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The Importance of Project Closeout and Review in Project Management.
The well known English phrase “last but not least” could not better describe how important the project closeout phase is. Being the very last part of the project life-cycle it is often ignored even by large organizations, especially when they operate in multi-project environments. They tend to jump from one project to another and rush into finishing each project because time is pressing and resources are costly. Then projects keep failing and organizations take no corrective actions, simply because they do not have the time to think about what went wrong and what should be fixed next time. Lessons learned can be discussed at project reviews as part of the closeout phase. Closure also deals with the final details of the project and provides a normal ending for all procedures, including the delivery of the final product. This paper identifies the reasons that closeout is neglected, analyzes the best practices that could enhance its position within the business environment and suggest additional steps for a complete project closeout through continuous improvement.
Project managers often know when to finish a projects but they forget how to do it. They are so eager to complete a project that they hardly miss the completion indicators. “Ideally, the project ends when the project goal has been achieved and is ready to hand over to customer” (Wellace et. al, 2004, p156). In times of big booms and bubbles, senior management could order the immediate termination of costly projects. A characteristic example of that is Bangkok’s over investment in construction of sky-scrapers, where most of them left abandoned without finishing the last floors due to enormous costs (Tvede, 2001, p267). Projects heavily attached to time can be terminated before normal finishing point if they miss a critical deadline, such as an invitation to tender. Kerzner (2001, p594) adds some behavioural reasons for early termination such as “poor morale, human relations or labour productivity”. The violent nature of early termination is also known as ‘killing a project’ because it “involves serious career and economic consequences” (Futrel, Shafer D & Shafer L, 2002, 1078). Killing a project can be a difficult decision since emotional issues create pride within an organization and a fear of being viewed as quitters blurs managerial decisions (Heerkens, 2002, p229).
The most direct reason that Project Closeout phase is neglected is lack of resources, time and budget. Even though most of project-based organizations have a review process formally planned, most of the times “given the pressure of work, project team member found themselves being assigned to new projects as soon as a current project is completed” (Newell, 2004). Moreover, the senior management often considers the cost of project closeout unnecessary. Sowards (2005) implies this added cost as an effort “in planning, holding and documenting effective post project reviews”. He draws a parallel between reviews and investments because both require a start-up expenditure but they can also pay dividends in the future.
Human nature avoids accountability for serious defects. Therefore, members of project teams and especially the project manager who has the overall responsibility, will unsurprisingly avoid such a critique of their work if they can. As Kerzner (2001, p110) observe, “documenting successes is easy. Documenting mistakes is more troublesome because people do not want their names attached to mistakes for fear of retribution”. Thomset (2002, p260) compares project reviews with the ‘witch hunts’ saying that they can be “one of the most political and cynical of all organizational practices where the victims (the project manager and the team) are blamed by senior management”. While he identifies top management as the main responsible party for a failure, Murray (2001) suggest that the project manager “must accept ultimate responsibility, regardless of the factors involved”. A fair-minded stance on these different viewpoints would evoke that the purpose of the project review is not to find a scapegoat but to learn from the mistakes. After all, “the only true project failures are those from which nothing is learned” (Kerzner, 2004, p303).
When the project is finished, the closeout phase must be implemented as planned. “A general rule is that project closing should take no more than 2% of the total effort required for the project” (Crawford, 2002, p163). The project management literature has many different sets of actions for the last phase of the project life cycle. Maylor (2005, p345) groups the necessary activities into a six step procedure, which can differ depending on the size and the scope of the project:
First of all, the project manager must ensure the project is 100% complete. Young (2003, p256) noticed that in the closeout phase “it is quite common to find a number of outstanding minor tasks from early key stages still unfinished. They are not critical and have not impeded progress, yet they must be completed”. Furthermore, some projects need continuing service and support even after they are finished, such as IT projects. While it is helpful when this demand is part of the original statement of requirements, it is often part of the contract closeout. Rosenau and Githens (2005, p300) suggest that “the contractor should view continuing service and support as an opportunity and not merely as an obligation” since they can both learn from each other by exchanging ideas.
Mooz et. al (2003, p160) defines documentation as “any text or pictorial information that describe project deliverables”. The importance of documentation is emphasized by Pinkerton (2003, p329) who notes that “it is imperative that everything learned during the project, from conception through initial operations, should be captured and become an asset”. A detailed documentation will allow future changes to be made without extraordinary effort since all the aspects of the project are written down. Documentation is the key for well-organized change of the project owner, i.e. for a new investor that takes over the project after it is finished. Lecky-Thompson (2005, p26) makes a distinction between the documentation requirements of the internal and the external clients since the external party usually needs the documents for audit purposes only. Despite the uninteresting nature of documenting historical data, the person responsible for this task must engage actively with his assignment.
