Project EvaluationAtul Fegade, TYBBA, BPPM

Purposes of Evaluation – Goals of the System. Primary purpose of evaluation is to help translate the

achievement of the project’s goal into contribution to the parent organization’s goals.

Efficiency in meeting both the budget and the schedule. Customer satisfaction. Business/Direct success. Future potential.

Purposes of Evaluation – Goals of the System. Direct Goals of the project ignores many costs & benefits to the project,

team members, parent organization. Ancillary goals attempts to –

Improve understanding of the ways in which project’s value to the organization. Improve process for organizing & managing projects. Provide congenial environment in which project team members can work

creatively together. Identify organizational strengths & weaknesses in project related personnel,

management & decision making techniques & systems. Identify & improve the response to risk factors in the firm’s use of the project. Allow access to project policy decision making by external stakeholders. Improve the way project contribute to the professional growth of the project

team members. Identify the project personnel who have high potential for managerial

leadership.

Problems associated with finding the ancillary goals One can not measure the performance against unknown goal. Individuals pursue their own ends while working for

organizations. Lack of trust. Multipurposed projects.

Purposes of Evaluation – Goals of the System.

The Project Audit A through examination of the management of a project,

its methodology & procedures, its records, its properties, its budgets & expenditure, and its degree of completion.

Studies financial, managerial, and technical aspects of the project.

Six Parts - Current status of the project. Future status. Status of crucial tasks. Risk assessment. Information pertinent to other projects. Limitations of the audit.

The Project Audit Why Is It Done?

Revalidate the business feasibility of the project. Reassure top management. Confirm readiness to move to next phase of project. Investigate specific problems.

The Project Audit Depth of the Audit

Time & Money constraints. Depth of investigation depends upon circumstances & needs unique

to each project. The general audit

Constrained by time & resources & usually a brief review of the project.. The detailed audit

Conducted when follow up to general audit is required. When general audit has disclosed unacceptable level of risk or

malperformance in some parts of the project. The technical audit

Detailed audit cannot investigate the problem at a satisfactory technical level. Carried out by qualified technician under the direct guidance of the project

auditor. Most detailed audit.

The Project Audit Timing of the Audit

Early audits tend to focus on technical issues, and tend to benefit the project.

Focused on the technical issues to solve key technical problems. Later audits lean toward cost and schedule, and tend to benefit the

parent organization Transfer of lessons learned to other projects

Postproject Audits Legal necessity because of client specifications in contract. Major part of the postproject Report, a major source of managerial feedback

to the parent firm. To account for all project property & expenditures.

Construction & use of the Audit Report General format for all audit report. Communication device. The information should be arranged so as to facilitate the

comparisons of the predicted vs. actual results. Negative comments about individuals or groups associated

with the project should be avoided. Writing in clear, professional, unemotional style &

restricting content to information & issues that are relevant to the project.

Construction & use of the Audit Report Format for Project Audit Report. Introduction

To provide the framework of understanding for the reader. Including project objectives Also audit assumptions, limitations

Current project status Cost - comparing actual costs to budgeted costs. Schedule Progress/Earned Value Quality

Construction & use of the Audit Report Future Project Status

Conclusions and recommendations Critical Management Issues

A Pareto approach Risk Management

Major threats to project success Caveats, Limitations, Assumptions Appendices

Construction & use of the Audit Report Responsibilities of the project Auditor/Evaluator

Truth, ethics, external assistance, independence etc. Assemble small team of experienced experts. Familiarize the team with the requirements of the project. Audit the project on site. After completion, debrief the project’s management. Produce a written report according to a prespecified format. Distribute the report to the PM & project team for their response. Follow up to see of the recommendations have been

implemented.

The Project Audit Life Cycle. Six basic phases:

Project audit initiation Purpose and scope of audit; gathering sufficient information;

assess methodologies, team members required

Baseline Definition Determine the standards against which performance will be

measured. (Benchmarking)

Establishment of Audit Database Gathering/organizing pertinent data Focus on what’s necessary

The Project Audit Life Cycle. Preliminary Analysis of the Project

The judgment phase Comparison of actuals to standard

Audit Report Preparation Present findings to PM first Then, prepare final report

Audit Termination Review of audit process Disbanding of team

Some Essentials of an Audit/Evaluation. The Audit/Evaluation Team

Depending on size of the Project The project team members, accounting/ controller dept, technical

specialty areas, the customer, marketing dept, senior mgmt, purchasing/asset mgmt, personnel dept, legal/contract administration dept.

To conduct a through & complete examination of the project or some prespecified aspect of the project.

Report information & make recommendations to maximize the utility of the work.

Some Essentials of an Audit/Evaluation. Access to Records

Free access to all information relevant to the project. Gathering data is responsibility of the A/E team. Systematic methods should be developed for separating out

useful information. Access to Project Personnel & Others

Contact between project team members & A/E team members should be free.

But should not be made without the clearance from top management.

Care must be taken to avoid misunderstandings. Critical comments should be avoided.

Project Termination Areas

C los eou t M tgP lan s

P ers on n e l

O rg an iza tion

P ayab lesR ece ivab les

B u d g e t R ep ort

F in an c ia l

C on trac tsS u p p lie r C om mF in a l P aym en ts

P u rc h as in g

C los e F ac ilit iesD isp os e E q u ip /M at'l

S ite

P ro jec t C loseou t

The Varieties of Project Termination. Project is terminated

When work on the substance of the project has ceased or slowed to the point that further progress on the project is no longer possible

When the project has been indefinitely delayed When its resources have been deployed to other

projects Or when project personnel become personae non

gratae with senior management and in the company.

The Varieties of Project Termination. Four ways to close out a project. Termination by Extinction

A project is successfully completed. Or a project is unsuccessful. Changes in external environment can kill the project. Termination by murder – political assassination to accidental

projecticide. Suddenness of project demise & lack of obvious signal that death is

imminent. Arrangements must be made for orderly release of the project team

members and their reassignment to other activities in parent organization.

The property, equipment and materials belonging to the project must be managed accordingly.

Project Final Report (project history) must be prepared.

The Varieties of Project Termination. Termination by Addition

When project is a more or less full fledged member of the parent organization, it lives its first year in a protected status – carrying less than an major share of overhead cost. As the year pass, the project is expected to assume the economic responsibilities of full scale.

Project personnel, property, and equipment are often simply transferred from dying project to the newly born division.

Projects are transformed according to standard procedure of regular operation.

The transition poses difficult time for PM.

The Varieties of Project Termination. Termination by Integration

Most common way of dealing with successful projects & most complex one.

Project personnel, property, material, functions and equipment are distributed among the existing elements of the parent organization.

The output of the project becomes a standard part of the operating system of the parent firm or client.

Integration of Personnel, manufacturing, accounting/finance, Engineering, information systems/software, marketing, purchase, distribution, legal etc, Risk identification and management.

The Varieties of Project Termination. Termination by Starvation

Slow starvation by budget decrement. Some time senior management does not wish to terminate an

unsuccessful or obsolete project coz of competition. The project budget might receive deep cut or series of small cuts. In effect the project is terminated but the project still exists as a

legal entity with sufficient staff to maintain some sort of presence.

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. Reasons projects fail:

Project organization is not required Insufficient support from senior management Wrong person as project manager Poor planning

Political Terminations Cross-cultural Terminations Senescence Terminations

The Project Termination Process

Decision Process The Implementation Process Project History Report preparation (ref page no-567)

Thank You & Best of Luck