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. Low probability of technical/commercial success 2. Low profitability/ROI/market potential 3. Damaging cost growth 4. Change in competitive factors/market needs 5. 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by extinction” –Project has successfully completed, or it has failed Successful - Met goals Unsuccessful - Failed tests Superceded - External event All (substantive) activity ceases –Stopped: –Natural passing, or “termination by murder”: Political assassination; “projecticide”; “Extinction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