Project Termination

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.

In contrast to that, we are convinced that conscious project termination at the right time, based on clear
and well communicated criteria, profoundly discussed with the whole project management team, and
finally mutually decided, is one of the boldest actions the involved or affected members of an
organization can take.

 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 Why Project Termination Becomes Necessary

 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

Whenever along the life cycle of a project it becomes clear that we have to terminate it, there will be
achievements we need to document. The least achievement is new knowledge and experience about
what does not work. We need to document this so that the organization does not run into a similar
situation again. Therefore, we emphasize again that it is vital to run the regular project
closure procedures for a project we have to terminate. As such, adequate project termination marks
successful project management.

Major activities in order to close the project phase are:

 resolve all those open points of the LOP

 support settlement of open claims
 prepare the final presentation of the project results
 get final acceptance of the project results
 handover the project results to the customer and/or user, combined with an official celebration
 close all project controlling tools
 complete and close all reports or documents
 generate final project reports for your own organization, the customer, other stakeholders
 call for feedback of team members, your control board, the customer, and other stakeholders
 carry out a lessons learned workshop
 p, including a final risk assessment
 handover to the team that takes care of the warranty period or further customer support
 have a party with your team
 release resources and support them to find new assignments
 close all project accounts and carry out the final project calculation
Project Termination

• A project can be said to be terminated when work on the substance of the project has ceased or
slowed to the point that further progress is no longer possible
• There are four fundamentally different ways to close out a project: extinction, addition, integration,
and starvation

Termination by Extinction

• The project may end because it has been successful and achieved its goals
• The project may also be stopped because it is unsuccessful or has been superseded
• A special case of termination by extinction is “termination by murder” which can range from political
assassination to accidental projecticide
• Two important characteristics of termination by murder are the suddenness of project demise and the
lack of obvious signals that death is imminent
• When a decision is made to terminate a project by extinction, the most noticeable event is that all
activity on the substance of the project ceases

Termination by Addition

• If a project is a major success, it may be terminated by institutionalizing it as a formal part of the

parent organization
• Project personnel, property, and equipment are often simply transferred from the dying project to the
newly born division
• The transition from project to division demands a superior level of political sensitivity for successful
accomplishment

Termination by Integration

• This method of terminating projects is the most common way of dealing with successful projects, and
the most complex
• The property, equipment, material, personnel, and functions of the project are distributed among the
existing elements of the parent organization

Termination by Starvation

• This type of project termination is a “slow starvation by budget decrement”

• There are many reasons why senior management does not wish to terminate an unsuccessful or
obsolete project:
– Politically dangerous to admit that one has championed a failure
– Terminating a project that has not accomplished its goals is an admission of failure
When to Terminate a Project

• Some questions to ask when considering termination:

– Has the project been obviated by technical advances?
– Is the output of the project still cost-effective?
– Is it time to integrate or add the project as a part of regular operations?
– Are there better alternative uses for the funds, time and personnel devoted to the project?
– Has a change in the environment altered the need for the project’s output?

When to Terminate a Project

• Fundamental reasons why some projects fail to produce satisfactory answers to termination
questions:
– A project organization is not required
– Insufficient support from senior management
– Naming the wrong person as project manager
– Poor planning
• These and a few other reasons are the base cause of most project failures
• The specific causes derive from these, fundamental issues

The Termination Process

• The termination process has two distinct parts

– First is the decision whether or not to terminate
– Second, if the decision is to terminate the project, the termination process must be carried out
• The actual termination can be planned and orderly
• Special termination managers are sometimes useful in shutting down a project
• The primary duties of the manager in charge of termination can be encompassed in nine general tasks

Duties of the termination manager:

1. Ensure completion of the work, including tasks performed by subcontractors

2. Notify the client of project completion and ensure that delivery is accomplished
3. Ensure that documentation is complete including a terminal evaluation of the project deliverables and
preparation of the project’s Final Report
4. Clear for final billings and oversee preparation of the final invoices sent to the client
5. Redistribute personnel, materials equipment, and any other resources to the appropriate places
6. Clear project with legal counsel or consultant
7. Determine what records to keep
8. Ascertain any product support requirements, decide how each support will be delivered, and assign
responsibility
9. Oversee the closing of the project’s books
The Final Report- A Project History

• The final report is the history of the project

• It is a chronicle of the life and times of the project, a compendium of what went right and what went
wrong
• The required information is contained in the master plan, all project audits, and evaluations
• The precise organization of the report is not of great concern; the content is
• Several Subjects should be addressed in the final report:
– Project performance
– Administrative performance
– Organizational structure
– Project and administrative teams
– Techniques of project management
• For each element covered in the final report, recommendations for changing current practice should
be made and defended
• Equally important are comments and recommendations about those aspects of the project that
worked unusually well
• The fundamental purpose of the final report is to improve future projects