Many software projects fail.
These are not the projects that people go trumpeting about at conferences and user groups. Sometimes they fail because of a bad initial concept or design, sometimes from trying to do too much with too few resources. XP attempts to address all these pitfalls. If a project is doomed to fail, you need to find out fast before large sums of money are wasted. Instead of spending time creating an all-encompassing design and sending the programmers off for six months to implement it, design and code in small iterations and deliver the simplest thing that could possibly work.