8.3 PROJECT TERMINATION Eventually the project is terminated, either quickly or

Question

8.3 PROJECT TERMINATION Eventually the project is terminated, either quickly or slowly, but the manner in which it is closed out will have a major impact on the quality of life in the organization. Occasionally, the way project termination is managed can have an impact on the success of the project. Invariably, however, it has a major effect on the residual attitudes toward the project held by senior management, the client, the project team, and even others in the organization. It also has a major effect on the projects in the future. organization's successful use of In some project-organized industries (e.g., construction or software development), project termination is a less serious problem because the teams often remain relatively intact, moving on to the next project. In other industries, however, the termination of a project, particularly a long and difficult one, is akin to the breakup of a family and may well be stressful, even to the point of grieving. Therefore, the skill and manage- ment of the termination process-a project in itself-can have a major impact on the working environment of the larger organization. When to Terminate a Project If one adopts the position that sunk costs are irrelevant to current investment decisions, a primary criterion for project continuance or termination should be whether or not the organization is willing to invest the time and cost required to complete the project, given its current status and expected outcome. Although this criterion can be applied to any project, not everyone agrees that sunk c that this is a primary criterion. The criteria commonly applied for deciding whether to terminate a project fall into two general categories: (1) the degree to which the project has met its goals and objectives, and (2) the degree to which the project qualifies against a set of factors generally associated with success or failure. Table 8-4 identifies the most important factors in terminating R&D; projects at 36 different companies. osts are irrelevant, nor does everyone agree Table 8-4 Rank-Ordered Factors Considered in Terminating R&D; Projects No. of Companies Reporting the Factor as Being Important Factors

Explanation / Answer

Some of the commonly used project evaluation criteria are as under:

1. Inputs:

These are the data related to important aspects of the project which needs to be further analysed to evaluate and to take decision about the project. Inputs are needed to be collected very carefully with special attention on their quality for making best informed decision. A few types of inputs are as follows:

(a) Technical Aspects
(b) Financial Aspects
(c) Market Aspects
(d) Business Aspects

2. Project Evaluation Methods:

After the data in the various aspects have been collected, it is further analysed using various financial and human methods to find out the suitability of project, which are as follows:

(a) Financial ratios
(b) Cash Flow analysis
(c) Score Index Methods
(d) Mathematical Techniques
(e) Relevance and Decision Trees
(f) Experience Based Methods

3. Checklist:

After the project has been evaluated on different methods, its results are further compared with a Project Objectives checklist to find out the resultant deviations from the standard objectives fixed for each criterion in the project objectives checklist.

4. Decision Analysis:

It is the final stage of Project evaluation where the overall Cost Benefit analysis of project is done based the different evaluation that has been done in previous steps to find out and ascertain whether the project will meet the planned objectives in all the areas and to take decision on its further Continuance or Termination.

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.