Aim: To understand the below two processes in the Closing Process Group
• Close Project or Phase
• Close Procurements
Look at it from this perspective; if you would have known everything that you know today about your project(s) when you started, would you have done things the same way? Would you have used the same resources?
Of course, probably by now you are thinking, what a crock, we are not born experts. How am I supposed to know when to do what and how to avoid execution problems? This is where trusted consultants and an experienced project manager come into play; they help in identifying what pitfalls to avoid.
One of the key recurring messages of the PMI methodology is to leverage expert resources and to use the project archives; executing the proper closing process ensures that the groundwork for your own internal expert resource and knowledge base is built combining knowledge and experience of your people, culture, and enterprise.
This process takes into account the needs for documentation and the understanding of the associated risks, the risks analysis techniques, and the decision-making process.
Exam Trivia:
What is a project deliverable? A project deliverable is the specific, quantifiable product or service that is attained after the completion of a project phase or the project.
The table below shows the inputs, tools and techniques, and outputs for the close project or phase process.
| Close Project or Phase | ||
|---|---|---|
| Inputs | Tools & Techniques | Outputs |
| Project management plan Accepted deliverables Organizational process assets | Expert judgment | Final product, service, or result transition Organizational process assets updates |
• Project management plan
• Accepted deliverables
Exam Trivia:
For the PMP Exam, you must remember that the close project or phase process and close procurements process are both processes of the closing process group and that the close procurements process happens before the close project or phase process.
Why have these been designated as key input elements? The intent is to take this time to verify that all of the project deliverables are met. Use the work breakdown structure (WBS), the work packages, and the packages’ resource assignments as a roadmap to identify any remaining critical work elements to be completed and ensure the proper transitions.
If there are any unfinished tasks, you need to make arrangements to prepare their termination plan and measure their combined risk materiality to the long term viability of the project, services, and deliverables.
For example, one of the contracts calls for the return of all graphite composite containers to the lease company within 30 days of project completion. Your job as project manager is to issue all the proper closeout work orders and see that these containers are returned to the provider on time. Does this task have anything to do with the long-term functionality of your project? Probably not. However, if not addressed by the deadline, it has the potential of affecting your company at a potentially high annual cost.
This process must be repeated throughout the entire work package dictionary to ensure that deliverables are in line with the project and the performance metrics that you assigned to the service provider.
One of the most important realizations of the project management process should be that the project does not stop when the end is in sight or the product or services are delivered. If anything, this is where you need to concentrate and make sure that all tasks and their peripheral activities are completed. Examples of some of these activities are
• Client or user final acceptance
• Updates to all pertaining historical records
• Transitions to ongoing support
• Release all project resources
• Get final signoff and release from the project sponsor
To know more about the Close Project or Phase process Click Here
Close Procurements
At project build-up, you might have been faced with the need to have extra capacity by bringing in external resources. The close procurements process is the place where you accept delivery of the product and close the corresponding procurement agreements.
For example, you work for a multinational company that decides to leverage its internal expertise in building bridges over long water bodies by combining the resources from the steel and cement business units with its engineering unit. In addition to coordinating the building of the bridge, you are now faced with the challenge of having to orchestrate all the intercompany contracts, expenses, and revenue-generating models in order to ensure the proper level of synergies.
Not that this is any different than using external resources; however, you need to pay close attention to the human factor. The human factor refers to any cultural and personal differences between your culture and the inbound resources.
Another example for contract management might include a combination of internal, external, and outsourced relationships. These relationships might call for a different set of closing instructions that depend on the type of relationship. For example, relationships that exist within a single organization are different from outsourced relationships. Likewise, closing procedures are apt to be different.
The table below shows the inputs, tools and techniques, and outputs for the close procurements process.
| Close Procurements | ||
|---|---|---|
| Inputs | Tools & Techniques | Outputs |
| Project management plan Procurement documentation | Procurement audits Negotiated settlements Records management system | Closed procurements Organizational process assets updates |
• Closed procurements
• Organizational process assets (updates)
Of course, this also means that you are part of the contract negotiation and interpretation, thus requiring a special dose of leadership and management techniques in an environment with multiple moving parts.
