Assign a single capable person to serve as Project Manager (PM) responsible for the entire project through to completion if one is not already assigned or if the one assigned has proven ineffective. The PM should be someone who has previously been successful in similar circumstances in terms of project scope, scale, and complexity. If someone with requisite experience is not available to serve as PM then arrange for the experienced person to serve as a close adviser to the PM until a new plan is in place and performance relative to the new plan is on track.
Have the PM work with the client, the project team, management, and advisers to pull together a revised plan.Review the plan thoroughly with the PM, the project team, and with outside stakeholders, including the client, to be sure the path to completion, all the way through to client acceptance, is well formulated, understood, agreed to, and sensible.
Calculate the Estimated Cost At Completion (EAC) for the project through to client acceptance. Then rationalize revenue recognition with funds collected and available to collect going forward relative using the percent-complete method. The percent-complete method recognizes revenue proportionate to cost throughout the life of the project. As an example, if the inception to date (ITD) costs are 40% of the EAC, then ITD revenue should also be 40% of the total value of the project. EAC should be confirmed or adjusted monthly, and any corresponding changes made to revenue. IF EAC goes up (without additional revenue being added to the contract), then revenue recognition slows. (If EAC increases to the point that a loss is projected for the overall project that loss needs to be recognized in the current month.)
Stop taking new revenue; instead, build (or add to) a reserve account.
Track progress against the new plan, to see how the EAC changes, over a few months’ time.
Once performance against plan and EAC appear to hold steady, resume revenue recognition using the percent complete method.
Assign a governing board to meet weekly with the PM and team leaders to review progress, identify and resolve issues and problems, as well as review risks and appropriate mitigation and contingency steps.
Determine what is the reason why the project goes awry and what there is to learn from the experience and ensure they will be applied to future efforts.