Projects start out with a planned budget and schedule, including all details that make up those costs and timelines. Change within projects is inevitable, but having proper change management procedures in place helps projects stay on-time and within budget in spite of change.
Project change management is the process in which project changes are requested and controlled. Since project changes can come from any number of departments on a project, Contruent offers centralized change management. For instance, the engineering team may request some design changes in engineering, the field management team can access the same change record and indicate any effects it may have in construction. The cost management team can price it out, which may result in additional scope for the contracts. Using a centralized change management software system allows the source of the data to be tracked, viewed and approved or rejected by the appropriate roles.
Common Project Change Issues
- It is not uncommon for changes to arise when performing forecasting for final costs. Estimate at Completion (EAC) are often affected by changes.
- Often project estimators are pressured to make accurate and quick forecasts in order to meet deadlines.
- Many project organizations use paper logs or have a manual paper trail to track changes because their project system does not allow for tracking changes.
Project changes often affect other teams and departments, and they can easily increase in complexity and cost. Depending on the project change requested, it could impact additional worksites, stakeholders and require numerous approvals and sign-offs. This is why it is helpful to have a change management workflow in place with pre-defined reviewers/approvers.
Alternatively, some organizations have too many unnecessary people involved when change management processes are not well defined. For instance, having the wrong approval personnel involved or having incomplete transactions occur when change information is not available. All of these issues can slow down period closing timelines. Waiting on manual approvals from multiple people is time-consuming and inefficient.
Often, as project changes are made, money is moved around. Moving money around requires more approvals, and often leads to additional changes requested. Over the years, the volume of changes and the types of changes have increased.
Project changes used to primarily focus on budget and remaining budget, as well as commitments, actuals, accruals and value of work done. They still do, but today they also focus on contracts, unawarded scope, approved and available funding, contingency for each element of scope, risks and contract pain/gain predictions. More project changes means more need for effective project change management.
Common Project Changes Tracked in Cost Management
All these types of project changes lead to changes in forecasts, transfers between accounts, changes in scope funding awards.
- Budget changes
- Forecast / Schedule changes
- Risks
- Funding
Who Should Be Involved In Reviewing Changes?
While anyone who is qualified to recommend a change should, those who ought to be in charge of approving or rejecting the change should be subject matter experts (like estimators, engineers, schedulers/planners, etc.), as well as control account owners or project managers who are responsible for their budgets. Each project organization will define their change review criteria and thresholds differently, but there is usually a hierarchical order to it.
Project Change Management Approaches
- Basic Approaches
- Manually create Change Orders only
- Manually create Trends and Change Orders
- Intermediate Approaches
- Use Workflows on Trends
- Use Workflows on Change Orders
- Advanced Approaches
- Use Monetary Authority levels
- Use Change Requests
- Use Workflows, Change Requests, and Monetary Authority levels
- Other Change Order Approaches
- Generating change orders from external sources (because change management is built into every Contruent module, an audit trail is provided for external source changes)
- Manually update account budget and EAC
- Update account budget and EAC using staffing plan data
- Update account budget and EAC using a resource-loaded schedule
- Linking Cost Change Orders to Purchase Orders and Contracts
- Generating change orders from external sources (because change management is built into every Contruent module, an audit trail is provided for external source changes)
A combination of project change management approaches can be taken on projects. Contruent Enterprise is capable of handling all of these change management approaches depending upon the simplicity or complexity of your project.
Project Change Management Benefits
Effective change management provides forecasts that are more accurate and completed faster. It eliminates the need for wet signatures, couriers, printers and unnecessary meetings. With change management software, the change order status is updated automatically for increased transparency. Contruent Enterprise’s built-in change management solution helps project organizations increase their project management maturity level, and aids in moving them forward from manual processes to automated processes.
Not only does Contruent Enterprise’s change management functionality provide a single live-source for identifying and approving project changes, but it also automatically informs other departments of the approval of trends and change orders to eliminate the need for maintaining manually updated logs.
The pre-determined change reviewers and approvers are automatically selected in the system based on ownership and authority. They are sent email notifications and change reports to monitor change order progress.
Having proper change management processes in place means that all project changes are governed according to established change procedures and plans. Working with project changes frequently, even daily in many large project instances, makes treating changes in real time an integral part of the cost management system. This means by month-end, dozens or hundreds of changes have gone through the process and each was addressed appropriately. This allows for the project controls system to automatically calculate an accurate forecast and budget values at month-end based on change management.
Learn more about the importance of change management in our change management whitepaper or our change management guide. To learn more about Contruent Enterprise’s change management functionality, download our change management datasheet or view our product page.