Scope creep – a project manager’s worst nightmare, looming in the shadows of every project. Before you know it a project has grown beyond its original size, time frame and budget. However, managing scope creep (or even avoiding it altogether) doesn’t have to be an impossible task. Think about it like dieting:
How Scope Creep is like Weight Gain
We’ve all heard our project managers utter the exasperated phrase, “How did my project get so fat!?” And they make the same face we all do. That look of surprise and then exasperation, when all of a sudden our favorite pants or shirt are too tight.
How could this have possibly happened? What went wrong?
I call this the “one little donut” effect. One little donut for breakfast, a small french fries for lunch, a sliver of cheese cake after dinner, and before you know it, you can’t fit into your favorite pants.
For project managers, it becomes too many “servings” of scope creep.
PM’s tell themselves things like, “it’s too much effort to track the extra hours,” or “I want to do the customer a favor so I’ll throw something in.” Or they made a mistake and just fix it without telling anyone or documenting it. Now their project doesn’t fit inside its original budget.
It wasn’t just one “little thing” that did it. It was multiple little things. And eventually a bunch of those little things add up to a big thing and that big thing is significantly reduced project margins or put them in the red.
3 Steps to Putting Scope Creep in Project Management on a Diet
To manage scope creep and the “little things” that eventually add up to a serious erosion of project profitability requires putting your project on a diet. Here are three important steps to follow:
1. “Tracking changes takes too much time” is not a valid excuse.
Sure, on the front-end it takes a little more time. You have to create a detailed change order quote, discuss it with your client, get their approval, and then add it to the project plan. But at least you know in advance what the impact is on margin and have an audit trail and accountability.
The alternative is to do the reconciliation on the back-end to determine:
- why the project margin is so low;
- what happened that caused the project margin decrease;
- what was included in the change, and;
- who authorized the change.
It takes a lot less time to follow a proper change order process on the front end, than trying to figure out what went wrong on the back-end (if you can back track it at all).
2. Aggressively managing change requests reduces the risk of a “super-sized” project.
Many people struggle with managing scope creep because they don’t want to upset their customer. But if a significant change is requested, why wouldn’t you propose a change order?
“Throwing things in” is essentially the equivalent of discounting your project after the fact. Once you’ve thrown in the first item, customer expectations have been set. Now it’s going to be even harder to introduce subsequent change orders, not easier.
Among all the alternatives, the customer chose your solution because it represented the most value. Nothing has changed just because you’ve started the implementation.
If you’re going to be adding more value, you should be charging for it. A formal change order lets the customer know that anything “extra” that you offer has value as well. Think of the change order process as the equivalent of your weigh scale, telling you that there’s a cost associated with “super-sizing” your lunch order.
3. Excluding internal change orders is like saying the Coke you received instead of the diet Coke you ordered has the same calorie count.
Perhaps you under quoted, or maybe the wrong part was spec’d, but the customer doesn’t know, so the PM says, “let’s just fix it and move on.” Not having an internal change order process is major contributor to the disconnect between a project’s expected margins and actual margins.
A change order should still be created and approved internally, instead of by the customer. This approach allows you to cycle lessons learned during implementation back into the quoting process and ensure mistakes are not repeated.
They gave you the wrong Coke – don’t just shrug it off because it wasn’t your fault. Track what the impact is on today’s calorie count so that you’ll know next time whether it’s worth the hassle of fixing it, or whether you can live with the consequences.
At the end of the day, everyone would like to eat whatever they want and never gain weight. But everyone would agree, this approach is not likely to help you achieve your target weight.
As your company grows, one of the most important decisions you’ll make will be around formalizing a change order process and procedure to ensure that your company consistently produces positive project margins and results.
A formal change order process is often the difference between consistently hitting your project delivery schedules and project margins, or experiencing scope creep with no way of knowing how to get the project back on course.
Scope creep often happens because a formal change order process has not been implemented. Manual reconciliation after a project closes is not a great option and as many companies know, it rarely happens.
Much like staying on a diet, it’s all about the effort you put in at the front-end and then diligently track your progress.
Remember these three things to manage (or avoid) project scope creep:
- Track the changes up front.
- If you add more value once the project starts, charge for it.
- Track exactly how things didn’t go as planned, so they can go as planned next time.
Follow these steps your projects will stay lean and healthy.
If you’re ready to get a handle on scope creep and profitability, download our Project Profitability Scorecard for free to identify the gaps in your project revenue streams.
Or, for more information on how Promys PSA software can help control scope creep in project management, contact us and we’d be happy to discuss.