We now come to the final stage in any project—evaluating the result and closing the project. As we will see, there are many ways to do both, some relatively formal, some quick and dirty, and some rather casual. We discuss evaluation first, in the generic sense, and then discuss a very specific and often formal type of evaluation known as the project audit. Following this we discuss termination of the project.
There are many different measures that may be applied in a project evaluation. Project management team may have particular areas that they want to evaluate for future planning and decisions. One study identified four important dimensions of project success.
Typical steps in a project audit are:
An audit can be conducted at three levels:
1.3 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. As part of the project termination, contracts will be closed with all the service providers.
A contract is an exchange of promises between two or more parties to do, or refrain from doing an act, which resulting contract is enforceable in a court of law. In the project or program context, contracts typically involve the exchange of money in return for goods or services.
If an organization decides to “buy” from one or more outside sources, it must select the type of contract it needs. In selecting what type of contract to use, the primary objective is to have risk distributed between the buyer and seller so that both parties have motivation and incentives for meeting the contract goal.
Factors of Influence:
This contract is handled by the in house team of the organization which is floating the contract. That means the overall supervision and responsibility lies with the in house department.
There are multiple type of contracts in this category.
18.104.22.168 Time and Material Contracts
Time and material (T&M) contracts (sometimes called Unit Price Contracts) contain characteristics of both fixed price and cost reimbursable contracts and are generally used for small project cost amounts. These contracts may be priced on a per-hour or per-item basis (fixed price) but the total number of hours or items is not determined (open-ended cost type arrangements like CR contracts)
Enterprise Resource Planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources.
Finance – gathers financial data and generates reports such as ledgers, trial balance data, overall balance sheets and quarterly financial statements.
Human resource management – gathers data and generates reports about such things as employee recruitment, performance reviews, training and professional development, performance reviews, mediation and exit interviews.
Inventory management – gathers data and generates reports about non-capitalized assets and stock items.
Supply chain management – gathers data and generates reports about materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
Improved business insight
|From real-time information generated by reports|
Lower operational costs
|Through defined and more streamlined business processes|
|From users sharing data in contracts, requisitions, and purchase orders|
|Through a common user experience across many business functions and managed business processes|
|From the back office to the front office, all business activities have the same look and feel|
Lower management and operational costs
|Through uniform and integrated systems|
|Through improved data integrity and financial controls|
The ABC analysis helps to focus control efforts in areas where it is most needed. The basis of classification is usage value of the items and not their physical quantities. This classification will help the organization to identify the items which are of high importance.
ABC analysis is an inventory categorization method which consists in dividing items into three categories (A, B, C): A being the most valuable items, C being the least valuable ones. This method aims to draw managers’ attention on the critical few (A-items) not on the trivial many (C-items). The classification can be extended to D,E,F etc., if needed.
EOQ is the amount of inventory to be ordered at one time for the purpose of minimizing the annual inventory cost.
If A = Demand for the year,
Cp = Cost to place a single order
Ch = Cost to hold one unit inventory for a year
Q = Order Quantity
Below figure shows the relationship between various costs
EOQ is calculated as
Example: Sam runs a business for gym equipment. Annual demand for the TricoFlexers is 16,000. The annual holding cost per unit is $2.50 and the cost to place an order is $50. What is the economic order quantity?