Professional Documents
Culture Documents
Chapter 8
Evaluating and Terminating the Project
This chapter discusses the issue of appraising the progress of a project and its
performance and describes the various ways that projects can be terminated. Project
evaluation criteria are listed and discussed. Also, the formal process of auditing a project
is overviewed including the information that should be contained in the audit report.
Guidelines for when to consider terminating a project, the types of project termination,
and the termination process itself are also discussed. The chapter concludes with a
discussion of the project final report.
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a better job in selecting and supporting projects in the future or in terms of what was
learned from the project itself. This article gives advice on how to organize and conduct
postproject appraisals. In addition, it describes four major lessons the involved company
learned from their appraisals.
B.M. Staw et al. Knowing When to Pull the Plug (Harvard Business Review, MarchApril 1987). This article has already become a classic on the psychological basis for
continuing a project invariably headed for disaster. The authors clearly point out the
dangers of certain personality types in project managers matching the needs profile of
certain organizations. In these all-too-frequent situations, projects are continued way past
the point where common sense would have called for their termination.
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evaluations are also less disruptive to the project team. Because of their frequency,
they would also better lend themselves to use as a control device.
7. Except for any confidential personnel items, the project team members should have
access to the full report. Without feedback, the team members are limited in their
growth possibilities.
8. The major value of a post-project audit is to inform senior management of poor
practices that should be avoided in future projects, or of beneficial practices that
should be adopted by future projects. The audit may be required by a customer who
wishes to manage future relationships with the firm.
9. When a general audit exposes a serious problem in the project or in the methods by
which the project was conducted, a detailed audit may be required to study such
problems in detail and recommend solutions.
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selection is a good, but not sufficient, tool for evaluating completed projects and for
helping to determine if a project should be terminated before completion.
15. Major risks associated with the project and their potential impact on the projects
schedule, cost, or performance should be identified. If alternative courses of action
exist that may change future risks, they should also be identified. The parent
organization should also insist on proper ethical standards of behavior from the
project manager, team, and all functional managers connected with the project. A
large majority of the problems referred to in this question concern credit-for-success
and blame-for-failure. If a project succeeds or fails, the success or failure belongs to
the entire team.
16. There is no theoretical correct way of dealing with these problems. Any method of
sharing costs and/or profits that is acceptable to the several functional managers is
acceptable. The method of cost/profit sharing must be accepted prior to initiating the
project. Attempts to solve the problem when the project is completed are doomed.
17. Co-opt means to appropriate as ones own. This is a common tactic for parties
being audited. Passive resistance is advised. The audit team should listen
interestedly to all complaints, advice, etc., and proceed as if the co-opting had not
occurred. Noncommittal is the best attitude for the auditors.
18. Introduction: This is the key to all that follows. It is important to make sure that all
parties are in agreement with the statement of project direct goals and objectives.
Current status: It is also important that all parties agree about the current status of
the project. All direct costs and the actual state of work on the project should be
detailed in this section. This serves as the basis many of the reports
recommendations.
Future project status: Based on the current status section of the report, this section
describes what must be done to complete the project, including any required changes
in budget, schedule, scope, and goals of the project. This serves as a major input in
the decision to continue the project without modification of the plan, continue it with
modifications, or to terminate the project.
Critical management issues: This section allows senior management to exercise
control over any aspects of the project or its management that seem to be desirable.
Senior management may also consider alteration of any project management policies
that appear to be dysfunctional. Management may also install new project
management policies.
Risk analysis and risk management: This allows senior managers to reassess the risks
associated with the project given its current state. This assessment would include
both technological and monetary risk.
Final comments: This section provides information to senior managers about the
underlying assumptions made during data collection as well as the statistical
reliability and validity of the data if such an assessment can be made. The section
may also be used to collect any recommendation that might apply to future projects.
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Construction Costs:
Building
Contingency
Land
Program development & equipment costs
Furniture
A&E Fees @ 5%
Financing costs
Capitalized interest
Site improvements
Phone & IS system
Kitchen equipment
Total
Organizational Costs:
Legal and accounting
Initial marketing
Project consultant
Follow-up Market survey
Total
Total
Budgeted
Estimated Actual at
Completion
Remaining $
6,743,000.00
674,300.00
600,000.00
405,000.00
400,000.00
347,000.00
202,000.00
135,000.00
125,000.00
30,000.00
30,000.00
9,691,300.00
$6,743,000.00
$674,300.00
$600,000.00
$405,000.00
$400,000.00
$347,000.00
$202,000.00
$135,000.00
$147,655.00
$30,000.00
$23,776.00
$9,707,731.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
-$22,655.00
$0.00
$6,224.00
-$16,431.00
25,000.00
250,000.00
80,000.00
20,000.00
375,000.00
$0.00
$0.00
$0.00
$0.00
$0.00
$25,000.00
$250,000.00
$80,000.00
$20,000.00
$375,000.00
10,066,300.00
$9,707,731.00
$358,569.00
The organizational costs can not be reflected in the final budget until the CFO
explains when and how the expenses will be allocated back to the projects budget
for the expenses incurred by the parent organization. The above reflects the
information provided in the case.
