In many articles, the importance of Scope Change Management in projects is emphasized and highlighted and this is done with the issuance, presentation, and approval of Change Orders by the client. Keeping the list of orders up to date, both in preparation, those issued, and those approved, is the way to keep up to date the information that is included in progress reports, updated planning, and, ultimately, control of the progress of the project.
Among the advantages of Change Management, the following have been mentioned in some articles:
• Unnecessary work is eliminated or reduced. This is because any additional work after completing a “deliverable” can be considered a scope change, therefore, it must be approved before its completion.
• The risk of under-invoicing for Contractors is reduced since the possibilities of overwork not detected in time are reduced. Additionally, Control is increased for the owner, since only changes that have been approved and therefore previously reviewed are allowed.
• The project is kept within budget and within the program since each change that is approved entails a cost that is added to the project budget, keeping it updated. In the same way, the program is adjusted to include the new dates resulting from the approved changes.
Additionally, someone has written that issuing Change Orders helps increase the profitability of the project. Be careful. This is only partially true as explained below:
Increasing the budget does not mean increasing profitability. If we understand profitability as the relationship between invoiced revenue and the labor effort executed to produce the deliverables, the activities required to produce additional deliverables or deliverables “more complete than specified” originally, should be equally profitable as those originally planned.
The increase in profitability occurs only when having the same project team, Scope Changes refer to repetitive activities for which the human team is already trained to execute them with less effort and perhaps sharing resources from other activities in a simultaneous process. In this way, if the execution effort and/or the resources for its execution are reduced, then we can speak of “increased profitability.”
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