For closing procurements, you need to be well aware of your vendor’s or provider’s
• Performance metrics
• Assigned work packages
• Deliverables
• Schedule performance
• Quality control metrics
• If applicable, inspection reports pertaining to regulatory requirements
In addition, you need to address items such as
• Considerations to perform product or service verification that ensures all work was completed in accordance to the service level agreements (SLA) and the deliverables specified in the contract
• Review of contract terms and conditions in the event that the product is not delivered to specifications
• Enabling of early terminations clauses and remediation due to the vendor’s inability to deliver the product, agreed budget being exceeded, or failure to assign the required resources
Exam Trivia:
Early contract terminations can be a result of a mutual agreement or due to a failure to fulfill the contract deliverables. Early termination can occur at any time during the project.
To know more about the Procurement Closure process Click Here
Closing a Project or Phase Criteria
Everyone hopes for a successful project completion, but the cold hard reality is that on occasion some projects are presented with challenges from their inception up to their ultimate demise. Some of the outside reasons that can trigger an early termination could be linked to elements such as
• Market conditions— Where the company or client is forced to discontinue a project simply because the initiative is no longer in line with their long-term market share or presence objectives.
• Customer requirements— Your client decided to implement changes that are well beyond the capabilities of the current initiative, making it cost prohibitive to tackle the project at this time.
• Insufficient resources— You do not have the people, money, facilities, supplies, and so on to complete a project.
• Technical problems— In the project management arena technical problems go beyond the computer. Technical problems could include things such as variances in the density of the material used in a building to the inability to devise a way to hold the insulation in the space shuttle main fuel tank.
• Enterprise culture— The project and its product or services contradict the culture of the company. For example, a company is known for its face-to-face customer service practices and, after implementing a test of self-service point-of-sale checkout lines, discovers that implementing this initiative has a direct impact on the customer perception.
• Bankruptcy— Your client or company will not gain a cash position or additional market share by implementing your project, so the project is cancelled.
Even in these instances, you must ensure a successful transition by leading your project toward project closing criteria elements, which include
• The formal acceptance of the project results or product by your customer
• Documentation and forms resulting from organizational requirements
• Project performance metrics and reports
• Budget expenditures
• Cost benefit metrics and verifications
• Lessons learned
Think of the project closing criteria as those elements that give reasonable assurance that your project took into account the initial deliverables, the client, and the sponsor approval.
In addition, this process works closely with the communication management and the procurement management plans to formalize the ending of your project.
Some of the key participants of this process are
• Project sponsor— This is who gives final validation that the project’s services and products are inline with the original objectives and deliverables of the project before the official hand-off to the client and the operational support team takes place.
• Project manager— This is who keeps coordinating the execution of the communication, procurement, human resources, cost management, and quality plans until such time that the project is officially closed and turns over all the archives.
• Team members— These are the people who assist the project manager in performing the aforementioned tasks, plus assist in transitioning the new product or service to operational support.
• Quality assurance team— These are the people who ensure that all work adheres to agreed project quality expectations and deliverables.
Exam Trivia:
Formal acceptance is the binding process between the customer and the seller (provider) of the product or services that the product or service has been accepted. Its form and contents are predicated by the service agreement or negotiated in the contract.
The key item to remember when preparing for closing a project or phase is that the actual project criteria plan and requirement definition began the day that the project charter and the project scope were defined and agreed upon by the client, sponsor, and the entire project team.
You are just making sure that there is an effective transition between what was agreed upon at the beginning of the project and what was delivered and accepted by the client.
Lessons Learned
Contrary to popular practice, lessons learned should be part of all phases of your project and recorded as they occur; do not get this confused with the post-mortem connotation used by some project managers. If you follow this approach, you might miss the opportunity to write down important elements that might prove essential in future projects.
Why make lessons learned throughout the project? An out-of-context example would be not writing down the license plate and color of a car involved in a hit and run; the more time that passes, the less clarity you have about the details.
The main intent of the lessons learned is to help build an information store that allows anyone in your company to look back in time and understand the decisions made and the circumstances that surrounded the decision-making process.
Some of the triggering events for lessons learned records are
• Significant course corrections are implemented
• Corrective or preventive actions are taken
• Scope changing events occurs
• Root cause for variances between planned and actual project events
It is incumbent upon you to make every effort to be extremely honest and include items that performed well and those that did not. You must highlight individuals involved in the process and the risk factors considered at the time of making the decision.
Some of the elements this report might have are
• Executive summary
• Project phase
• Related work package
• Event description
• Event duration
• Action taken
• Decision makers
• Results
• Areas of improvement
• Time stamp
Exam Trivia:
Do not make the mistake of confusing a project execution satisfaction survey with a lessons learned document—they have different functions.
In addition to recording lessons learned, you must make every effort to collect any evidence and include it as part of the project archive.