2. What should they do about the work slowdown?
The work slowdown is probably being caused by the construction crew because
they have not been informed of their next assignment. They are concerned about
the lack of work after the facility is completed. The project manager needs to
urge the contractor to inform his crew of their next assignment. Kyle also needs
to insist that no additional slowdowns be allowed, and that tighter controls are put
on the system to monitor that the project stays on schedule during the last few
months.
3. Create a Gantt chart with the revisions to the duration of the interior step. When will
the project be completed?
The project will be completed 8/1/01.
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4. What is the importance of the fact that the Hospital staff expenses were not reported
under the project budget?
The importance of the omission of expenses on the project is significant. The
CFO should have provided the PM with the overhead allocations at the beginning
of the project. Those expenses can and will effect the projects budget and need
to be included in the overall project. The PM may not have control over the
expenses but they effect his bottom line and the success of the project in meeting
its budget. This late in the project there is little anyone, include the CEO, can do
to have an impact on the success of the project budgetarily without knowing
these costs.
Datatechs Audit
Teaching Purpose: This case illustrates how many of the topics discussed in previous
chapters can contribute to project failure and perhaps the need to terminate the project
early.
1. To what extent were the problems facing the notebook computer development project
avoidable? What could have been done to avoid these problems?
Indeed, all of the problems noted in the case were avoidable. First, there was no
project planning done on Steves part. This was, in part, due to Steves failure to
recognize significant differences between a minor product line extension project
and a more substantial new product line development project. Furthermore, there
was no team involvement in developing the WBS. Had the team been involved,
the need for a hinge system would probably have been identified. The problem
with manufacturing not being able to produce the notebook computer design
could have been avoided had this group been more involved earlier in the project.
Finally, there is need for a formal change request process. This would have
helped with the VPs request to redesign the computer to work with the new PDA.
2. Would it make sense to apply a project selection model such as the weighted scoring
model to the project to determine if it should be terminated?
Absolutely. Project selection models can be used to determine if a project should
be continued. When used in this fashion, updated information can be entered into
the model and a decision can be made regarding whether it makes sense to
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Test Questions
True/False and Multiple Choice
T 1. ___ A project evaluation measures the projects performance relative to its plan.
F 2. ___ One should evaluate the project only after it is completed.
F 3. ___ The most difficult thing to evaluate is the projects budget and schedule.
T 4. ___ It is a best practice to set the evaluation criteria at the beginning of the project.
F 5. ___ A project audit should only be conducted after the project is completed.
F 6. ___ Audits conducted after the project is finished have little or no value to the
project manager.
T 7. ___ The audit team should establish a relationship with the project team.
T 8. ___ Project team members should be made aware of audits when or before the audit
process is started.
T 9. ___ The method used to terminate a project has a major impact on the work
environment of the organization.
T 10. ___ Termination by addition occurs when the project is made a new part of the
sponsoring organization or its client.
F 11. ___ Termination by integration occurs when the project is made a new part of the
sponsoring organization or its client.
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T 12. ___ Formally ignoring a project by not giving it enough budget and resources is
also known as project starvation.
F 13. ___ Determining the best method for project termination is usually done by the
project manager.
T 14. ___ The process to be followed when terminating a project should be included in
the original project plan.
F 15. ___ The termination manager and the project manager are always the same person.
F 16. ___ It is best to have the project manager assume responsibility as the termination
manager of the project.
T 17. ___ When a project is terminated, the project manager should help with the
reassignment of project personnel.
F 18. ___ In a functional organization, layoffs of project personnel are likely when
projects are terminated.
T 19. ___ The projects final report is a history of the project.
F 20. ___ The project manager should only include objective, measurable data and
findings in the projects final report.
T 21. ___ A primary purpose of the projects final report is to improve future projects.
F 22. ___ Follow-up and communication on the projects performance is of little
importance after the project is completed.
T 23. ___ Project evaluation determines the progress of the project relative to the
objectives of the organization.
F 24. ___ Project evaluation will not increase the cost of the project.
F 25. ___ Team members should not contribute their opinions to or participate in the
project audit because they would bias the findings.
F 25. ___ The primary purpose of the project evaluation is to identify the projects
weaknesses.
T 26. ___ The project auditor must maintain political and technical independence during
the audit.
T 27. ___ A good time for a project evaluation is when major milestones are scheduled
for completion.
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F 28. ___ A financial audit has a broader scope than a project audit.
F 29. ___ In conducting an audit, the auditor must remember not to worry about the
anxiety he may cause the project team.
T 30. ___ All project records and files should be accessible to the audit.
F 31. ___ The primary purpose of the project final report is to determine the success of
the project.
T 32. ___ An official termination should be part of every project.
b 33. ___ What are the ways to terminate a project?
a. Starvation, depletion of resources, distribution and abandonment
b. Extinction, addition, integration, and starvation
c. Neglect, adoption, exterminating and assassination
d. A & C
e. B & D
b 34. ___ Who is best to determine the project termination method?
a. The project team
b. The senior executive termination team
c. The function department managers
d. The project manager
e. The project champion
e 35. ___The termination manager is responsible for which of the following:
a. Check that all work is completed
b. Make sure subcontractors completed work
c. Clear accounts for final billing
d. Determine what documentation to keep on the project
e. All of the above
b 36. ___ The primary purpose of the projects final report is?
a. Document the project
b. Improve future projects performance
c. Keep a diary of the project
d. Serve as an method of project evaluation
e. All of the above
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