Lecture 11- Project Assesment and Termination

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    Introduction

    Projects are goal oriented open systems and utilizefeedback to track the progress and timing of coursealteration (when needed).

    In the project environment the work must be tracked,evaluated and corrected to keep schedule, expenditure,

    and performance on target.

    How?

    Oversee the work

    Asses the progress Issue instruction for correction

    By receiving the information the PM assesses the overallprogress and communicates with the client, upper

    management, and the team

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    A major vehicle forassessmentis theproject

    audit, a more or less formal inquiry into any

    aspect of the projectA project audit is highly flexible and may focus on

    whatever matters senior management desires

    The evaluation of a project must have

    credibility in the eyes of the management groupfor whom it is performed and also in the eyes of

    the project team on whom it is performed

    Project Assessment/Evaluation

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    Project Assessment

    The primary purpose of project assessment is to

    evaluate the performance,

    reveal areas where the project deviate from the

    goal,

    uncover potential problems so that they can be

    corrected.

    Assessment serves the purpose ofsummarising

    project status to keep stakeholders inform

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    Goals of Project Assessment

    The major goals of project assessment is thesuccessful completion of project.

    Four independent dimensions of success:

    The most important dimension is the projectsefficiency in meeting both the budget and schedule

    Second dimension, again somewhat straightforwardand expected, is business/direct success

    A third dimension, somewhat more difficult andnebulous to ascertain, is future potential

    The last dimension, and the most complex, is that ofcustomer impact/satisfaction

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    Goals of Project Assessment

    Another purpose of assessment is to helptranslatethe achievement of the projects

    goals into a contribution to the parentorganizations goals.

    To identify and understand the projectsstrengths and weaknesses

    The result is a set ofrecommendations thatcan help both ongoing and future projects

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    Benefits of Project Assessment

    A successful assessment via audit can help a

    project:

    Identify problems earlierClarify performance, cost, and time relationships

    Improve project performance

    Locate opportunities for future technological

    advances

    Evaluate the quality of project management

    Reduce costs

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    Need for Project Assessment

    Organizational Benefits Speed the achievement of results

    Identify mistakes, remedy them, and avoid them inthe future

    Provide information to the client

    Reconfirm the organizations interest in, and

    commitment to, the project

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    Ancillary benefits

    Identify organizational strengths and weaknesses in

    project-related personnel, management, anddecision-making techniques and systems

    Identify risk factors in the firms use of projects

    Improve the way projects contribute to the

    professional growth of project team members Identify project personnel who have high potential

    for managerial leadership

    Need for Project Assessment

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    Two Kinds of Assessment In Projects

    Formative Assessment - throughout the project

    life cycle to guide for corrective actions.

    What is happening?

    How is the project proceeding?

    Summary Assessment - after project completion,

    focuses on the outcome or end product/s of the

    project

    What happened?

    What are the results?

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    Formative Project Assessment

    Must account for the fact that projects are complexsystems

    cost, schedule and quality are interrelated-As a result

    corrective measures directed on just one performance

    criteria can lead to problems in other criteria interdependent work tasks are drawn from the same pool of

    limited resource -Attempts directed solely in improving

    performance in one work can have detrimental effects on the

    others

    Project assessment must incorporate the three performance

    criteria simultaneously

    Must account for the impact of changes in any one work area on

    other related areas.

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    Formative Project Assessment-

    cont Must be able tosignal potential trouble

    spot so action can be initiated before

    problem is materialised

    The best kind of assessment is not only

    reveals problem but it also points outopportunities to reduce cost, speed up

    works and/or enhance project outcomes in

    other ways.

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    Methods and Measures

    Methods and measures should be specified

    before the project begins and should included in

    the project plan. 4 primary ways of obtaining and/or conveying

    assessment information are:

    Graphics

    Reports (oral and written)

    Observations

    Review meeting

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    GraphicsUses charts and tables: most expeditious way of

    presenting costs, schedules and performance info.

    Advantages Large amount of complex info into simple, comprehensible

    format

    Clarify info on progress, performance and predictions

    Allow everyone to appreciate the current status direction of theproject

    Disadvantages

    Can hide or obscure information leading to facile and erroneousconclusions, eg project level charts tend to hide problems of thework package level

    Neither reveal the underlying causes of problems nor suggestopportunities

    Time consuming

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    Reports

    Oral reports Oral reports about project status and performance

    are easy and quick.

    Quality and reliability depends on the interpretativeand verbal skill of the presenter

    Unless followed by a written report gets lost orgarbled

    Written reports Most effective when they succinctly summarise

    info and make use of ratios and graphics tohighlight important points

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    Observation

    The PM can reduce the info distortion byincreasing observation and on-site contact

    with the supervisors and workers since,the more channels for passing info, themore the info get distorted.

    Good project managers do not stay in theiroffices but are usually on-site.

