Project Close-Out and Termination Chapter 14
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.
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 Execution Termination Planning
Conceptualization Planning Execution Termination Project Life Cycles and Their Effects Client Interest Project Stake $ Resources Creativity Uncertainty
Triple Constraint of Project Success ------------------ Quadruple • Have we been successful in each of these? • We have reached a natural termination point • Let’s start the pizza party! Client Acceptance Budget Success Schedule Performance
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.
Harvesting the Benefits Handing Finishing Gaining Over the The Work Acceptance Product Reviewing How for the Product It All Went Putting it All to Bed Disbanding the Team 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 • Formal announcement of project closure • Uneasiness may occur with some team members • Verify team members have received a positive “psychosocial” outcome • 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?” • The organization begins to realize a positive outcome from the project • Develop an assessment system • 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
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
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
Why are Project Closeouts Difficult? • Project sign off can stop future “final” work • Multi-tasking on projectscause 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
Project Termination Issues Emotional Intellectual Internal External Staff Client
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
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
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
Claims & Disputes • Two types of claims • Ex-gratia claims • Default by the project company Resolved by • Arbitration • Binding • Non-binding • Standard litigation
Protecting Against Claims • Consider claims as part of the project plan • Verify stakeholdersknow their risks • Keep good recordsthroughout the life cycle • Keep clear detailsof change orders • Archive all correspondence
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
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?
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?