Project management a managerial approach chapter 13

Project Management: A
Managerial Approach
Chapter 13 – Project Termination
© 2006 John Wiley


Overview
•
•
•
•
•

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

© 2006 John Wiley


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
• There are four fundamentally different ways to
close out a project: extinction, addition,
integration, and starvation

© 2006 John Wiley


Project Termination Factors
1. Low Probability
–
–
–

Technical Objectives
Commercial Viability
ROI Achieved

2. No Solution
–
–

Engineering Design
Lasting Process

3. Intellectual Property Issues
© 2006 John Wiley


Project Extinction
• All (substantive) activity ceases
• Stopped:
– Successful
• Met goals

– Unsuccessful
• Failed tests

– Superceded
• External event

• “Extinction by Murder”
– Political assassination; “projecticide”
– Mergered redundancy
© 2006 John Wiley


Project Addition
• Project becomes a part of organization
– New functionality
– “Protected” status

• Transfer of assets
– People
– Equipment

• Addition of responsibilities
– Budgets
– Practices and procedures
– “P&L”
© 2006 John Wiley


Project Integration
• Most Common

• Most Complex
• Project Outcome(s) Become(s):
– Part of Acquiring Organization
– Redistribution of Residual Resources
• Equipment
• Capital Improvements
• Follow-on Support
© 2006 John Wiley


Project Starvation
• Budget Decrement
• Reallocation of Resources Away from Project
– Business Conditions
– “Political” Considerations

• Active w/o Activity

© 2006 John Wiley


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?
© 2006 John Wiley


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

© 2006 John Wiley


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
© 2006 John Wiley


Project Termination Decision Tree
Internal Info
Systems

External Info
Systems

Decision
Database(s)

Termination
Rules
Continue
Project

Termination
Keep

Uncertain

Decision? Terminate

Sensitivity
Analysis

Termination

Procedures

© 2006 John Wiley


Project Termination Areas
P r o je c t C lo s e o u t
O r g a n iz a t io n

F in a n c ia l

P u r c h a s in g

S ite

C lo s e o u t M t g
P la n s
P e rs o n n e l

P a y a b le s
R e c e iv a b le s
B u d g e t R e p o rt

C o n tra c ts
S u p p lie r C o m m
F in a l P a y m e n ts

C lo s e F a c ilitie s
D is p o s e E q u ip /M a t 'l

© 2006 John Wiley


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
© 2006 John Wiley


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

© 2006 John Wiley


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

© 2006 John Wiley


The Final Report
• Focus area recommendations
• “Lessons learned”
– Benchmarks
– Killers

• Goal: Future project management
improvement

© 2006 John Wiley

Copyright 2006 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this work beyond that permitted in section 117
of the 1976 United States Copyright Act without express permission of the copyright owner is
unlawful. Request for further information should be addressed to the Permissions Department,
John Wiley & Sons, Inc. The Publisher assumes no responsibility for errors, omissions, or
damages caused by the use of these programs or from the use of the information herein.

© 2006 John Wiley