3. Project Systems Closure
All project systems must close down at the closeout phase. This includes the financial systems, i.e. all payments must be completed to external suppliers or providers and all work orders must terminate (Department of Veterans Affairs, 2004, p13). “In closing project files, the project manager should bring records up to date and make sure all original documents are in the project files and at one location” (Arora, 1995). Maylor (2005, 347) suggest that “a formal notice of closure should be issued to inform other staff and support systems that there are no further activities to be carried out or charges to be made”. As a result, unnecessary charges can be avoided by unauthorized expenditure and clients will understand that they can not receive additional services at no cost.
4. Project Reviews
The project review comes usually comes after all the project systems are closed. It is a bridge that connects two projects that come one after another. Project reviews transfer not only tangible knowledge such as numerical data of cost and time but also the tacit knowledge which is hard to document. ‘Know-how’ and more important ‘know-why’ are passed on to future projects in order to eliminate the need for project managers to ‘invent the wheel’ from scratch every time they start a new project. The reuse of existing tools and experience can be expanded to different project teams of the same organization in order to enhance project results (Bucero, 2005). Reviews have a holistic nature which investigate the impact of the project on the environment as a whole. Audits can also be helpful but they are focused on the internal of the organization. Planning the reviews should include the appropriate time and place for the workshops and most important the people that will be invited. Choosing the right people for the review will enhance the value of the meeting and help the learning process while having an objective critique not only by the team members but also from a neutral external auditor. The outcome of this review should be a final report which will be presented to the senior management and the project sponsor. Whitten (2003) also notices that “often just preparing a review presentation forces a project team to think through and solve many of the problems publicly exposing the state of their work”.
5. Disband the project team
Before reallocating the staff amongst other resources, closeout phase provides an excellent opportunity to assess the effort, the commitment and the results of each team member individually. Extra-ordinary performance should be complemented in public and symbolic rewards could be granted for innovation and creativity (Gannon, 1994). This process can be vital for team satisfaction and can improve commitment for future projects (Reed, 2001). Reviewing a project can be in the form of a reflective process, as illustrated in the next figure, where project managers “record and critically reflect upon their own work with the aim of improving their management skills and performance” (Loo, 2002). It can also be applied in problematic project teams in order to identify the roots of possible conflicts and bring them into an open discussion.
Ignoring the established point of view of disbanding the project team as soon as possible to avoid unnecessary overheads, Meredith and Mandel (2003, p660) imply that it’s best to wait as much as you can for two main reasons. First it helps to minimize the frustration that might generate a team member’s reassignment with unfavourable prospects. Second it keeps the interest and the professionalism of the team members high as it is common ground that during the closing stages, some slacking is likely to appear.
6. Stakeholder satisfaction
PMI’s PMBoK (2004, p102) defines that “actions and activities are necessary to confirm that the project has met all the sponsor, customer and other stakeholders’ requirements”. Such actions can be a final presentation of the project review which includes all the important information that should be published to the stakeholders. This information can include a timeline showing the progress of the project from the beginning until the end, the milestones that were met or missed, the problems encountered and a brief financial presentation. A well prepared presentation which is focused on the strong aspects of the projects can cover some flaws from the stakeholders and make a failure look like an unexpected success.
Even when the client accepts the delivery of the final product or service with a formal sign-off (Dvir, 2005), the closeout phase should not be seen as an effort to get rid of a project. Instead, the key issue in this phase is “finding follow-up business development potential from the project deliverable” (Barkley & Saylor, 2001, p214). Thus, the project can produce valuable customer partnerships that will expand the business opportunities of the organization. Being the last phase, the project closeout plays a crucial role in sponsor satisfaction since it is a common ground that the last impression is the one that eventually stays in people’s mind.
Continuous improvement is a notion that we often hear the last decade and review workshops should be involved in it. The idea behind this theory is that companies have to find new ways to sustain their competitive advantage in order to be amongst the market leaders. To do so, they must have a well-structured approach to organizational learning which in project-based corporations is materialized in the project review. Garratt (1987 in Kempster, 2005) highlighted the significance of organizational learning saying that “it is not a luxury, it is how organizations discover their future”. Linking organizational learning with Kerzner’s (2001, p111) five factors for continuous improvement we can a define a structured approach for understanding projects.
This approach can be implemented in the closeout phase, with systematic reviews for each of the above factors. Doing so, project closure could receive the attention it deserves and be a truly powerful method for continuous improvement within an organization. Finally, project closeout phase should be linked with PMI’s Organizational Project Management Maturity (OPM3) model where the lessons learned from one project are extremely valuable to other projects of the same program in order to achieve the highest project management maturity height.
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