.
And sometimes, failure stems from external events beyond the control of the company or the implementor, such as natural or economic disasters — for example, 2012's Hurricane Sandy or the COVID-19 pandemic.
Whatever the cause, the result is usually the same: financial losses and organisational strain.
The 12 most common reasons for software implementation failures include:
1. Lack of support from top management
Top management must be committed and willing to support the cultural change that implementation brings, including altering entrenched habits. If experienced, decision-empowered users and managers are not involved from the outset, success is unlikely. Leadership turnover can also derail progress due to miscommunication, shifting strategies, or a lack of buy-in from new executives.
“Consultants don’t know the business or its internal processes and culture well enough to go it alone when it comes to implementing meaningful systems,” Bensch says.
2. No internal champion
A strong internal champion — not necessarily from senior management — can drive change and keep enthusiasm alive throughout the business. This person must believe in the value of the software and be willing to advocate for it.
3. Software doesn’t fit the needs or culture of the business
This usually happens due to a poor understanding of the business, the software — or both. It often occurs when the functional specification (the document outlining what the system must do) isn’t thoroughly reviewed or approved. Too many leaders rely on external consultants to tell them what’s needed. Instead, they should trust their knowledge of their own organisation to determine what the business requires.
“You don’t need to be an expert on software to be an expert on your business,” says Bensch.
4. Goals are not clearly defined
If the right stakeholders aren’t involved in defining project goals, the outcome will likely fall short. Misunderstandings between the client and implementor are common, which is why a detailed, approved functional specification is critical — it surfaces misalignments early.
5. Unrealistic timeline
If the project timeline is too short, it may skip essential due diligence and testing. This increases the risk of going live with a product that isn’t ready.
6. Inability to integrate with existing systems
Integration is vital to ensuring the solution remains usable as the business and technology evolve. Without proper integration, organisations may be forced to replace existing systems or forgo valuable functionality.
7. Limited usability testing
If the system is difficult to use — whether due to poor interface design or lack of fit — adoption will suffer. Think of a field technician wearing gloves, expected to complete inspections using a stylus on a desktop-optimised form.
8. Lack of training and change management
Training and change management won’t happen on their own. Both require structured planning and time. Too long a delay between training and use erodes momentum, while too short a window doesn’t allow for effective preparation.
9. Unnecessary complexity
Some software is bloated with features that the company doesn’t need — and still ends up paying for. This leads to low utilisation and wasted budget.
10. Poor out-of-the-box fit
Companies often find themselves either changing their processes to suit the software or spending heavily on customisation. Neither is ideal if it wasn’t planned for.
11. Over budget, slow implementation
If the implementation runs over budget or falls behind schedule, the organisation may be forced to pause — or abandon — the project. Stopgap workarounds often become entrenched, undermining the original goal.
12. Lack of support
Poor support limits system functionality and creates frustration. This is especially problematic when support comes from overseas, introducing delays and currency risks, or when there’s no support at all.
TL;DR
Due diligence is essential. Before you sign any contracts or start building, know what your business actually needs — and whether the software will be useful, usable, and sustainable. Also remember: no software lasts forever. Having a clear sense of the system’s minimum useful lifespan will help you justify the costs and effort involved.
You don’t need another failed implementation. You need a partner who understands your business and builds software to match. Talk to FlowCentric — and build it right the first time.
