Improving Construction Change Management and Mitigating Risk
The most common operational practice for the construction industry is usually project-based. Most construction projects go through a multitude of stages, including planning, estimation, bidding, contracting, designing and engineering, down to the actual building of the project and finally delivering a finished project. Throughout the project, many decisions are going to need to be made on the fly, and most likely with incomplete information. Although the size, scope, and complexity of a project may vary significantly, each and every project you’ll work on will face the common element of change. That is why change management is considered such a crucial part of project management. It becomes very integral to the success of construction projects.
Change can be a good thing for your company…especially if it’s done right and you’re prepared! Having the proper systems and procedure in place is crucial if you want to set your team up for success and mitigate risk.
Table of Contents
What is Construction Change Management?
Change management is a term that refers to the preparation, guidance, and tools we give to individuals in an organization to help them to successfully adopt practices that supports positive organizational change. Although all organization changes are unique, as well as the individuals within that organization, there are structured approaches that will help influence people and support any changes that your organization might face whether it be internally, like your company structure or workflow. Or externally, like weather or regulatory changes.
What Might Cause Construction Change?
- Projects that overrun
- Differing site conditions
- Regulatory changes
- Missing information from contract documents
- Project Delays
- Labor Turnover
- Internal Restructuring
How Should I Manage Change?
The old saying is “Hope for the best, prepare for the worst.” The best way to prepare for change within your organization is to build a process (preferably before a change occurs). The worst thing you can do as a leader at your company is to do nothing. You’ve been in the business long enough to know that things go wrong on a construction site, so it is imperative that you take steps to prepare. Here are the five steps you should take to best manage change on the job site.
Identify:
The timing of change during a project has a significant effect on its impact. If you can head changes off in the feasibility phase of a project the impact on the overall project will have a much lower risk than if changes happen later in the construction phase of a project. By using eSUB’s FieldWorks Mobile app, your team can visually document job site conditions from mobile devices in the field and get access to related documents anywhere in real-time. By identifying the issue and allowing your team to quickly communicate that from the field to the office, you’re taking the first step to mitigating your risk and improving change management.
Assess:
Once you realize a change must occur in order for a project to move on, you must consider four primary factors that are going to be affected.
- Time
- Cost
- Scope
- Risk
These four factors are going to take collaboration among your team and some planning. You’ll need to ask yourself, with this change, how will it affect our project timeline? What will be the overall cost to make these changes? What is the scope of the work that needs to be done in order to execute these changes? And lastly what risk will these changes cause my business? Project Managers must weigh a project’s change against the entire project to assess the impact it will have on those four areas. Using eSUB’s Change Order Module, you can manage a single list of changes, whether they’re in-scope or out of scope and get pivotal approvals faster. Give your team members access to all the information they need to fulfill their responsibilities. Real-time status updates on any change orders that pertain to their specific job.
Approve:
Once you have an understanding about what the consequences of your changes will be, you’ll need approval. This brings us back to preparedness. If you already had a plan in place for when things go awry, the approval process can be infinitely quicker. Weather is a great example of something that will inevitably happen (like Snowfall in the Northeast in January) and can be planned for. Additionally to planning internally with your team, hopefully, you’ve also planned ahead with any general contractors your working with as well. It’s important to plan ahead and make sure you have some contract flexibility. Contract flexibility allows you to facilitate the changes that need to be made in order to get work on the job site done, without having to renegotiate contract terms. This is why it is also critical that you document any changes that your team makes with changer orders so you do not have to have a claims dispute with your GC. The last thing you want is to do a bunch of extra work and not get paid for all your work.
Formalize:
Once you have a plan in place to fix a problem you’ll need to finalize those changes with your GC as well as your team . Communication between the field and office should be seamless. So once you’ve gotten all of your information from your team, submitted any change orders to your GCs, then you can formalize the changes that need to be made in order to get your project back on track. The worst thing you can do at this stage in the change management process is to not document the work you’re doing. That’s why it is so important to have trained your team from start to finish on how to document from the very beginning, whether that’s through pictures, or change order, your team need to document it! You will always get paid for the work you DOCUMENT. You might not always get paid for the work you DO.
Execute:
Finally, you need to execute. And assuming you’ve taken all the necessary precautions, executing changes should be a breeze. You’ve got your team prepared, all documentation and approvals in order, and you’re communicating all your work to your General Contractor so they know what you’re doing. Nice work! Now with each change that comes across your plate in the future, you’re gaining experience in managing changes for your organization and helping them to mitigate risk. Each obstacle you overcome on the job site can be added to your repertoire and help you to be prepared for anything. Plus you’re preparedness, organization, and quick actions are sure to make you stand out as a great subcontractor to work with.
Summary:
Change is a common denominator in all construction projects, although the size, scope, and complexity of projects may vary significantly from case to case. Changes are inevitable in construction projects, that’s a fact. During a project, many decisions have to made, often based on incomplete information, personal experience, and assumptions of the construction experts. Change management is a critical problem faced with the construction industry. The effort of managing change orders has imposed a huge burden on project management. Changes are identified as the major cause of project delay, cost overruns, defects, or even project failure. More seriously, playing games on changes cause serious ethical problems and disputes in the industry. That is why it is so critically to take steps to prepare yourself and your team for eventual change to occur.
Reach out today to schedule a demo and learn how eSUB can transform your business into a well-oiled construction project tracking machine!
