Chapter 8

Evaluating and Terminating the

Project

8.1EVALUATION

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Background

• A project evaluation appraises the progress and performance relative to the project’s initial or revised plan.

• Also appraises project against goals and objectives set for it during selection process.

• Projects should be evaluated at a number of crucial points.

• Purpose is to improve process of carrying out project.

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Evaluation Criteria

• Original criteria for selecting and funding

project

• Success to date

• Business/ Direct Success

• Future Potential

• Contribution to Organization’s Goals

• Contribution to Team Member Objectives

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Measurement

• Measuring performance against planned

budgets and schedules straightforward

• Earned value analysis more complicated

8.2PROJECT AUDITING

EUT 443 Project Management

Introduction

• An examination of the entire project at any level of depth.

Early audits tend to focus on more technical aspects of

the project while later audits focus on schedule and cost.

• The audit team must have full access to project data and

staff familiar with the project, including the project team.

• The final audit report should be written with a

professional and constructive tone

• Include following sections: Introduction, Current Status,

Future Status, Critical Management Issues, Risk Analysis

and Risk Management, plus Final Comments.

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The Audit Process• Timing depends on purpose

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The Audit Process

• Three Levels

– General Audit

• brief investigation of project essentials constrained

by time and cost

– Detailed Audit

• initiated if the general audit finds something that

needs further investigation

– Technical Audit

• performed by a person or team with special

technical skills

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Steps in Project Audit

• Familiarize audit team with requirements of

project

• Audit the project on-site

• Write up audit report in the required format

• Distribute report

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Behavior Aspects in Auditing

• Audit team must have free access to anyone with knowledge of the project

• Project team members rarely trust auditors

• Audit team must understand politics of project team

• Information use in report must be confirmed

• Project team should be made aware of in-process audit

• No judgmental comments be made during process

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The Audit Report (Format)

• Introduction

– description of project and its goals

• Current Status

– comparison of work completed and planned

• Future Project Status

– conclusions regarding project progress

– recommendations for changes

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The Audit Report continued

• Critical Management Issues

– issues senior management should monitor

• Risk Analysis and Risk Management

– potential for project failure and monetary loss

• Final Comments

– caveats, assumptions, limitations

8.3PROJECT TERMINATION

EUT 443 Project Management

When to Terminate a Project

• Sunk Cost Approach

– whether organization is willing to invest the

time and cost required to complete the project

• Two Other Criteria

– the degree to which the project has met its

goals

– the degree to which the project qualifies

against a set of factors associated with

success or failure

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Major Contribution of Project’s Failures

1. Low probability of achieving technical objectives or

commercializing results

2. Technical or manufacturing problems cannot be solved

with available R & D skills

3. Higher priority of other projects requiring R& D labor or

funds

4. Low profitability or return on investment

5. Too costly to develop as individual product

6. Low market potential

7. Change in competitive factors or market needs

8. Too long a time required to achieve commercial results

9. Negative effects on other projects or products

10.Patent problems

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Types of Project Termination

• Project Extinction

– project activity suddenly stops

– either successfully completed or high

expectation for failure

• Termination-By-Addition

– becomes a NEW formal part of organization

• Termination-By-Integration

– becomes STANDARD (existing) part of

operating systems

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Types of Project Termination continued

• Termination-By-Starvation

– a project in name only

– often occurs when it is impolitic to terminate a

project

– “time forgotten”

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The Termination Process

• Decision made by broad based committee

of senior managers

• Termination process should be specified in

structured project plan

• Termination Manager appointed

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Figure 8-3 A Termination Project Plan

EUT 443 Project Management

The Project Final Report

• Project Performance

– what was achieved and reasons for resulting

performance

• Administrative Performance

– review of how well administrative practices

worked

• Organizational Structure

– identify modifications to help future projects

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The Project Final Report continued

• Project Management Techniques

– recommendations for improvements in future

projects