Almost all construction projects experience some degree of change, typically in the work scope. A successful organization’s ability to effectively identify, analyze, document, and mitigate changes during a project is what differentiates it from less successful organizations. There are several key features of an effective change management program that allows construction managers to answer two questions:
- What is the status of the project now?
- What can we forecast our status to be in the future?
Establishing a project baseline for change management involves identifying what the project’s current status will be measured against over time. It can vary from project to project and may be determined by considering documentation including contract documents, staffing plans, equipment usage plans, installed quantities, expectations for cash flow, etc. Early identification of a project baseline allows construction managers to identify variances to the baseline from the start of the project when changes occur, capture the impacts of changes, and implement mitigation efforts to address new risks that may arise during execution.
Identifying and Assessing Variances
Identifying variances to the baseline can be one of the most difficult construction management tasks during a project. Often, it is not readily apparent that a variance has occurred until after the impacts manifest themselves in the form of cost overruns and/or schedule delays. At this point, it is too late to mitigate the negative impacts to the project. Selecting the right project data to report against the baseline, as well as determining how to report this data, can be critical in the timely identification of variances. Typically, the most basic reporting mechanisms are built around variations to the baseline schedule, project costs, and productivity. However, for large complex construction projects, reporting can become a comprehensive task involving detailed reporting mechanisms for key performance indicators.
In addition to identifying variances to the baseline, a construction manager must also oversee the recording and assessment of the variance’s impacts. If a change is identified early enough, it may be possible to implement tracking mechanisms that discretely record any cost and schedule impacts before they occur. However, as previously discussed, baseline plan variations are often not identified until after the impact is experienced. In these instances, an effective change management program can reference the contemporaneous project records to assess when the change occurred and measure the impacts.
Planning and Tracking Changes
Changes on a construction project do not occur in a vacuum. Often, multiple variations on a project can amass and have a cumulative effect beyond what their individual impacts may have been. Therefore, the quality of the information gathered during the identification and assessment of individual variations is critical to successfully identifying their root causes and managing change on a project.
After identifying and assessing variations, construction managers can implement methods to account and plan for the impacts of these events. These methods can include inserting new activities into a schedule, creating new cost codes for work-related changes, etc. In many instances, the extent of a change’s impacts is not realized until the work is complete and the data verified. However, construction managers should track progress performance whenever possible to have data to forecast potential impacts, and use this as a basis for the recovery of time and costs where appropriate.
As previously noted, the cumulative impact of multiple changes on a construction project can often outweigh the impact measured by a construction manager. In these instances, risks to a contractor’s or owner’s ability to be compensated for an unaccounted-for impact is increased by the lack of contemporaneous project data that could have been used to assess the impacts in real time.