Download Chapter 13: Project Termination

Project Management: A
Managerial Approach
Chapter 13 – Project Termination
All Things Come to an End . . .
• Termination rarely has much impact on
technical success or failure . . .
• But a huge impact on other areas
– Residual attitudes toward the project (client,
senior management, and project team)
– Success of subsequent projects
• So it makes sense to plan and execute
termination with care
When Do Projects Terminate?
• Upon successful completion, or . . .
• When the organization is no longer willing to
invest the time and cost required to complete the
project, given its current status and expected
outcome.
• A project can be said to be terminated when work
on the substance of the project has ceased or
slowed to the point that further progress is no
longer possible.
Most Common Reasons Projects
Terminate
1.
2.
3.
4.
5.
Low probability of technical/commercial success
Low profitability/ROI/market potential
Damaging cost growth
Change in competitive factors/market needs
Unsolvable technical problems: no solution
Engineering Design
Lasting Process
6. Higher priority of competing projects
7. Schedule delays
8. Intellectual Property Issues
Project Termination Conditions
• There are four fundamentally different ways
to close out a project:
–
–
–
–
Extinction
Addition
Integration
Starvation
Four Varieties of Project
Termination
1. “Termination by extinction”
– Project has successfully completed, or it has failed
• Successful - Met goals
• Unsuccessful - Failed tests
• Superceded - External event
• All (substantive) activity ceases
– Stopped:
– Natural passing, or “termination by murder”: Political
assassination; “projecticide”; “Extinction by Murder”
– Either way, project substance ceases, but much work
needs to be done
– Administrative, Organizational
Four Varieties of Termination
(cont’d)
2. “Termination by addition”
– The project becomes a formal part of the
parent organization
• People, material, facilities transition
• New functionality
• Transfer of assets, People, Equipment
– Addition of responsibilities
• Budgets
• Practices and procedures
Four Varieties of Termination
(cont’d)
3. “Termination by integration”
– Project assets are distributed to and absorbed by the
parent
– Most Common
– Most Complex
– Project Outcome(s) Become(s):
• Part of Acquiring Organization
• Redistribution of Residual Resources
– Equipment
– Capital Improvements
– Follow-on Support
Four Varieties of Termination
(cont’d)
4. “Termination by starvation”
– Withdrawal of “life support”
– Can save “face,” avoid embarrassment, evade
admission of defeat
– Budget Decrement
– Reallocation of Resources Away from Project
• Business Conditions
• “Political” Considerations
• Active w/o Activity
When to Terminate a Project
• Some questions to ask when considering termination:
– Has the project been obviated by technical advances?
– Is the output of the project still cost-effective?
– Is it time to integrate or add the project as a part of regular
operations?
– Are there better alternative uses for the funds, time and
personnel devoted to the project?
– Has a change in the environment altered the need for the
project’s output?
When to Terminate a Project
• Reasons projects fail:
–
–
–
–
Project organization is not required
Insufficient support from senior management
Wrong person as project manager
Poor planning
The Termination Process
• Components of termination process
– Whether or not to terminate
• Goal/Objective-based
or
• Qualification factors
– If terminate:
•
•
•
•
Carry out termination procedures
Planned
Orderly
Procedures vary
Typical Termination Activities
• In general, there are seven categories of
termination tasks. Examples of activities:
– 1. Personnel
• Dealing with “trauma of termination”
• Finding “homes” for the team
• Who will “close the doors?”
– 2. Operations/Logistics/Manufacturing
• Rethinking systems
• Provisions for training, maintenance, spares
Termination Activities (cont’d)
• 3. Accounting and Finance
– Accounts closed and audited
– Resources transferred
• 4. Engineering
– Drawings complete/on file
– Change procedures clarified
Termination Activities (cont’d)
• 5. Information Systems
– Configuration and documentation in place
– Systems integrated
• 6. Marketing
– Sales and promotion efforts in line
• 7. Administrative
– All organizations aware of change
Project Termination Areas
The Implementation Process
• Duties of the termination manager:
–
–
–
–
–
–
–
–
Complete all remaining work
Notification to & acceptance by client
Complete documentation (accurately!)
Final payments
Redistribute assets
Legal Review
Files & Records
Follow-on support
Project History
• One of the major aims of termination is
development and transmittal of “lessons
learned” to future projects
• One way to do that is through a project
history
Contents of a Project History
• 1. Project Performance
– What was achieved; successes, challenges, failures
• 2. Administrative Performance
– Reports, meetings, project review procedures; HR,
financial processes
• 3. Organization Structure
– How structure evolved, how it aided/
impeded progress
Contents of a Project History
(cont’d)
• 4. Project and Administrative Teams
– Performance of the project team,
recommendations
• 5. Project Management Techniques
– Planning, budgeting, scheduling, risk
management, etc.: what worked, what didn’t
The Final Report - A Project History
• Historical recap
• Project “biography”
– “The Good, the Bad, and the Ugly”
• Previous documents
– Project plan
– Audit(s)
– Change orders
The Final Report
• Focus areas:
– Project performance
– Administrative performance
– Organizational structure
– Project and administrative teams
– Techniques of project management
The Final Report
• Focus area recommendations
• “Lessons learned”
– Benchmarks
– Killers
• Goal: Future project management
improvement
Challenges to Meaningful Project
Histories
• Since the project history has so much potential
benefit, why is it often done poorly, or not at all?
• Possible reasons
– No one sees it as their job
– PM has many other priorities, especially as project
winds down
– Long duration projects mean many PMs, voluminous
record, little corporate memory
– PMs may be more attuned to looking forward than
looking back