Do late project changes kill your budget/profit?

The project was doing fine a few weeks ago, but that was then – this is now.  Ever since then it has been one little change after the other.  Nothing really big – but the client’s asked for this little add on, and that little bit.  Some of them were super easy and some weren’t.  Now these new bits and pieces are becoming interrelated and you’ve lost track of which relate to which and costs are mounting and you’re wondering if you’re going to maybe barely break even on your project… This isn’t that uncommon.  It happens on big and small projects.

It’s that dreaded “scope creep”.

The gradual (and sometimes not so gradual) increase in work that occurs, usually while budget and timing aren’t changing.  The PMI (Project Management Institute) has some best practice techniques you can apply to help you avoid these situations in the first place.

Some of the concepts you should be familiar with are :

  • The Project Baseline
  • A Formal Change Request Process (including a change request form/template)

Your baseline is the agreed upon project scope (all the elements/features you are agreeing to deliver), the timing (schedule and milestones) and the terms overall for the project.  It defines the agreed upon state of what the end result of the project is to be.  This is CRITICAL if you want to be able to manage change later.  If you never FORMALLY review/agree/sign this – then who is to say that you didn’t agree to all those requests late in the project cycle?

It can become an ugly “he said” “she said” fact-finding mission to see if maybe someone on your sales or project team inadvertently promised something you weren’t aware of, or maybe the client is trying to pull a fast one on you, or they simply didn’t understand what you meant when you outlined what you’d be delivering.  It can be a relationship killer to go through a messy scope renegotiation late in the project.  Identify what you will be delivering and when.

Go through a Change Management process in advance – whereby you declare how you will handle changes to agreed upon scope later in the cycle.  Identify how this will be documented, how you will identify any additional time/cost related with such requested changes and how you will seek their approval/authorization before altering the project’s original baseline.

Not all change requests need to be billable

Changes can originate from defects, business environment changes, or client requests.  But at least with a formal process in place you identify yourself as a professional and you take back control of the rate of allowed change to the project (HIGHLY desirable).

This ultimately protects YOU and makes sure that the Client is clear on what they are getting.  And potentially could save you a relationship in the long run (not to mention profitability).

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