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    Project Review Meeting

    The most important and useful way of assessment.

    Purpose of the meetings

    Identify the deviation and corrective measures as quicklyas possible

    Focuses on

    Current problems with the schedule, costs, with thequality performance solutions

    Anticipated problems and risksOpportunity to improve the performance

    Similar to Quality circle procedures used in theproduction environment

    Can be formal orinformal

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    Formal Reviews Scheduled in advance at critical stages or project

    milestones

    Most common reviews during the project planning and

    execution phases Preliminary design review: to determine whether the concept and

    planned implementation fits the basic operational requirements

    Critical design review: details of the design are reviewed to see

    that they conform to the preliminary design specification.

    Functional readiness review: to evaluate the efficacy of the project

    outcome

    Product readiness review: products are compared to specifications

    and requirements to ensure that the controlling designdocumentation produces items that meet the requirement

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    Informal Reviews Held frequently and regularly involving small groups of

    people

    Referred to as peer review

    Focuses on Project status

    Special problems

    Emerging issues

    Performance of the project with regard to requirement, budget andschedules

    Participants depends on the meeting issue and thephase of the project

    Role of the PM as a facilitator not as dominator

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    Post Completion Project Review

    Summary assessment

    The summary review and assessment of the

    project

    The post completion review process should

    1. Review initial project objectives and review

    soundness of the objectives

    2. Review the evolution of objectives through the end to

    determine how well the project team performed andreview the reasons for changes, noting which changes

    were avoidable and which were not;

    3. Review the activities and the relationships of the

    project team throughout the project lifecycle

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    4. Review the involvement and performance of all

    stakeholders including subcontractor and vendors

    5. Review expenditures, sources of costs andprofitability; identify organisational benefits, projectextensions, and marketable innovations

    6. Identify areas of the project where performance weregood, noting reasons for success and identifyingprocesses that worked well

    7. Identify the problems, mistakes, oversights, andareas of poor performance and their causes

    8. Summarise the lessons learned from the project andprovide recommendations for future projects

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    Project

    Documentation/Reporting

    Company management must be kept appraised ofthe status, progress, and performance of allcompleted, ongoing and upcoming events;

    Problem affecting profits, schedule, quality orbudgets as well as their impacts and recommendedactions should be reported promptly

    Client also should be updated about the projectstatus and notified whenevermajor problem arises

    Consideration should be given to otherstakeholders, weighing confidentiality, and privacyissues against opportunity costs

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    Reports to Top Management

    Periodic (Monthly) reports from the PM to the topmanagement about the project status. Shouldinclude

    1.A brief statement of summarising the project status;2. Red flag items where corrective actions have or should be

    taken;

    3.Accomplishment to date, changes to schedule and budget,and projection for schedule and costsat completion;

    4. Current and potential problem areas and actions required;

    5. Current cost situation and cost performance;

    6. Manpowerplan and limitation.

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    Summary Reports from the Top

    Management When several projects are underway simultaneously, top

    management uses these information received from the PMsto compile periodic (monthly) summaries, Includes

    Name of the customer and the PM;

    Monitory and labour investment;

    Scheduled start and finish date;

    Possible risks, losses and gains;

    Other related information

    The summary enables the top management to assess therelative performance and combined influence of all theprojects on the company.

    This assists the company office in planning, coordination,

    authorisation and resource allocations.

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    Other Reports

    Frequent reports from work packages to the PM on: Value of work completed to-date,

    forecasts of the costs at completion and

    revised calendar schedules for completion

    Monthly reports to PM about the financial status fromwork packages costs incurred and cumulative plannedcosts versus actual costs.

    Reports to functional managers (monthly) man-hours

    and cost associated with the work packages. Reports to customer/user(monthly) monthly status from

    the PM, includes

    Recent changes as requested by the customer

    Changes in costs, schedule and scope, arising from the unavoidablecircumstances

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    Project Termination

    Project has limited duration all projects come to an end; Project termination is a process of closure of all activities

    that occurs whether a project is successful or notdrawingconclusion through some formal and informal ways

    Project Termination is a term that is used commonly inconjunction with other terms such as commissioning, hand-over, and close out;

    The Aim of the termination process is

    to cease the project at all levels with minimumadministrative dislocation

    PM ensures that all project related work has beencompleted and formally closed out by a specified date.

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    Normal or natural termination

    Projects can be terminated as the naturalconclusion in their lifecycle - occurs on

    most projects when all the program works

    are completed as planned.

    Project Termination

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    Unnatural terminations

    Can be terminated unnaturally - for a variety of reasonssuch as:

    Project Owner withdraws support

    Major implications and violations of project time, cost or scopeconstraints.

    Performance of the completed facility is inadequate.

    The need for the project no longer exists.

    The project will no longer deliver the benefits as expected.

