Project Management A Managerial Approach Chapter 13 Project Termination

The Varieties of Project Termination 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

Termination by Extinction The project may end because it has been successful and achieved its goals The project may also be stopped because it is unsuccessful or has been superseded A special case of termination by extinction is “termination by murder” which can range from political assassination to accidental projecticide

Termination by Extinction Two important characteristics of termination by murder are the suddenness of project demise and the lack of obvious signals that death is imminent When a decision is made to terminate a project by extinction, the most noticeable event is that all activity on the substance of the project ceases

Termination by Addition If a project is a major success, it may be terminated by institutionalizing it as a formal part of the parent organization Project personnel, property, and equipment are often simply transferred from the dying project to the newly born division The transition from project to division demands a superior level of political sensitivity for successful accomplishment

Termination by Integration This method of terminating projects is the most common way of dealing with successful projects, and the most complex The property, equipment, material, personnel, and functions of the project are distributed among the existing elements of the parent organization

Termination by Integration In general, the problems of integration are inversely related to the level of experience that the parent or client has had with: the technology being integrated the successful integration of other projects, regardless of technology

Termination by Integration A few of the more important aspects of the transition from project to integrated operation that must be considered: Personnel - where will the team go? Manufacturing - is the training complete? Accounting/Finance - have the project’s account been closed and audited? Engineering - are all drawings complete and on file? Information Systems/Software - has the new system been thoroughly tested? Marketing - is the sales department aware of the change?

Termination by Starvation This type of project termination is a “slow starvation by budget decrement” There are many reasons why senior management does not wish to terminate an unsuccessful or obsolete project: Politically dangerous to admit that one has championed a failure Terminating a project that has not accomplished its goals is an admission of failure

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 Fundamental reasons why some projects fail to produce satisfactory answers to termination questions: A project organization is not required Insufficient support from senior management Naming the wrong person as project manager Poor planning These and a few other reasons, are the base cause of most project failures The specific causes derive from these fundamental issues

The Termination Process The termination process has two distinct parts First is the decision whether or not to terminate Second, if the decision is to terminate the project, the decision must be carried out

The Decision Process Decision-aiding models for the termination decision fall into two generic categories: 1. Models that base the decision on the degree to which the project qualifies against a set of factors generally held to be associated with successful projects 2. Models that base the decision on the degree to which the project meets the goals and objectives set for it Just as the decision criteria, constraints, weights, and environmental data are unique to each organization, so are the specifics of using any decision model

The Implementation Process The actual termination can be planned and orderly, or a simple hatchet job Special termination managers are sometimes useful in completing the long and involved process of shutting down a project The primary duties of the manager in charge of termination can be encompassed in nine general tasks

The Implementation Process Duties of the termination manager: Ensure completion of the work, including tasks performed by subcontractors Notify the client of project completion and ensure that delivery is accomplished Ensure that documentation is complete including a terminal evaluation of the project deliverables and preparation of the project’s Final Report Clear for final billings and oversee preparation of the final invoices sent to the client

The Implementation Process Duties of the termination manager (cont.): Redistribute personnel, materials equipment, and any other resources to the appropriate places Clear project with legal counsel or consultant Determine what records to keep Ascertain any product support requirements, decide how each support will be delivered, and assign responsibility Oversee the closing of the project’s books

The Implementation Process Most project managers delay the personnel reassignment/release issue as long as possible for three main reasons: 1. A strong reluctance to face the interpersonal conflicts that might arise when new assignments and layoffs are announced 2. Worry that people will lose interest and stop work on the project as soon as it becomes known that termination is being considered 3. Concern that team members will try to avoid death by stretching out the work as far as possible

The Final Report - A Project History The final report is the history of the project It is a chronicle of the life and times of the project, a compendium of what went right and what went wrong The required information is contained in the master plan, all project audits, and evaluations The precise organization of the report is not of great concern; the content is

The Final Report Several Subjects should be addressed in the final report: Project performance Administrative performance Organizational structure Project and administrative teams Techniques of project management

The Final Report For each element covered in the final report, recommendations for changing current practice should be made and defended Equally important are comments and recommendations about those aspects of the project that worked unusually well The fundamental purpose of the final report is to improve future projects

Summary A project can be terminated in one of four ways: by extinction, addition, integration, or starvation Making a decision to terminate a project before its completion is difficult, but a number of factors can be of help in reaching a decision Studies have shown that the factors associated with project success are different for different industries and the various types of projects

Summary Most projects fail for one or more of the following reasons: Inappropriate use of the project form of organization Insufficient top management support Naming the wrong project manager Poor planning

Summary Success-related factors, or any factors management wishes, can be used in termination decision models Special termination managers are often used, and needed, for closing out projects This task, consisting of eight major duties, is a project in itself

Summary The project Final Report incorporates the process knowledge gained from the project In addition to preservation of project records, the Final Report embodies the experience from which we learn The Final Report should include: project performance comments, administrative performance comments, organizational structure comments, personnel suggestions

Project Termination Questions?

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Project Termination Table Files

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