Project Change Management

As the project moves from phase to phase and overall control and leadership move from one entity to another, various agreements are reached to assure orderly execution of the work. An effective change management process recognizes change as a modification to an agreement between project participants. Unfortunately, the upstream party often sees the change in a different light than the downstream party. For example, the owner might see a change to a painting specification as minor since the broad scope of the project is unaffected, whereas the painting contractor might see the change having a significant impact on his contract cost and schedule. 

The five elements of a project that are subject to change and that will affect the change management process are:

• Project scope
• Project organization
• Work execution methods
• Control methods
• Contracts and risk allocation 

Changes to these elements will have different effects during various project phases. In addition, the interaction of these elements becomes significantly more complex as the project proceeds. Change management should vary with the type of project, the project phase, project agreements and contracts, and project schedule. An effective change management process should allow for the complex dynamics that will likely develop, and should provide a disciplined approach for recognizing, evaluating, and implementing changes in a timely and cost-effective manner.
(SP43-1, p. 7)

The Research Team identified five principles of effective project change management as indicated in the figure below. (SP43-1, p. 11)

Following are some of the best practices recommended by the Research Team for managing project changes in each phase of the project life cycle. Refer to the publications for a complete listing. (SP43-1, p. 25)
 
Business Planning Phase

• Establish a baseline scope early in this phase in order to identify and recognize change.
• Develop an initial overview of a contracting strategy that ties to the baseline documents for scope, schedule, and cost.
   

Project Planning Phase

• Develop agreements that clearly establish project scope, schedule, and cost.
• Establish a tolerance for changes since it is comparatively inexpensive to incorporate changes this early in a project.
   

Project Scope Definition Phase

• Ensure that the increasingly detailed scope that is being developed continues to reflect the business and planning objectives.
• Ensure that experienced and knowledgeable personnel are involved in evaluating any proposed changes to make sure changes are beneficial and not detrimental.
   

Detailed Design Phase

Detailed design is the phase that is most susceptible to changes. The effect of changes becomes increasingly more costly and disruptive as the schedule elapses.

• Ensure change management procedures are part of the project execution plan and are communicated to and understood by all parties.
• A benchmark project scope should be established and frozen, with changes managed against this base scope.
   

Construction Phase

Changes in construction can have a significant impact on cost and schedule.

• Owner must ensure the base scope of work is well defined and must be willing to freeze the scope to establish a benchmark.
• Establish a change management process early and integrate new organizations, including those that are downstream in the construction process, to aid in the timely identification of changes.
   

Startup Phase

• Reconfirm the business plan and be aware of any changing market conditions that require a change in scope.
• Ensure that responsibilities at time of turnover are clearly documented and understood.

The team found an abundance of Change Management Systems (CMS) in use in owner and contractor organizations. The team discerned there was a need for a broad based CMS, so they developed a prototype to assist project managers to manage change more effectively. The prototype consists of two levels of flow charts. The first level is a “macro” flowchart that shows the five change management principles necessary to manage change. The second level is a series of flow charts that show the specific management processes involved with each of the Level 1 “macro” principles. Each industry, company, and/or project will need to tailor this system to its specific circumstances. It is anticipated that tailoring will be done at Level 3 and beyond. For this reason, a CMS with only Levels 1 and 2 is contained within the prototype. (SP43-1, p. 39)

SP43-1, Project Change Management
This prototype change management system (CMS) is intended to be a tool to assist project managers to manage change more effectively. The prototype CMS is presented in outline and flow chart format.