Project Termination: All Things Come to an End

1. Chapter 12 Project Termination

2. ProjectTermination AllThingsCometoanEnd 2

3. Introduction • All projects end • The objectives have been completed • Some project teams move on to other projects • Other times, members goes their own way

4. AllThingsCometoanEnd Termination –Impactonotherareas –Planandexecuteterminationwithcare 3

5. WhenDoProjectsTerminate? Upon successful completion, –or... When the organization is no longerwillingtoinvest 4

6. MostCommonReasonsProjectsTerminate 1. Low probability of success2. Low profitability 3. Increasing cost 4. Change in competitive factors 5. Un-resolvable technical problems6. Higher priority 7. Schedule delays Source: Dean, 1968 5

7. 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

8. The Varieties of Project Termination • Termination by extinction • Termination by addition • Termination by integration • Termination by starvation

9. Termination by Extinction • Extinction occurs in any scenario where the project goes away • Successful • Unsuccessful • Changes in environment • When work on a project stops, some organizational work continues

10. Termination by Addition • Applies to an in-house project • When the project is successful, it is institutionalized • While the project goes away, project personnel and assets are transferred to the new business

11. Termination by Integration • The most common way to terminate a project • The project comes into the business • It is absorbed into the existing structure • That structure absorbs the assets of the project

12. Termination by Starvation • Termination by starvation involves greatly reducing the budget of a project • There are many reasons why senior management does not wish to terminate an unsuccessful or obsolete project: • Used when it is politically dangerous to cancel a project • Terminating a project that has not accomplished its goals is an admission of failure

13. A Project is said to be terminated WHEN: • Work on the substance of the project has ceased or slowed to the extent that further progress on the project is no longer possible. • Project is indefinitely delayed. • Resources have been deployed to other projects.

14. Non-Technical Reasons for Termination • Political • Cross-cultural • Senescence

15. When to Terminate a Project • Some questions to ask when considering termination: • Has the project been hindered 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?

16. When to Terminate a Project WHEN: • Work on the substance of the project has ceased or slowed to the extent that further progress on the project is no longer possible. • Project is indefinitely delayed. • Resources have been deployed to other projects. • Fundamental reasons why some projects fail to produce satisfactory answers to termination questions: • Insufficient support from senior management • Naming the wrong person as project manager • Poor planning

17. 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

18. The Termination Process • Must first decide to terminate • Next, must carry out the decision to terminate

19. The Decision Process • Sunk costs are not relevant to the decision about terminating a project • The main issue is if the cost to finish is more/less than the value of the project when finished

20. The Implementation Process • The actual termination can be planned and orderly. • 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

21. 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

22. 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

23. 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

24. The Implementation Process • Termination can be orderly • Planning for an implementing an orderly shut down yields better results • Who leads the shut down project • A special termination manager may be used

25. Things to Do • Insure tasks are completed • Notify the client • Finish the paperwork • Send out final invoices to the client • Redistribute resources • Clear with legal • Determine what records to keep • Assign support • Close the project books

26. The Final Report—A Project History • Project performance • Administrative performance • Organizational structure • Project and administrative teams • Techniques of project management

27. 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

28. 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

29. 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

30. 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