Project Auditing Project Termination

1. MGMT 483 WEEK 13 Project AuditingProject Termination

2. Project auditing • Project auditing: a formal inquiry into any aspect of the project chosen by management. • The audit process is a thorough examination of the management of the project and includes a formal report • Studying the project also fulfills the spirit of TQM in that it produces a set of recommendations that can be applied to future projects.

3. Purposes of evaluation – goals of the system • One major element typically evaluated in an audit is the project’s success. • Success often has four dimensions with regards to a project: • Efficiency – a measure of the project’s success at meeting cost and schedule goals. • Customer impact/satisfaction – a measure of how well the project met the customer’s needs. • Business/direct success – a measure of the commercial success of the project. For projects that create a product, this might be a measure of its market share. For internal projects, this could be measures of process improvements or quality. • Future potential – a measure of how well the project developed new technology or opened a new market.

4. Auditing ancillary project goals • In addition to the obvious goals identified in the project Statement of Work, typically there are many ancillary goals. Eg: training future project managers • Discovering, let alone evaluating, the project’s ancillary goals can be difficult for several reasons: • It is difficult (impossible?) to measure performance against an unknown goal. • The ancillary goals may be unique and personal to the project’s cast of players. They may be reluctant to reveal them because they may not directly relate to the objectives of the organization. • The project team may not trust the auditor/evaluator enough to reveal the ancillary goals. • The priorities team members place on the ancillary goals may be very different and keeping them hidden allows the team to avoid conflict.

5. PROJECT TERMINATION • Since, by definition, projects always have an end, termination is an important part of the project management process.

6. The Varieties of Project Termination • A project terminates when activity slows to the point where no meaningful work is taking place. This may be because resources have been redeployed, the project is indefinitely delayed, or the work is done. • There are four different ways a project can terminate: • Extinction • Addition • Integration • Starvation

7. 4 ways of terminating a project • Extinction – The project stops or is stopped. The halt may be because the project successfully completes its tasks or because senior management loses interest and stops further work. While work on the substance of the project can be halted suddenly, there still will be tasks to complete to put the project to its final rest. (A subset of this is Termination by Murder. This is termination suddenly and without warning, usually for a cause not related to the project’s purpose.)

8. 4 ways of terminating a project • Addition – The project stops, but its work and often its people are transformed into a new part of the organization. This new organization then becomes part of the day-to-day operation of the organization, with all its attendant policies, procedures and rules. • Integration – The project stops, but its work is integrated into ongoing processes or products within the organization. This is most common for an internal process improvement project, where the results contribute to the improvement of day-to-day operations. • Starvation – The project winds down to nothing because resources are taken away. Often the resources are cut incrementally because a project has lost favor, but for political reasons, the project is not overtly “murdered.”

9. When to terminate a project • The decision to terminate a project early, by whatever method, is difficult • Questions that could be used to determine if a project should be terminated: • Is the project still consistent with organizational goals? • Has the project lost its key person or champion? • Can the results be purchased more efficiently from outside the company?

10. The termination process • The process has two elements: • The decision to terminate • The implementation of the termination • The Decision Process – There are two types of decision models that can be used to aid the decision process: • those that measure against standard success factors • those that measure against the project’s specific goals. • In either case, the bottom line decision, at any point in the project’s life cycle, comes down to whether the organization is willing to invest the time and resources necessary to complete the project.

11. The implementation of the termination process • The termination process, whether large or small, can be summarized in the following nine tasks: • Ensure completion of the project’s work. • Notify the client of project completion. • Ensure that documentation is complete. • Ensure that the final invoice is sent to the client. • Redistribute project resources. • Clear the project with legal counsel. • Determine what records to keep and arrange for appropriate storage. • Determine any long-term product support requirements. • Oversee the closing of the project’s books.

12. Particular HR issues for the PM • The PM needs to assist in the placement of project personnel in their next job. • This must be coupled with prevention of team members from prematurely abandoning the project or stretching out the remaining work.

13. The Final Report – A Project History • Future projects will benefit from a well-written history of completed ones. • The goal of the report is to discuss process improvements that will benefit future projects.

14. Elements of the final report • The final report should include descriptions and analysis of the following: • Project Performance • Administrative Performance • Organizational Structure • Project and Administrative Teams • Techniques of Project Management

15. Incident for discussion • Electrical Broom and Supply Company • Page 570 • If you were the consultant, what would you recommend to Mr. Bretting? Would you continue the relationship?