In construction work of any scale you have to expect the unexpected, and even the most detailed plans may not survive contact with physical reality. But, while changes are inevitable, the resulting inconvenience and delay may not have to be if they’re managed correctly. Upgrading your tech can help with that.
Despite being crucial to just about every job, change management is rarely given the consideration it deserves in any firm’s process. A disconnected mix of emails, spreadsheets, paper documents, and calls is what you’ll usually find, and it’s likely this is having a measurable effect on the bottom line.
Poor Change Management Hurts your Margins
It’s estimated that construction projects accrue an extra 5% to 10% of their overall costs as a result of change orders and contract modifications. In a $10 trillion market as estimated by Oxford economists, that adds up to somewhere between $500B and a trillion dollars. That makes it a seriously big problem, but how is it impacting your company day to day?
First, and perhaps most importantly, it’s slowing down your work. Is that change order in an email, or did we only talk about it in that call? Did anyone put it in the Excel sheet? Is it in the ERP? If so, do the right people have access to it? If neither your office nor your field team has a single source of truth for potential or in-progress changes, just finding the info you need can waste hours or days.
This is especially problematic when, as is usually the case, changes aren’t surfaced and addressed until they’re impacting the schedule. An hour doesn’t sound like much until everyone is tools down while the decision is being made.
That means it’s hitting margins, too. If change events aren’t being managed properly, you could be paying crews to wait around, or alternatively they may be performing work outside scope. In that case the subcontractor may have to take on the immediate cost, doing work on spec and passing an unpredictable bill to you later.
Documentation also suffers when organization is lacking. If a change is not properly documented, it can’t be properly billed for, plain and simple. You can make all the right decisions, but if you’re not documenting it well enough you end up holding the bag when asked for evidence that a change was necessary. Even if it works now, this approach doesn’t scale.
Once the change order is in your ERP, you can make sure it’s documented properly, but what about the changes that don’t make it that far? And what about the change order opportunities that are never properly identified to begin with? It’s not just about putting change order docs in one place, but managing a potentially chaotic change management process of which the ERP is only one part.
Lastly, communication is difficult when there are multiple platforms and formats to juggle. The faster changes are communicated to upstream and downstream partners, the sooner all those pieces are moving in harmony. That can’t happen if the conversation is fragmented across different places with different access levels.
Putting the Right Data into the Right Hands
If any of this sounds like friction you might encounter, don’t worry: A single, dedicated solution to change management helps mitigate all these problems.
Keeping everything in one place means there’s always an answer when someone asks where some piece of information is. No hunting or searching puts the right data in the right hands faster, keeping projects moving even as changes occur. You can even automate some of the processes so the question doesn’t have to be asked.
Documentation staying in one place means it’s both easier to respond quickly when needed, and to plan ahead for different scenarios. A dedicated solution communicates change to everyone who needs to know, making sure no one is out of the loop.
Fewer delays means more on-time completions, and driving down risk allows for better cost control — all of which contribute to predictable project delivery and a more reliable bottom line.
You don’t need to give up email, spreadsheets, or your familiar ERP system, either — those tools still have their place. However, they weren’t designed to be a cohesive solution for something as complicated and important as change management, and shouldn’t be shoehorned into that role. A dedicated system not only helps on its own, but helps your team use the tech it already has more effectively.