Ending a Procurement or a Project
Ending a procurement is not the same as ending the project. There might be cases where they coincide but that is not to be expected as the normal behavior. You could have a case where a contract for a service ends but the project continues with another provider or project phase.
In contract execution, there are two actors: the buyer of goods and services and the seller of those goods and services. During the life of the project, contracts might end for one of the following reasons:
• Successful completion— Successful completion occurs when goods and services have been delivered in accordance with the contract specifications. At this point no further action is required with exception of formal acceptance of the product or services and final payment.
• Collective agreement— This occurs when both parties agree to end the contract. A collective agreement or mutual consent termination allows you to present and negotiate contract closing terms, such as a no-cost settlement, payment of all fees and charges accrued prior to the effectiveness of the cancellation, and payment at a reduced cost by settlement.
For the most part, the parameters of what is available as recourse is specified in the contract by the paragraph that reads something such as, “This agreement may be terminated by either party at the renewal/anniversary date by giving the other party notice at least 15 days prior to the renewal/anniversary date of the Term. This Agreement may also be suspended or terminated by....”
And, you must issue your collective agreement notice for cancellation of services with something such as, “Pursuant to the termination section of the professional services agreement between client and provider, this contract is hereby terminated effective on dd-mm-yy. You are directed to cease all work upon presentment of this notice and start the close procurement process,” (which you need to have defined by now).
When there is a breach— A breach of contract states that one of the parties is not complying with the terms and specifications of the contract. A breach of contract or contract default situation requires immediate and special attention from the legal counsel. Remember that the actions to take are as varied as the different clauses stipulated in the contract.
In addition, because good providers are difficult to find, executing a breach of contract procedure should be viewed as the last resort. Of course, it all depends on your long-term objectives with the relationship and the provider’s willingness to solve the problem that caused the breach. For example, if the default occurs at the service level agreement (SLA) level, your contract might allow you to consider mitigating factors and make adjustments to the SLA. Or, you might be able to outsource, supplement, or augment the function in question at the provider’s expense in order to deliver according to the SLAs.
Another key element to consider is a cure or remediation period. Basically, this is a cooling-off period that allows the provider a pre-ordinate amount of time to remediate the problem before taking any actions.
For contracts where the deliverables, products, and services go according to the plan, the next step is to ensure that
• All issues have been resolved.
• All contract deliverables have been delivered and accepted by the client and the sponsor.
• The project manager gives final approval.
• All assets have been accounted for.
• Final payment has been issued.
Project contracts rarely go beyond the actual life of the project; project phases might end several times throughout the project but there is only one project closing.
Some of the reasons a project might conclude are
• The company loses interest in the project and its deliverables.
• The company, project, or group is replaced or displaced.
• The project comes to a normal end after all the products and services are delivered.
• The project becomes its own organization living beyond the end date as an organizational process.
• The project is replaced by another initiative.
Exam Trivia:
For test purposes, you need to be familiar with project conclusion states such as extinction, inclusion, integration, starvation, addition, collapse, absorption, and deterioration.
Another element to consider when processing a project closing is what to do with the team that was assigned to your project. A project might end, or terminate, in one of several states.
• A project that ends in integration mode has its resources assigned to other areas and integrated into the normal operations of the business. Most often they are reintegrated to the department or group from which they came.
One challenge to this project ending mode is that the responsibilities of the position could have been reassigned or replaced by new processes. This gives the returning team member the special opportunity to flex her muscles and take on new and more demanding responsibilities.
• A project that ends in extinction or collapsed mode is a project that has ended before meeting its stated objectives. Simply stated, in this situation people do not have a place to which to return.
• A project that ends in inclusion, absorption, or addition mode is a project that has been accepted and has transitioned to be part of the organization. In this type of project ending, your team members keep performing their assigned project functions as their new day-to-day responsibilities, maintaining the project performance in accordance to specifications.
• A project that ends in starvation or deterioration mode is a project for which all its resources have been cut. You just have an empty shell.
Note
From the process group perspective, closing a contract is part of the project procurement management process and closing the project is part of the project integration.
Final Review Meetings
At this point, you have received final approval from the client and the sponsor, compiled the final set of reports, released all your team members, and delivered the project products and services. Your next task is to meet with the project sponsor for the final review meeting. This meeting is where the project manager gets final release, receives project performance reports, and is able to return to the bench to wait for the next assignment.
The bench could be going back to your regular job or actually sitting in your company’s project management office to oversee the final archiving steps and get a new assignment altogether.
To know more about the final things to be done while closing the project Click Here
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