Jacinth Paul
- Dec 5, 2022
- 4 min read

Epic Project Management Failures in the Software and IT Industry | MNCs to Startups

Image by jcomp on Freepik

In any industry, project management failures can happen. However, in the software and IT industry, these failures can be especially costly—both in terms of money and in terms of missed opportunity.

After all, these industries are built on innovation, which means that even a small setback can have major consequences. Here are five examples of project management failures in the software and IT industry in Government projects and MNCs.

Project Management Failures in MNCs

1. The US Department of Defense's $1 Billion Dollar Project Management Failure

In 2013, the US Department of Defense (DoD) was tasked with developing a new military payroll system. The project was fraught with problems from the start, including a lack of clear objectives, unrealistic timelines, and insufficient funding.

As a result, the project quickly spiraled out of control. In the end, it cost taxpayers $1 billion dollars and was ultimately scrapped.

2. The ObamaCare Website Launch Disaster

The launch of Healthcare.gov—the website for the Affordable Care Act (ACA)—was an unmitigated disaster. The website was plagued with technical glitches that prevented users from signing up for health insurance.

The frustration caused by these glitches led to widespread public criticism of the ACA and put a black mark on President Obama's legacy.

3. HP's $8 Billion Project Management Failure

In 2011, HP embarked on a massive project to create an integrated customer service system. The project was plagued by unrealistic deadlines, political infighting, and a lack of communication between departments. As a result, the project was years behind schedule and $8 billion over budget when it was finally scrapped in 2013.

4. Nokia's $40 Billion Bet Gone wrong

In 2011, Nokia bet big on Microsoft's Windows Phone operating system (OS), betting that it would be the next big thing in mobile devices. Unfortunately for Nokia, that bet did not pay off. By 2013, sales of Windows Phone-powered devices had stalled, leaving Nokia struggling to catch up to its competitors.

In 2014, Microsoft bought Nokia's struggling phone business for $7 billion—a far cry from the $40 billion Nokia had invested just three years prior.

5. Google+'s Failures Lead to Its Demise

Google+ was Google's attempt to take on Facebook in the social media space. However, Google+ never really caught on with users despite Google's best efforts. In fact, usage rates were so low that Google began shutting down various features of the site in 2015 before finally killing it off entirely in 2019.

For Google, Google+ was an expensive failure that ultimately served as little more than a case study in how not to launch a social media platform.

Project Management Failures in Startups

In any industry, project management failures can happen due to a multitude of reasons. Whether it’s due to a lack of experience, unrealistic deadlines, or inadequate resources, any number of factors can contribute to the downfall of a project. In the tech world, startups are especially prone to project management failures due to the ever-changing landscape and the race to be first-to-market. When minutes can mean the difference between success and failure, it’s no wonder that so many startups crumble under the pressure.

Below are few examples of startup failures that can be attributed, at least in part, to poor project management.

1. Secret (2014) - $35M Losses

Secret was a social media app that allowed users to post anonymously. The app was launched in 2014 and quickly gained popularity; however, due to a number of issues—including allegations of bullying, doxing, and harassment—the company was forced to shut down in 2015.

So what went wrong? In an interview with Forbes, co-founder David Byttow said that "a combination of humans and technology failed." In other words, there wasn't enough manpower or resources dedicated to curating and moderating content on the platform. As a result, harmful content went unchecked and drove users away from the app.

This is a prime example of how a lack of resources can lead to disaster. Without adequate moderation, any social media platform is susceptible to becoming a hotbed for negativity—something that users are increasingly less tolerant of.

2. Homejoy (2015) - $32M Losses

Homejoy was a home cleaning startup that raised over $40 million in venture funding before shutting down in July 2015. Much like Color Genomics, Homejoy made the mistake of prioritizing growth over profitability—and it ultimately cost them dearly.

In an interview with Forbes shortly after the shutdown, co-founder Adora Cheung said that "too much growth early on killed us." The team was focused on acquiring new customers instead of retaining existing ones, which led to high customer acquisition costs and ultimately made the business unsustainable.

Project Management in web3 projects

Project management is critical for any software development project—but it's especially important for web3 companies. Due to their decentralized nature, web3 projects often have distributed teams with little formal structure or hierarchy. This can make it difficult to maintain clear communication and accountability among team members.

As its seen with many startups struggling to launch their mainnet, inefficient treasury management, lack of risk management practices are common issues. Such project management failures in web3 companies, can lead to significant delays and frustration among investors. Hopefully, by learning from these mistakes, we can avoid them in future web3 projects.

Conclusion

From these examples, we can see how even small missteps in project management can have drastic consequences—especially for startups who are operating on tight budgets and timelines. In today's competitive landscape, it's not enough to simply launch a product—companies need to focus on profitability from day one if they want any chance at long-term success.

Project management failures happen—even in the software and IT industry where innovation is key. These failures can have serious consequences ranging from wasted taxpayer dollars to lost opportunity cost. To avoid becoming another statistic, project managers need to learn from these failures and put processes and procedures in place to prevent them from happening again.