Can You Afford Not To Manage Change Orders On Your Projects?

For those involved in delivering engineering and construction projects, one would rarely expect having a project without changes. Those changes could result due to many reasons including but not limited to intent of documents not “reasonably inferable” and corrections required, unknown conditions necessitate changes, owner’s requirements change, changes in code or changes in interpretation of code. specified product no longer available, consider new product because of cost savings or other benefits and specified product inappropriate.

That is why it is a must requirement to have a project change control system that defines the processes by which the awarded contracts can be modified. The process will define the document templates, workflows, required documentation, tracking reports, key performance indicators and approval levels necessary for authorizing changes to the project. Using Project Management Information System (PMIS) like PMWeb will bring transparency, accountability and improved efficiency to the change management system.

In engineering and construction projects, there are usually two change processes that needs to managed. The first is the Potential Change Orders, sometimes also known as Anticipated Variation Orders, that will be raised by the contractor directly. Those are changes that could entail both additional cost and additional time. The contractor needs to provide all supportive documents and links to project’s records which are relevant to the potential change order. The authorized project owner representative will review those potential change orders and advise if the contractor’s request is approved or rejected.

If the Potential Change Order is approved, then the second change process may commence. This will be the Change Order process which will be issued by the authorized project owner representative to the contractor. The change order could be issued in response to the change that was part of a potential change order or issued as a result of additional work that the project owner has requested. The change order could have cost and time impact and will adjust the awarded contract when it is approved.

As stated earlier, both potential change orders and change orders need to include all supportive documents that are relevant to the submitted change. Those supportive documents which could include drawings, specifications, pictures among many others will be stored in PMWeb document management repository. It is a recommended practice to create a folder called Change Orders and then have subfolder for each potential change order and change order. Under each subfolder, all documents that are relevant to that change shall be uploaded even if the same document was already uploaded under another folder.

In addition to attaching those relevant documents, the potential change order or change order could be related to other project communications like daily reports, meeting minutes, correspondence, submittals, RFIs, request for inspection, permit, occurrence report among many others. Those records need to be linked to the relevant potential change order or change order record.

PMWeb also allows linking project’s email communications to the potential change order or change order. This will require creating a project email address for which all email communications need to carbon copied to this email address. PMWeb will then allow setting the email import for which all project’s email communications copied to that email address. This will then allow linking those to the relevant change event.

Both potential change orders and change orders will have a pre-defined workflow steps to determine the roles, responsibilities and authorities in reviewing and approved those changes. Those will be part of the responsibility assignment matrix (RAM). PMWeb workflow will be used to map those steps and conditions that could be related to approval authority levels among others.

The real-time data for all captured potential change orders and change orders will become the source for monitoring, evaluating and reporting the status of changes that could impact the project’s approved commitment and completion date. The report layout can be designed in any desired format. For example, the project change order will usually include a log of change orders with donut or pie charts to show the change orders by reason, status and project or contract.

For senior executives who are responsible for managing programs, portfolio of projects or all projects across the enterprise would usually require less details on the reported change orders. Although the data to be reported on is the same, nevertheless the report or dashboard would be more at summary level. For example, the interactive dashboard below assumes an organization who have projects that are spread across the country and maybe other countries. This brings the requirement to view projects by location for which the bubble size is relevant to the change order value. The dashboard also has a summary log of change orders and a bar chart for change orders by reason for change and status of change order. When the executive stakeholder views this dashboard, clicking on any project on the map will filter the data in the other sections to reflect the change order data specific to the selected project.

Similar to all other project management processes that PMIS technology like PMWeb is used to enforce implementing their set procedures, organizations will benefit from capturing the right data, in the right format, by the right team member at the right time as well as benefit from having real-time single version of the truth on the performance and status of the managed process. Since a PMIS like PMWeb is designed to manage all project management processes across the complete projects portfolio of the organization, the additional benefit of having integrated project information is providing project team and other stakeholders with the insight to make better and faster informed decisions.