Meaning of Project Termination, Reasons for Termination of Projects, Process for Terminating Projects

16/12/2021 0 By indiafreenotes

Project termination is one of the most serious decisions a project management team and its control board have to take. It causes frustration for those stakeholders who sincerely believed and in most cases still believe that the project could produce the results they expected, or still expect. The project manager and his or her team members, very important stakeholders of the project as well, will feel that they personally failed. They also will be scared of negative consequences for their careers; their motivation and consequently, productivity will decrease significantly.

Reason for Termination:

  • Technical reasons
  • Requirements or specifications of the project result are not clear or unrealistic
  • Requirements or specifications change fundamentally so that the underlying contract cannot be changed accordingly
  • Lack of project planning, especially risk management
  • The intended result or product of the project becomes obsolete, is not any longer needed
  • Adequate human resources, tools, or material are not available
  • The project profit becomes significantly lower than expected, due to too high project cost or too low project revenue
  • The parent organization does not longer exist
  • The parent organization changes its strategy, and the project does not support the new strategy
  • Force majeure (e.g. earthquake, flooding, etc.)
  • Necessary conditions disappear
  • Lack of management support
  • Lack of customer support

To Avoid:

  • A clearly communicated strategy of the organization.
  • Clearly communicated reasons why and how the project supports that strategy, and under what conditions it does not.
  • Clearly set and communicated project success criteria (in terms of scope, schedule, and budget), if possible, clearly set and communicated termination criteria.
  • High level management attention, even for smaller projects, and even then, when everything still seems to be on track.
  • Periodical review meetings with the control board.
  • Open discussions with the control board about problems and possible solutions or alternatives, including termination.
  • In case the project has to be terminated, a clear commitment of the control board and high-level management towards the project management team in order to enable the team to follow the project closure procedures.
  • Upon successful termination, similar rewards and incentives for the project manager and his or her team as with regular project closure.

Reasons for Termination of Projects

Your competitors are doing a better job

As a project manager, you may be motivated to prove your mettle and take your company ahead in the market, but think logically and determine if it is possible. Many a times, you may be motivated at the start of the project but once you begin with it and have to face grave challenges one after another, the positive drive may fizzle out and you may be left with a project that is going nowhere. Even if you realize it midway on the project, do not hesitate to pull the plug.

Expensive or does not meet company’s goal

Make an estimate of the total cost of the project in the planning stage itself. A few thousand dollars here and there are manageable, but when you see the figure going way over your approximate value, it is better to put an end to the project right in the initiation stage. Also, if the project does not go well with the strategic plan of the company, it should not be given the green signal.

Project gets out of control

When operations get way beyond control or when damages cannot be repaired anymore, you know it is time to terminate the project.

Failure in testing process

It is sad to see a project fail during testing. However, if the team members gave it all that they could and the project still could not succeed, putting an end to the project is a sensible choice rather than spending twice the energy and resources on it again.

Important or priority project comes up

Businesses take up several projects simultaneously. However, there are some projects which need more time, energy and resources. If a certain project is stopping you from allocating the required resources in a bigger, important project, it is better to let go of the smaller project.

Process for Terminating Projects

Confirm work is done as per the requirements

Once the project is closing, all deliverables of the project must have been completed and delivered to the customer. You should also take formal acceptance of the customer for the completed work.

Complete procurement closure

Since the project is closing, you should complete any remaining payments that need to be made to the suppliers or partners. The procurement steps are also completed.

Gain formal acceptance

Formal acceptance of the project and project deliverables are taken from the customer. Usually, the customer presents a written document, it can be an email or a signed off document, which states that the project has been completed and they accept the outputs of the project.

Complete final performance reporting

The final performance of the project is calculated and recorded. These include cost performance, schedule performance, quality performance etc. For instance, whether the project has been completed under budget or if it could not be completed, how much did the project exceeded the planned budget?

Index and archive records

Collected documents are finalized. Final versions of the project management plans and all necessary documents about the project are archived in the company records.

Update lessons learned

Lessons learned is collected and gathered from all stakeholders. Lessons learned documentation is stored in the organizational process assets of the company.

Hand-off completed product

Once the project is completed, the product of the project is handed over for the use of the end customer. The handover may need a predetermined period of assistance or some documents describing how to use or how to operate with the product.

Release the resources

After the project is completed successfully, all assignments of the project resources are closed, lessons learned inputs from the project resources are collected and then these resources are released respectively.

As you see, the project closure is also as important as the other phases, so you must take these activities into consideration for better outcomes in your next projects.