Lost business opportunity Whenever a project is killed, the associated business opportunity is lost (or, at best, postponed). If the cancelled project was expected to enable the company to enter new markets, the effects on revenue and earnings may be significant. Be sure to evaluate the long-term business impact during the decision-making process.
Morale Project teams can become emotionally invested in a project's success. If the project is eliminated, morale can suffer. Remaining team members may become unproductive, and those with highly marketable skills may decide to leave (particularly if only a few undesirable projects are offered as alternatives).
Derogatory comments from disillusioned employees can make it difficult to retain other IT staffers for future projects or to attract new employees. Clearly communicate the reasons for eliminating a project, as well as opportunities for other interesting work within the company. Enlist your company's communications department to minimise fallout.
Media coverage Years ago, disgruntled employees had limited outlets for expressing their dissatisfaction. Even if a whistle-blower got media coverage, the story would be quickly replaced by other news. But social networking and electronic publishing are changing this.
The permanence of blogs, wikis and archives (combined with comprehensive search capabilities) make it easy to keep a story alive forever. It is increasingly important to deal with employee complaints openly, fairly, and in a timely and straightforward manner.
Making the decision to kill a large project is sometimes a bit like divorce and is never easy. You need to weigh the trade-offs carefully, and evaluate all the potential ramifications. Make sure you have a comprehensive plan to address anticipated political, financial and employee issues.