Why digital government projects stall and how agencies can avoid it

Despite high aspirations, many digital transformation projects stall or fail, in both significant and minor ways. (Up to 70% of digital transformation projects fail, according to research from McKinsey.) Issues with public sector IT projects don’t just cause internal hiccups; they can disrupt critical services, delay benefits to residents, and erode public trust.

Understanding how and why projects stall or fail is important for improving the odds of modernization success.

Why do digital government projects stall? 

Digital government projects stall or fail, either partially or completely, for various reasons. In many cases, the technology itself isn’t the root problem. Instead, issues emerge from how projects are planned, governed, funded, and sustained over time — often long before implementation begins.

Loss of a project champion: When the individual who drove the project forward leaves the agency, there’s often no clear owner to take responsibility post-launch. Institutional knowledge may live with a single employee or, worse, exclusively with the vendor. Without documented processes, internal expertise, or a clear transition plan, systems stagnate, and confidence in the solution erodes.

Funding structures also play a major role. Grant-funded projects may launch successfully but stall once initial funding expires. Ongoing costs for licensing, support, integration, and maintenance aren’t always factored into operating budgets. When budgets tighten, maintenance and optimization are deprioritized, turning once-promising systems into tech debt.

Procurement and contract language can be constraining. Highly prescriptive requirements reflect how work is currently done, but not how it needs to evolve. Over time, change orders become politically difficult or financially unfeasible. In some cases, project timelines extend beyond leadership tenures, leaving successors to manage contracts and systems they didn’t design or support.

Poorly estimated timelines are another contributor. Legacy system integrations can make government IT projects more complex than anticipated. Data quality issues, security reviews, and cross-departmental coordination also contribute to the completion time. Schedule delays mean lost momentum (and typically, a decline in stakeholder confidence).

A lack of clear strategic direction can also derail projects. Teams often focus on technical requirements instead of solving real problems. Without a shared understanding of how a system helps the agency reach bigger goals like better service, more efficiency, or greater transparency, projects end up being reactive. 

Finally, many projects fail to define what success actually looks like. If goals are not set at the beginning, agencies have a hard time measuring progress or knowing if the system is valuable. Success then becomes a matter of opinion, which makes it hard to justify more investment or changes.

How government agencies can avoid project stalls and failures

Avoiding stalled or failed projects requires shifting focus from technology alone to the systems that support it. Successful agencies start by setting clear, outcome-driven goals tied to internal priorities and resident needs. They invest in cross-functional project management, thorough documentation, and training, reducing reliance on single individuals or vendors.

Operating with modern procurement practices ensures that government IT projects start off on the right foot and are set up for success. Planning for long-term funding and maintenance from the outset ensures systems can evolve rather than decay.

Most importantly, agencies that succeed treat digital transformation as ongoing work, not a one-time project. By creating a strategy that aligns procurement, funding, and accountability, governments can reduce risk, sustain momentum, and deliver technology that continues to work for residents long after launch.