1. Project Close-Out and Termination
Chapter 14

2. Learning Goals
Distinguish among the four main forms of project termination.
Recognize the seven key steps in formal project closeout.
Understand key reasons for early termination of projects.
Know the challenges and components of a final project report.

3. Project Life Cycle
Conceptualization - the development of the initial goal and technical specifications.
Planning – all detailed specifications, schedules, schematics, and plans are developed.
Execution – the actual “work” of the project is performed.
Termination – project is transferred to the customer, resources reassigned, project is closed out.
Man Hours
Conceptualization
Planning
Execution
Termination

4. Project Life Cycles and Their Effects
Client Interest
Conceptualization
Planning
Execution
Termination
Project Stake $
Resources
Creativity
Uncertainty

5. Triple Constraint of Project Success
Client
Acceptance
Quadruple
Budget
Have we been successful in each of these?
We have reached a natural termination point
Let’s start the pizza party!
Schedule
Performance
Success

6. Four Reasons for Project Termination
Project Termination - all activities consistent with closing out the project
Termination by extinction
Stopped due to either a successful/unsuccessful conclusion
Budget audited, resources re-assigned
Termination by addition
Becomes a part of a formal business process
Termination by integration
Resources are reabsorbed into the organization
Termination by starvation
Remove resources available to the point where no work is occurring
Not all projects are stopped because they have achieved the original intended goals.

7. Seven Elements of Project Closeout Management Model
Archive project documentation and contracts
Close cost accounts and audit budgets
All personnel and services paid
Stakeholders sign off on the project
Putting it All to Bed
Disbanding the Team
Finishing
Handing
Gaining
Acceptance
for the
Product
Harvesting the Benefits
Reviewing How
The Work
Over the
It All Went
Formal announcement of project closure
Uneasiness may occur with some team members
Verify team members have received a positive “psychosocial” outcome
The organization begins to realize a positive outcome from the project
Develop an assessment system
Project details are cleaned up
Team members lose focus
Project manager must keep interest high
Use of “final” checklist may help
Client accepts the project outcome
Team should brainstorm in advance on “Why would the customer not accept this project?”
A formal transfer of ownership
Provide training, drawings, etc
May need to prove project item works (BOT- Build, Operate, Transfer)
May be a project within itself
Perform lessons learned analysis
Time

8. Guidelines for Project Closeout
Include closeout in the WBS and the schedule
Use a closeout checklist
Have a detailed closeout plan
Preserve the team identity and continue with weekly status meetings
Provide performance feedback
Reward team members
Take a trip for feedback and formal closeout with remote team
Create a final project report to communicate to stakeholders
Schedule a formal closeout review meeting or project audit
Document lessons learned
Celebrate success

9. Lessons Learned Meetings
Meeting Guidelines
Establish clear rules of behavior to promote interaction
Describe objectively what occurred
Fix the problem, do not blame
Common Errors
Misidentifying systematic errors as special cause
Misinterpreting lessons and wrongly perceiving the source of the problem
Failure to pass along lessons learned conclusions and repeating the same failures

10. Lessons Learned Report

11. Why are Project Closeouts Difficult?
Project sign off can stop future “final” work
Multi-tasking on projects cause shortcuts on project closure activities
Close out activities are given a low priority
Lessons learned analysis seen as a “check the box” process
Projects viewed as unique create the perception that lessons learned cannot be transferred from project to project

12. Project Termination Issues
Emotional
Intellectual
Internal
External
Staff
Client

13. Project Termination Issues - Emotional
Staff
Client
Fear of no future work
Change in attitude
Loss of interest in remaining tasks
Loss of interest in project
Loss of project-derived motivation
Change in personnel dealing with project
Loss of team identity
Unavailability of key personnel
Selection of personnel to be reassigned
Diversion of effort

14. Project Termination Issues – Intellectual
Internal
External
Identification of remaining deliverables
Agreement with client on remaining deliverables
Certification needs
Agreement with suppliers on outstanding commitments
Identification of outstanding commitments
Communicating closure
Control of changes to project
Closing down facilities
Closure of work orders and work packages
Disposal of unused material

15. Early Termination for Projects
What makes a project a candidate for early termination? A major change in
Image, political, and cost factors
Task-team issues
Sponsorship
Economics
Business, political, technological environment
User demand

16. Early Termination Decision Rules
When costs exceed business benefits
When the project no longer meets strategic fit criteria
Deadlines are continually missed
Technology evolves beyond the project’s scope

17. The Top 10 Signs of Project Failure
10. Best practices and lessons learned are ignored
9. Project lacks people with appropriate skills
8. Sponsorship is lost
7. Customers are resistant
6. Deadlines are unrealistic
5. Business needs change
4. Chosen technology changes
3. Project changes are poorly managed
2. Scope is ill-defined
1. Project managers don’t understand users’ needs

18. Claims & Disputes Two types of claims Resolved by Arbitration
Ex-gratia claims
Default by the project company
Resolved by
Arbitration
Binding
Non-binding
Standard litigation

19. Protecting Against Claims
Consider claims as part of the project plan
Verify stakeholders know their risks
Keep good records throughout the life cycle
Keep clear details of change orders
Archive all correspondence

20. Final Report The administrative record of the completed project.
A valuable document that should be used as a lessons learned for future projects.
Elements of the report should include +/Δ on:
Project performance
Administrative (systems) performance
Organizational structure
Team performance
Project management techniques
Benefits to the organization and customer

21. Discussion Questions
Why is the decision to terminate a project often as much an emotional one as an intellectual one?
Comment on the different methods for project termination. How have you seen an example of one of these methods, through either your school or work experience?
Why do so many projects end up terminated as a result of “termination through starvation?” Discuss the role that ego and power and politics play in this form of termination.
Consider the case on the Boeing Sonic Cruiser from the introductory vignette. Take either the position that this represented a good or bad business decision by Boeing. Argue your case.
Why do “lessons learned” programs often fail to capture meaningful information that could help guide future projects?

22. Discussion Questions
Comment on the following statement: “In deciding on whether or not to kill a project, it is critical to continually monitor the environment for signs it may no longer be viable.”
Refer to the box on Research in Brief. In your opinion, why is it so difficult to bring IT projects to successful completion? In other words, identify some reasons why their cancellation rate is 40%.
Imagine you are a project team member on a project that has been missing deadlines, not producing the technological results hoped for, and is a source of problems between your team and the customer. You have just been informed that the project is being cancelled. In what ways is this good news and how would you view it as bad news?