Change management is the backbone of project cost control. After all, if there was never any change or deviation from your original plan, and things went exactly as they should, there would be little need for project controls. Being that change will occur on each and every project, it is important a project team has all the necessary training and tools in place to identify, measure, and control the change. There is nothing more frustrating to a team, and a client, than an unorganized change management structure and process.
Change Management can be defined as identifying and controlling any modification to an original scope of work and prime contract. This includes both cost and schedule. There are various forms of change, many of which impact both the cost and schedule. Such forms of change include but are not limited to:
There exist many forms of change, all of which are typically categorized into three defined types of change. It is important to recognize that there exist many names for the same type of change, but can vary depending on the company or industry. In addition, each type of change impacts one or more budget types including the original, current and forecast budgets. The following table represents the three common categories of change, the budgets they impact.Understanding the various forms of change is one thing, but being able to identify changes throughout the project life cycle is another. During the project it is critical that communication between all departments remain active. Every member of a team is responsible for change management and the identification of changes. Consider the following example.It has been determined that a new piece of equipment is required to complete a certain phase of a project that was not included in the original scope of work:
It is the responsibility of the project controls team to make sure communication is active and information flow is not broken. This can be handled through such methods as having weekly change management meetings, a change management information system in place, or daily staff meetings.
Preparing for Change
The initial phase of the change process includes establishing your strategy, preparing your change management team, putting into place your change management tools and generating your change management documents to be used. It is very important that all members of the project team understand the change management process, as well as the importance of each members contribution. Every person on the project is a part of the change management team!
Managing & Controlling Change
Identifying change is only the first step in the change management process. Once you have captured the cost and schedule impact due to the resulting change, you must then track and manage it until completion. Telling your client the estimated price to implement the change is important, but keeping them informed of the actual cost is even more essential.
Things you can do to manage change effectively include:
It is important that you continuously reconcile your change management log to your cost reports, contingency drawdown curves and any other supporting documents you maintain that may be impacted by changes.
Reinforcing Change
This phase revolves around communicating the effectiveness of the change process you have in place. Throughout the project life cycle you may find it necessary to amend your procedures and adjust the process to better fit the project environment or client needs. Things you can do to reinforce change include:
All in all, the change management process is a simple concept, yet is often a point of concern on various projects. It is very easy for a rapidly changing project to overwhelm a project team. Often times a team becomes so engulfed with keeping the paperwork and approval process in line that they lack the analysis and path forward initiatives that help to reduce future change impacts. Make sure that you have an appropriate structure in place that is sound and tested well before you start.Understand that changes will occur no matter what. Successfully managing and analyzing the change will ultimately help to prevent future impacts.