Seven critical activities for successful software project planning

By Peter Meyer, Principal Consultant, Elkera Pty Limited

Software projects have a high failure rate

In an article on Elkera’s website: Why you should be afraid of software project failure, I described the high rate of failure or under-performance of software projects. Only around 30% of projects are rated as successful. A majority of projects under-perform and many fail completely.

Business managers should be alarmed by those results.

Small and medium enterprises are at a disadvantage in software project planning

Most larger enterprises regularly undertake software projects. Managers of those organisations have learned many of the key lessons in software project planning. Larger organisations also are likely to have expert business analysts and project managers on staff who can effectively guide project planning activities. Based on those factors, it is likely that larger enterprises will have a higher success rate than other enterprises. Larger enterprises should be able to continually learn and adapt to improve project outcomes.

On the other hand, many small and medium enterprises (SMEs) face these problems:

  • Managers of SMEs often are not experienced at guiding software projects. They may not appreciate the activities that are required to plan a successful project.
  • As a result of the lack of expertise, projects are often left to, or initiated by, the manager of a particular area of the business and planned without effective consultation with other stakeholders. Sectional interests may take priority over organisational interests.
  • Many SMEs do not have expert business analysts or project managers on staff. Project planning may be undertaken by inexperienced, in-house personnel who do not have the skills to effectively undertake the required activities.
  • Many SMEs do not have a strategic or master plan to guide and prioritise systems development. Individual systems may not be well coordinated.

SMEs that suffer from those problems are at a severe disadvantage, compared to larger enterprises.

It is true that not all SMEs are alike. Some do have the skills to successfully undertake complex software projects.

But those SMEs that fit the above profile face a high level of risk that their software projects will fail to deliver maximum benefits. Many of their projects will fail completely.

Barriers to improvement

Many managers of SMEs may not be aware of the risks and will wrongly assume that their projects are low risk. Many also seem to think that, with a bit of work by someone in-house, they will be able to pass the project to a solution vendor who will effortlessly understand their needs and deliver a great solution.

Unfortunately, the project success statistics tell a different story. Almost certainly, SME software projects are over-represented in the large pool of under-performing and failed projects. Given their lack of project experience and internal expertise, how could it be otherwise!

The obvious answer to the SME disadvantage is to hire an expert. Unfortunately, SME managers are unlikely to seek external help for a problem they don’t recognise.

Strategic activities for SME business managers planning a software project

The only way that project outcomes can be improved for SMEs is to raise awareness of the activities that are required to plan a successful software project.

Regardless of the type of software project, certain critical activities must be undertaken for it to succeed. I propose seven activities which I consider to be the most critical:

  1. Analyse and clearly define the organisation’s problems, business needs and objectives, based on inputs from all relevant stakeholders.  Clearly define the project scope.
  2. Analyse all affected workflows and business processes, assess them for improvement and simplification and design a new or improved way of working. Doing so will facilitate automation and maximise the benefits of new software.
  3. Rigorously assess the benefits of all functions proposed for the new software to determine their business value. Assess technology and other risks as part of that process.
  4. Assess the maximum investment that should be made to secure the planned benefits.
  5. Develop a specification of requirements that is aligned with the nature of the expected solution and the proposed procurement process. Requirements for a configurable cloud-based product are very different to those for a custom development.
  6. Develop a procurement plan to guide identification and selection of a solution provider who will reliably fulfil the requirements and provide the best value. Make no assumptions in the plan about choices of technology or solution provider unless those assumptions are based on clearly justified constraints.
  7. All significant software projects involve change. Develop a change management plan to guide all organisational change, training, deployment and internal support to maximise benefits realisation.

SME managers who understand the need for those activities are better able to make good planning decisions that will maximise the benefits of their projects.


Many SMEs are at a significant disadvantage when planning software projects. They may not be aware of critical project planning activities. They may not have in-house experts who can undertake those activities. Many SMEs rely on inexperienced personnel for project planning.

Software projects require a complex set of planning tasks. It is a false economy to rely on inexperienced personnel to plan a software project. Doing so greatly increases the risk of project under-performance or outright failure.

Managers who are aware of the critical activities necessary to undertake a successful software project are more likely to appreciate the need for expert planning help. With that help, SMEs should minimise the risks and maximise the benefits from their software projects.