Got Scope Creep Presentation by Axium

Axium © 2007

Got Scope Creep?Got Scope Creep?

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Agenda

Understanding your enemy

Systems and tools

Project structure and management

Changing your culture

Managing client expectations

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Understanding The Enemy

Scope Creep defined:

Performing extra services on a project without compensation

Owner requested

Doing the “right thing”

Seemingly insignificant

Understanding • Tools • Structure • Culture • Expectations • Wrap Up

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Why do we care about scope creep?

Erosion of profit

Limiting firm wide resources,one project at a time

Devaluing services

Can easily be missed until its too late

Cancerous to firm culture

Opportunity cost

Dramatic way to increase margins


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What causes scope creep?

Admirable company Visions / Missions

Long entrenched tradition of providing “exceptional service”

Culture of obligation

Lack of recognizing when it happens

Lack of recognition of impact of “insignificant” extras

Lack of awareness of negotiated scope of work

Limited fees, but unlimited work

Belief it will help win more work

Conflict avoidance


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When do you recognize scope creep?

Was that short extra meeting part of the contracted scope of work?

Did that extra submittal cost theproject anything?

Was the time spent on that minor requested change not as valuable as contracted work?

Are those phone conversations after meetings part of the budgeted tasks for the job?

Remember that scope creep can rear it’s ugly head in many different forms


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What Are We Trying To Achieve?

New internal culture

Comfort in addressing

Visibility to scope creep occurrences

Heightened client awareness


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How Do We Get There?

Proper systems

Proper project structure

Defined roles and responsibilities

Feedback mechanisms

Change internal culture

Prepare client expectations


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Systems and Tools

Taking the right steps

Start with the proper tools

Success hinges on set up and awareness

Leverage Technology

Ensure flexibility within standards

Provide appropriate access

Put mechanisms in place to gather feedback


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System Precautions

Non – industry specific applications

“Specialty” packages for different functions – not centralized

Complex systems that hinder adoption

Integration

Under or overbuying – ROI

Total cost of ownership• Price

• Setup

• Training

• Support and maintenance

CAUTION


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System Must Haves

Project based accounting system

Flexible work breakdown structures

Task management

Flexibility to define new phases and tasks on the fly (additional services)

Distributed access – appropriate level of access to the system for those with responsibilities

Real time – or darn close to it • Minimum at least weekly results

Management Commitment To It’s Success


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Structuring Projects

Initial project structure is important because:

Provides defined scope of TASKS

Can be compared and matched to the contracted scope of work – limits and client expectations

Prepares ahead of time for scope creep that WILL happen

Provides a way to monitor and have an early detection system

Sets mindset and expectations for Project Manager (PM), team members and client


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Minimum Work Breakdown Structure: Project / Phase / Task

Some terminology definitions for today’s discussion:

Phas e des cription

Tas k des cription

Activity des cription

Phas e

Tas k

Activity


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Structuring Projects - Phases


Use phases to track contract and billing information and to capture actual time & expenses.

Phases are a component of a project’s work breakdown structure. A phase reflects a stage of a project’s lifecycle. You set up phases to help track costs and manage your client billing. Time must be entered to the lowest level phase that is set up.


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Example:

Des cription

Oakland Heights Medical Clinic 04-107

Schematic Des ign

Des ign Documents

Cons truction Documents

Bidding & Negotiation

Cons truction Adminis tration

ID


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Plan ahead

Incorporate out of scope phases from the beginning, even when nothing is identified

Example:


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Allow access to manage phase status

Inactivate closed and upcoming phases to eliminate incorrectly charging time

Example:


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Structuring Projects - Tasks


Use tasks as a planning, budgeting and reporting tool.

Tasks are steps to be taken to achieve the objective for the parent phase. Tasks are a sequence of “to-do” items that culminate in getting the work done to complete the phase. While tasks are important in accomplishing the work, we are not capturing actual data such as hours at the task level.

Utilize for bottom up estimating

Budget to task level

To-do list

Percent complete / status

Don’t charge time to


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Example


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How low do you go?

