1 Project Management: A Managerial Approach Chapter 13 – Project Termination

2 Overview Methods of Project Termination Methods of Project Termination Early Project Termination Early Project Termination Project Shortcomings Project Shortcomings PM Responsibilities PM Responsibilities Project Final Report Project Final Report

3 Project Termination Conditions 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 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 There are four fundamentally different ways to close out a project: extinction, addition, integration, and starvation There are four fundamentally different ways to close out a project: extinction, addition, integration, and starvation

4 Project Termination Factors 1. Low Probability –Technical Objectives –Commercial Viability –ROI Achieved 2. No Solution –Engineering Design –Lasting Process 3. Intellectual Property Issues

5 Project Extinction All (substantive) activity ceases All (substantive) activity ceases Stopped: Stopped: –Successful Met goals Met goals –Unsuccessful Failed tests Failed tests –Superceded External event External event “Extinction by Murder” “Extinction by Murder” –Political assassination; “projecticide” –Mergered redundancy

6 Project Addition Project becomes a part of organization Project becomes a part of organization –New functionality –“Protected” status Transfer of assets Transfer of assets –People –Equipment Addition of responsibilities Addition of responsibilities –Budgets –Practices and procedures –“P&L”

7 Project Integration Most Common Most Common Most Complex Most Complex Project Outcome(s) Become(s): Project Outcome(s) Become(s): –Part of Acquiring Organization –Redistribution of Residual Resources Equipment Equipment Capital Improvements Capital Improvements Follow-on Support Follow-on Support

8 Project Starvation Budget Decrement Budget Decrement Reallocation of Resources Away from Project Reallocation of Resources Away from Project –Business Conditions –“Political” Considerations Active w/o Activity Active w/o Activity

9 When to Terminate a Project Some questions to ask when considering termination: 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?

10 When to Terminate a Project Reasons projects fail: Reasons projects fail: –Project organization is not required –Insufficient support from senior management –Wrong person as project manager –Poor planning

11 The Termination Process Components of termination process Components of termination process –Whether or not to terminate Goal/Objective-based Goal/Objective-basedor Qualification factors Qualification factors –If terminate: Carry out termination procedures Carry out termination procedures Planned Planned Orderly Orderly Procedures vary Procedures vary

12 Project Termination Decision Tree Sensitivity Analysis Internal Info Systems External Info Systems Decision Database(s) Termination Rules Continue Project Termination Decision? Termination Procedures Uncertain Keep Terminate

13 Project Termination Areas

14 The Implementation Process Duties of the termination manager: 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

15 The Final Report - A Project History Historical recap Historical recap Project “biography” Project “biography” –“The Good, the Bad, and the Ugly” Previous documents Previous documents –Project plan –Audit(s) –Change orders

16 The Final Report Focus areas: Focus areas: –Project performance –Administrative performance –Organizational structure –Project and administrative teams –Techniques of project management

17 The Final Report Focus area recommendations Focus area recommendations “Lessons learned” “Lessons learned” –Benchmarks –Killers Goal: Future project management improvement Goal: Future project management improvement