    Changed PriorityFinancial or economic reasons may dictate thatresources are no longer available to the project.

    Termination could be the Result of success orfailure

    Project Termination

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    Projects In Trouble

    The four major potential sources of risk of

    unsuccessful are:

    Pioneerorcutting edge technology

    A new type of project for the participating organisation

    and a project manager/team with non-relevant

    experience

    A project substantially largerand complex than theproject participants have ever experienced

    The estimates of cost during the implementation phase

    were done before detailed design was completed and

    the scope fully determined.

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    Project Termination Modes:

    Termination by Extinction

    Extinction by decision It has successfully completed its Scope that has been accepted by

    the Client

    It has Failed

    It has been superseded by external developments- changes inexternal environment

    It no longer has sufficient Support of Senior Management

    Extinction by murder Political assassination; projecticide

    Mergered redundancy- corporate mergers often make certainprojects redundant or irrelevantNCR was forced to cancel severalprojects following its merger into AT&T and several more when NCRwas unmerged recently

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    Termination by Addition

    Project becomes a part of organization New functionality or new division

    Protected status deemed as child, first year,

    carrying less than an adult share of overhead cost Transfer of assets from the extincting project to

    the new born division/function People

    Equipment

    Addition of responsibilities Budgets

    Practices and procedures

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    By Integration/Transition

    Most Common

    Most Complex

    Project Outcome(s) Become(s):Part of Acquiring Organization

    Redistribution of Residual Resources

    Equipment Capital Improvements

    Follow-on Support

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    Project Starvation

    Budget Decrement

    Reallocation of Resources Away from

    ProjectBusiness Conditions

    Political Considerations

    Active w/o Activity

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    When to Terminate a Project

    Some questions to ask when consideringtermination: Has the project fulfilled all its obligations?

    Has the project been obviated by technicaladvances?

    Is the output of the project still cost-effective?

    Is it time to integrate or add the project as a part ofregular operations?

    Are there betteralternative uses for the funds,time and personnel devoted to the project?

    Has a change in the environment altered the needfor the projects output?

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    When to Terminate a Project

    Other Reasons :

    Project organization is not required

    Insufficient support from seniormanagement

    Wrong person as project manager

    Poor planning

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    Project Termination Areas

    Closeout MtgPlans

    Personnel

    Organization

    PayablesReceivables

    Budget Report

    Financial

    ContractsSupplier Comm

    Final Payments

    Purchasing

    Close FacilitiesDispose Equip/Mat'l

    Site

    Project Closeout

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    Project Termination Activities

    Ensure completion of work Close out all work authorities and contracts

    The Client

    Notify client of product completion Ensure delivery and installation is accomplished

    Obtain formal client acceptance

    Financial close out

    Settle outstanding accounts receivable and payable

    Termination Documentation

    Post implementation audit

    Final report

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    Project Termination Activities

    Release resources

    Release/reassign personnel as their planned activityceases

    Distribute other resources appropriately Project Records

    Collate

    Final disposition

    Support

    Determine ongoing support requirements

    Assign responsibilities

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    Termination Responsibilities (TM)

    A project is terminated through a series of formal

    procedures

    A. Planning, scheduling and monitoring

    completion activities: Obtaining and approving termination plans from individual

    functional managers;

    Preparing and coordinating termination plans and schedules;

    Monitoring termination activities and completion of all

    contractual agreements;

    Monitoring the disposition of any surplus (material/equipment)

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    Closing out all work orders and approving thecompletion of all sub-contracted works

    Notifying all departments

    Closing the project office and all other facilities

    occupied by the project organisation

    Closing project book

    Ensuring transfer of project files and documents

    to the responsible department

    B. Final close-out activities

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    C. Customer acceptance, obligation,

    and payment activities

    Ensuring delivery of end items, side items and customeracceptance of the items

    Communicating to the customer when all contractual

    obligations have been fulfilled Ensuring that all documents relating to the customer

    acceptance as required by contract has been completed

    Expediting any customer activity needed to complete the

    project

    Transmitting formal payments and collecting payments

    Obtaining formal customer acknowledgement of completion

    of contractual obligations

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    Termination Report: Some Headings

    Project Summary Project description, Scope, schedule, budget, and

    quality objectives

    Project Performance Compare proposal to post implementation review

    Comment on deviations

    Administrative Performance

    Organisational Structure

    How did structure impede and/or speed

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    Project and Administrative Teams

    Confidential comments on performance of

    individuals and teams in the projectenvironment

    Techniques of Project Management

    Planning, estimating, budgeting, scheduling,resource allocation and control

    Termination Report: Some Headings

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    Earned

    ValueAnalysis

    (EVA)

    Actual cost of workperformed (ACWP)

    Budgeted cost of workperformed (BCWP)

    Budgeted cost of workscheduled (BCWS)

    13

    Graphical Method of Assessment

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