In a previous article, we addressed scope creep and a number of factors that contribute to it and provided some basic preventative measures. But what do you do when scope creep does occur? Here’s what you need to know to effectively manage the change control process.
Why You Need a Change Control Process
Change happens. Change is inevitable in most engineering projects and can become problematic if there is no viable change control process set in place. Identifying and handling those changes are the differentiating factors of a successful project versus a project rife with issues. This task may not always be simple, but it is not impossible.
Project managers, working for the good of both their engineers and their clients, are in charge of navigating the project to completion. This means that, as changes arise, they will need to have the necessary processes in place that will allow for a successful implementation of the change on time, within budget and to the client’s satisfaction. Keep in mind, change control is not an autonomous process as it has several interdependent, moving parts. As a project manager navigates their way through a project, communication between stakeholders and team members is essential in keeping the project running on all cylinders.
The most common sources of change generally relate to scope, schedule and budget.
A change in the nature of the project is considered a change of scope. Scope changes can occur in many forms, including the following:
- Additional tasks
- Client changes focus
- Unforeseen site conditions
- The engineering team encounters challenges
A schedule change occurs when the timeline for completion of the project is altered in some capacity. This can happen in several ways, including:
- Client pushes up the delivery date
- Materials are back-ordered, delaying the project
- Engineering finishes ahead of schedule
If there is a change in scope or schedule it will most likely affect the budget. Here are a few examples that cause a budget change:
- The project requires more manpower than originally estimated
- Unexpected materials needed
- Client reallocates a portion of the budget to another project
By understanding and targeting sources of change, you can proactively make adjustments in real time to keep the project moving forward.
Steps in the Change Control Process
Flexibility is at the crux of every successful project. Skilled and adept engineers and stakeholders understand changes will occur. Having a project manager that is adept at utilizing the change control process will only strengthen the outcome. In addition, maintaining flexibility allows for improvements in the project, which should ultimately create a higher quality project and experience for everyone.
Project managers can utilize the following steps to enact the change control process without derailing the progress of the project:
Understand the Contract
Whether you have a lump-sum or cost-plus-fee contract, it is imperative to understand the terms and conditions regarding changes in scope, labor escalations and other. Without knowing what the contract entails, handling change may lead to additional costs that cannot be recovered.
Recognizing When Change is Needed on a Project
As a project progresses, be vigilant in spotting any sources of change. Once a change in a project becomes inevitable, you will need to assess the degree of change. Does the type and size of the change give rise to the need for additional resource allocation or budget revision? A quick example would be a schedule change that would only affect the outcome by a couple of hours but ultimately would not offset the deliverable date. Changes of that nature should be identified but do not necessarily grant the need for a revision to the plan. Setting a threshold will allow you to determine what really needs additional attention.
Revising Your Plan in Response to Change
Before communicating with the key stakeholders, an inventory of available resources must be taken and the costs relating to the change must be calculated. This also would be a good time to check whether your fringe and overhead rates are still current. Presenting data that adequately supports the additional expense is key to getting your client on board, whether the change is imposed by your firm or by your client. Take a strategic and pragmatic approach to address the changes wholly while maintaining a realistic outcome.
Communicating and Championing Change with the Team and Key Stakeholders
When it’s time to communicate change, having a plan that solves potential challenges is critical to successfully gaining buy-in from your team and stakeholders. Highlighting problems without solutions can create seeds of doubt within all parties involved. Communication should only occur after you have created an alternative plan that covers any new changes. Project managers who are equipped with thoroughly-calculated plans appear competent and gain the respect of both their team and stakeholders on the project.
Bottom line, change is not something to be feared but, rather, championed. Project managers who adopt a proactive and progressive change process positively impact the project experience for their team and clients, creating a stellar reputation and a healthy funnel of repeat clients and referrals.
Meet the Author
Gary Alongi, CPA, CCIFP®
Aldrich CPAs + Advisors LLP
Gary Alongi brings over two decades of experience helping his clients reach their highest level of success. His extensive knowledge of the construction industry allows him to provide value-added services that save clients money, helps them comply with regulations and requirements, and take advantage of opportunities helping them grow their business. American Institute of Certified... Read more Gary Alongi, CPA, CCIFP®
- Audit and assurance services
- Certified Public Accountant
- Overhead rate (FAR 31) audits and compliance
- Certified Construction Industry Financial Professional (CCIFP®)