Concepts
Managing change orders effectively is paramount in ensuring the success of construction projects. This is particularly relevant for anyone preparing for the PMI Construction Professional (PMI-CP) exam, which extensively covers the mastery of such key processes.
For starters, the change order process is a practice in project management that entails making adjustments to the original agreed-upon construction plans. This can include changes to the schedule, scope, or cost of the project due to unforeseen complications, client modifications, or compliance issues.
Here, we will delve into how to systematically manage and implement this process to accomplish maximal project benefits and value.
I. Understand the Change Order Process
Before plunging into the management of change orders, understanding the process’s intricacies is essential.
- Identification: The need for change is recognized. This can occur because of site conditions, errors or omissions in design, or changes requested by the project owner.
- Assessment: The impact of change on cost, time, and schedule is evaluated.
- Approval: The client or stakeholders approve the proposed changes.
- Implementation: Once approved, the changes are made on the ground, and change orders are confirmed in writing.
- Revision: The necessary adjustments to the plans, schedules, costs, and contract documents are made.
II. Implement the Change Order Process
Implementing the change order process effectively involves a few key steps:
- Documenting: All requests for change must be documented in writing to create a paper trail that can be referred to if disputes arise later. Emails, memos, change order forms are means to document these changes.
- Reviewing: Each change order request should be thoroughly reviewed considering its effect on project cost, time, and quality.
- Authorizing: After the review, the change order should be formally authorized by the stakeholders involved.
- Tracking and Updating: After a change order is implemented, the project manager should update the cost baseline, timeline, and project documents and track progress against the updated baseline.
III. Manage the Change Order Process
For effective management of these processes, the following steps should be undertaken:
- Develop a Change Order Policy: A distinct procedure should be developed for different types of changes. It is advisable to include provisions for common types of changes encountered in construction projects.
- Utilize Tracking Systems: Use software systems to log and manage change orders systematically.
- Encourage Communication: Regular communication with the project team and stakeholders can significantly minimize unexpected changes.
- Train Your Team: Regular training ensures your team understands the change order process and executes it properly.
IV. Deliver Project Benefits and Value
The ultimate goal of effectively managing change orders is to deliver project benefits and value. This is achieved by minimizing project delays, avoiding cost overruns, ensuring project quality, and satisfying stakeholders’ needs.
For instance, incorporating a change that improves the building’s energy efficiency can increase the project’s value despite potentially raising costs. The long-term savings from reduced energy costs would outweigh the temporary rise in project cost.
In conclusion, understanding and effectively managing the change order process can significantly impact the outcomes of construction projects. By accurately implementing the process, maintaining smooth communication, and focusing on value-driven decisions, construction professionals can effectively manage changes and ensure project success.
Answer the Questions in Comment Section
A change order process commences when the project is undergoing a significant change that can affect the overall cost and schedule. (True/False).
- True
- False
Answer: True.
Explanation: Change order in construction projects ignites when changes significantly impact the cost, schedule, or performance of the project, requiring adjustments in the original project plan and contract.
What is the first step in managing the change order process effectively?
- A. Documentation
- B. Approval
- C. Assessment
- D. Implementation
Answer: C. Assessment
Explanation: The first step in managing change orders is assessment. It’s essential to study and understand the change, its potential impact, and implications on the project before proceeding to other steps.
It’s unnecessary to document the series of changes in a project regularly. (True/False)
- True
- False
Answer: False.
Explanation: Detailed documentation offers a clear paper trail that allows disputes resolution, provides a legitimate record for auditing, and is an integral part of change order management.
Effective management of the change order process often leads to_______.
- A. Project delays
- B. Escalated project costs
- C. Value delivery
- D. Project cancellation
Answer: C. Value delivery
Explanation: Proper management of change orders ensures that changes are accurately assessed, costed, and implemented, leading to the value delivery of the project.
The change control board (CCB) is not important in approving change orders in a project. (True/False)
- True
- False
Answer: False.
Explanation: The Change Control Board plays a crucial role in reviewing and approving change proposals, ensuring they align with the project’s goals.
In managing change orders, you should____.
- A. Implement changes immediately
- B. Avoid involving stakeholders
- C. Allocate time for a thorough review
- D. Ignore the original project plan
Answer: C. Allocate time for a thorough review
Explanation: Thorough review of changes ensures they are necessary and beneficial to the project, hence an important step in managing change orders.
Stakeholder engagement is unnecessary in managing change orders. (True/False)
- True
- False
Answer: False.
Explanation: Stakeholders’ cooperation, understanding, and approval are important in facilitating change order processes and implementation.
What is the key to successful management of change orders?
- A. Rushing decisions
- B. Detailed documentation
- C. Ignoring the cost implications
- D. Skipping the review process
Answer: B. Detailed documentation
Explanation: Detailed documentation provides factual evidence of changes, supports auditing, and assists in dispute resolution.
Change order process ignores the project’s original plan, cost, and schedule. (True/False)
- True
- False
Answer: False.
Explanation: The change order process essentially revolves around the project’s original plan, cost, and schedule. Any changes proposed are balanced against these initial project parameters.
What is the last step in managing change orders effectively?
- A. Documentation
- B. Approval
- C. Review
- D. Implementation
Answer: D. Implementation
Explanation: The final step in the change order process is the implementation of approved changes, ensuring they are executed accurately, effectively, and promptly.
Erroneous management of the change order process can lead to_____.
- A. Project benefits and value
- B. Project disputes
- C. Project improvements
- D. Value delivery
Answer: B. Project disputes
Explanation: Improper management of change orders can lead to misunderstandings, clashes of interests, and disputes between the project parties.
Change order requests should always be approved. (True/False)
- True
- False
Answer: False.
Explanation: Not all change order requests are necessary or beneficial to the project. It’s important to assess, review and determine if a change order aligns with the project’s goals before approval.
This blog post really helped me understand the importance of having a structured change order process in construction projects.
Can anyone explain how to best integrate change order management with existing project management tools like Primavera or MS Project?
Fantastic blog post! Implementing these steps has greatly improved our change order process.
What are the top KPIs you track to ensure your change order process is effective?
We recently started using digital signatures for change orders. It’s been a game-changer in terms of approval times.
Thanks for this insightful post!
Great article! It clarified many doubts I had.
One question: How do you prioritize change orders? Is it based on budget impact, client request, or something else?