Project termination
Project success means that the project has met its cost, schedule, and technical performance objectives and has been integrated into the customer's organization to contribute to the customer's mission.
Project failure means that the project has failed to meet its cost, schedule, and technical performance objectives, or it does not fit in the organization's future.
Project termination reasons
1. The project results have been delivered to the customer
2. The project has overrun its cost and schedule objectives 3. The project owner's strategy has changed 4. The project's champion has been lost 5. Enviromental changes that affect the project 6. Advances in the state of the art hoped for in the project has not been realized 7. The project's priority is not high enough to survive in the competition
Example
Chrysler scrapped a development project for a new luxury car. Code named LX, the car would have been the flagship of the Chrysler fleet. After much consideration they saw that the competition on the market would be much more higher than anticipated rendering the project unprofitable according to their project planning.
Why Terminate?
The termination decision usually does not come up at any specific instant but rather develops slowly during the life cycle of the project Project termination should not be considered a failure, but a strategic decision implemented when a project does not or may not support the organizational strategies
People often cloud their judgement in the site of failure
Example of strategic decision
The Boeing Company canceled a project to build a pair of superjumbo jet models in favor of shifting a strategy to battle archival Air Bus Industry in offering smaller and higher-performance versions of its existing aircraft. The jet would be a 747 version which could carry 500 more passengers and travel distances of as many as 10,000 miles. Another reason for cutting out the project was insufficient customer interest to justify the development expenditure.
Project termination problems: Emotional
Fear of no future work
Loss of interest in task remaining Loss of project-driven motivation Loss of team identity Selection of personnel to be reassigned
Reassignment methodology
Division of interest
Project termination problems: Intellectual
Identification of remaining deliverable end products
Certification needs Identnification of outstanding commitments Control of charges to the project Screening of uncompleted tasks not needed
Closure of work oredrs and work packages
Identification of physical facilities assigned to the project Identification of project personnel
Project termination problems Emotional Staff
Fear of no future work Loss of interest in tasks remaining Loss of projectdelivered motivation Loss of team identity Selection of personnel to be reassigned Reassignment methodology Diversion of effort
Intellectual Client
Change in attitude Loss of interest in project Change of personnel dealing with project Unavailiability of key personnel
Internal
Identification of remaining deliverables Certification needs Identification of outstanding commitments Control of charges to project Screening of uncompleted tasks not needed Closure of work oredrs and work packages Identification of physical facilities assigned to project Identification of project personnel Accumulation and structuring of project historical data Disposing of material of project
External
Aggrement with client on remaining deliverables Obtaining needed certifications Agreement with suppliers on outstanding commitments Communicating closures Closing down physical facilities Determining external requirements (client/organization) for audit trail data
Strategic implications
During a project's life cycle reviews should be done and questions should be answered in order to evaluate its status on time, cost, and technical performance factors, as well as how that project stands in regard to the organizational strategies that it supports If the project isn't one with the organizational strategies then project termination should be considered
Examples of failures
Project teams tend to become attached to their project. Such attachment may result in the continuation of problematic project's that otherwise should have been terminated. One example is Washington Public Power Supply System. Other examples are many nuclear power plants which had early difficulties and even after many years of investment and effort have not become operational
Reasons for not terminating a project
Psychological factors clouding the judgement of managers
Project's termination costs Overconfidence and misconception for solving short-term problems Current organizational policy rewarding when problems are been fixed
Social pressure
The notion that projects are supposed to succeed, not fail
Termination should be considered when
There are serious cost and schedule overruns
Technical performance is compromised, or technical risks are too great
The project does not have a strategic fit in the sponsoring organization's future
The customer's strategy has changed
Competition has made or threatens to make the project results obsolete
The purposes for which the project was originally established have changed
Projects in trouble
When projects are in trouble outside audits should be performed from indepentent teams and full disclosure is expected from the project team The results of such audits could determine the specific project part that is failing to perform correctly and actions can be taken for redesigning, fixing etc..
Vital questions that should be asked
1. Does the project involve pioneer technology?
2. Is it a new project, and what experience has the project manager had in implementing this sort before?
3. Is it a bigger project than the company has handled before?
4. Was the costing done on the project before the design was completed?
As Davis suggests according to his questions if there are affirmative answers then there is a high probability for serious overrun.
Termination strategies
During termination some senior managers will replace the project manager with an individual who is skilled at closing out projects. He then will conduct reviews to determine the status of the work packages
In addition he has to: - Ensure that all project deliverable end products have been provided to the project owner - Review the status of all contracts - Work with the project team in developing and distributing a closeout plan
Termination Strategies
- Maintain an ongoin surveillance of the closeout activities - Notify relevant stakeholders of the termination - Ensure that all financial matters on the project have been satisfactorily terminated - Assist members of the project team to find other work in the organization - Prepare the project history, particularly a lesson learned report - Conduct a postcompletion audit of the project to identify strengths and weaknesses in the management
Evaluation of termination possibilities
Review the project and its strategic context on a regular basis
Recognize the psychological and social forces that motivate one to stay on course Recognize that there is a prevailing belief and cultural force that encourage the commitment of more resources to solve current difficulties and ensure success Consider replacement of the project manager Listen carefully to the concerns of others about the project
etc..
Termination procedures
Archibald suggest the use of checklist which provide the following benefits: - Clearly indicate the closeout function and responsibilities, reducing ambiguity and uncertainty - Reduce overlooking of important factors - Permit closeout progress to be monitored - Aid project team members with little or no experience in closing out a project - Inform project team members about the activities of others during the closeout phase
Termination procedures
Kerzner and Thamhain suggest a sample listing of typical activities in six areas: 1. Documentation 2. Contract administration 3. Financial management 4. Program management 5. Marketing 6. Final management review
Posttermination Activities
Continuing service, maintanance, and logistic support are follow-up services that can be more profitable than the work of completing the project itself
Postaudit activities can help managers with other future projects
Project termination should state clear what the project accomplished or did not accomplish
British Petroleum example
BP conducts a postproject appraisal of its major projects. Since the inception of PPAs in 1977, the company has appraised more than 80 of its project investments worldwide, including onshore and offshore construction projects, acquisitions, divestments, project cancellations, research projects, diversification plans, and shipping activities. The appraisals are done to improve company performance.
