What will be the consequences to the business if a project fails to deliver the objectives?

A very good question, no one would like to talk about failure, but actually we learn more from bad experiences rather than good ones, Failure cost loses on many levels:

- Financial: this is the direct loses of resources and operational expenses

- Investment: like business partners, opportunities, ROI, market share, reputation and credibility.   

There can be two perspectives: Contractor's and Owner's

• From contractor's point of view contractor may or may not have suffered financial loss while remaining objectives are unfulfilled. If the objectives are not achieved due to contractor, it would reflect bad on the reputation of the company and company would surely face difficulty in securing future business in the same field; especially if the competition is available. Companies are known to bring major changes in their structures after such failures to win back the confidence of the customers.
• No matter who is responsible, a project's failure is the project owner's failure. Project owner is sure to suffer losses due to unfulfilled objectives. Losses would be linked to failure status meaning that whether the project had to be scraped, whether the objectives were partially met or the objectives were met at a delayed time. Depending of company's strength the business consequences can range anywhere from company going bankrupt to major delays in future business plans. 

By sure, project fail will make bad reputation to the company and lose in the financial side as well!

I agree with all the answers but would like to ASK.

Why Projects Fail?

In a perfect world every project would be "on time and within budget." But reality (especially the proven statistics) tells a very different story. It's not uncommon for projects to fail. Even if the budget and schedule are met, one must ask "did the project deliver the results and quality we expected?" True project success must be evaluated on all three components. Otherwise, a project could be considered a "failure."

There are many reasons why projects fail; the number of reasons can be found in the following list:

1:- Poorly managed:-  Lack of a solid project plan, Centralized proactive management initiatives to combat project risk, Poorly defined roles and responsibilities, Team weaknesses, Poor communication, Overruns of schedule and cost, Scope creep, Ignoring project warning signs.

2:- Undefined objectives and goals: - Lack of user input, Enterprise management of budget resources, Inadequate or vague requirements, Unrealistic time-frames and tasks, Insufficient resources (funding and personnel), Estimates for cost and schedule are erroneous, No change control process, Inadequate testing processes.

3:- Lack of management commitment:- Lack of organizational support, Provides universal templates and documentation, Stakeholder conflict, Competing priorities, Business politics, Lack of prioritization and project portfolio management, Meeting end user expectations, Bad decisions.

Success and failure is part of life. You will never succeed throughout your life. Failure is inevitable in personal life as well as in the life span of an organization. Failure is a comma, not a full stop. So, let us solve the problem from positive perspective. When the failure is inevitable, the business objective should be immediately redesigned as to minimize loss rather than to maximize profit

So, let us start. We have to be ready to minimize the loss or negative impact of the project failure. We need to take rigorous contingency plan to meet our project objectives (mission) quickly as soon as possible. Contingency plans may be as follows:

1.      Re-schedule the financial payment option to Bank, if any, as soon as possible

2.      Take corrective measure through team building or marketing or product redesign or campaign whatever may be.

3.      Take contingency plan to achieve the project objective within shortest possible time.

4.      Finally, plan a  meeting  to close the project with ”LESSON LEARNED”

One of the important criteria for project selection is the alignment to Goals and Objectives of business.  PM main responsibility to measure and monitor  the project objectives whether its on track or not; and need to take timely action to align the project elements towards the project objective.  Failing to meet the objectives is a project failure and its for entire organization failure, its not only results in the financial losses but also negate the business persistence.  On the other hand, Customer and Consultants satisfaction and trust reduced to almost nil, in this condition its difficult to re-establish for organization to take similar projects in the future.

Consequences of fail project!!!!

Consequences for Sr. management, fail project means loss of money and reputation, so management will suffer with two losses.

Consequences for project manager or project team, low moral, loss of reputation, confusion about future, loss of trust etc etc.