Vague – while flexible = kiss of death

Detailed – facilitates change control• Small jobs require finer detail control

• Larger jobs can afford larger task chunks

• Determine a maximum task value for different size jobs as your rule of thumb

i.e. large jobs, not task greater than $10,000 in value


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Assign tasks to individual resources and provide for feedback mechanisms on those tasks from individuals

Enter percent complete at the task level

PM determine phase % complete from feedback on tasks


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Don’t overlook any areas!• Contain all tasks that affect

Schedule

Budget

Resources

• Identify tasks that will be assigned to subconsultants

• Have separate tasks for project management activities


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Standardize as much as is possible• Consistency

• Communication

• Analysis

• Learning from past

Utilize templates• Don’t re-create the wheel each time

Update templates after post mortems• Lessons learned


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Knowing your Contract

If you know your Tasks – you should now know your contract (1:1)

Design services contractual language that limits the quantity of each piece of work

Defined limits on items by number, hours or dollars (i.e. number of meetings)• Takes the guesswork out of what is in scope or out of scope

Internal management• Breaking out responsibilities to phase or task managers ensures

greater scrutiny – no need to know contract as a whole


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Roles / Responsibilities

Project Manager’s shift in thinking• From: “How will this request affect my project?”

• To: “Who will become responsible for this request and will it fit into their defined tasks?”

Project Manager• Management of the project as a whole

• Management of phase or task managers

Phase Manager or Task Manager• Ownership / accountability for “bite-size”

portions of the phase – the tasks


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Data Collection / Feedback

Daily time entry – ideal (phase level)

Daily task updates (% complete) – ideal

Weekly project review – a must

Monthly PM project reviews

Close out post mortems


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Weekly Review

PM and team

Status of tasks

Snapshot review• Labor

• Expense

• Consultant


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Monthly PM Project Reviews

Principal / Accounting / PM

Set the stage: Projects = Profit Centers

Timely and accurate analysis / data on hand

Appropriate reporting calculations• Earned value analysis

• Project earnings / profit

How to ask about out of scope work


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Monthly PM Project Reviews

No confrontation – provide support

DO NOT conduct reviews unless they are outcome based – must produce ACTION plans

Action plans get incorporated into project structure• Tasks

What

Who

When


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Post Mortem

PM and task managers

Examine budget• Phase and task level

• Was the budget sufficient?

• Should the templates be adjusted?

• Were additional services captured?

• Were additional service opportunities missed?


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Review – Our Project Lifecycle

Step 1: Estimate our project• Utilize a template so standards and lessons learned are

incorporated

• Determine appropriate level of detail for type / size of job

• Utilize preferred method of estimating, but eventually build estimate from bottom up at the task level

• Ensure tasks will be assigned to individual resources (may specify “employee type” only at this stage)


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Step 2: Budget our project• Negotiate fee and scope of work based on the tasks that

made up the estimate

• After final negotiations immediately adjust estimate to become the budget reflecting the actual fee and actual scope of work (remember 1:1 relationship of tasks to contract scope)

• Add additional phase(s) that anticipate Additional Services (scope creep) to capture potential hours

• Adjust task resource assignments and specify to individual employee


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Step 3: Manage our project• Communicate roles, responsibilities and task assignments to team

Clearly establish that tasks are the limit of the scope

Encourage a watchdog environment for out of scope work

• Daily time entry – phase level

• Daily update % complete and overall status – task level

• Weekly review

• Weekly client communication

• Monthly PM review


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Step 4: Manage the scope creep• Clearly set expectations and procedures up front with client

• Communicate regularly – even when there is no scope creep

• Instill vigilance in all team members

• Search and find an instance as early as possible

• Invoice it!

• Don’t let your guard down


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Step 5: Close and post mortem our project• Analysis – what went right, what went wrong

• Adjust templates accordingly

Close the loop on better estimating (step 1)

• Communicate throughout firm

Success – higher margin!

Lessons learned – good and bad

Template changes and why


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Step 6: There's a step 6??• CRM (client relationship management)

Candid review– Project– Firm performance – PM performance

Ask for more work

Ask for referrals

Ask for reference


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Step 7: There's a step 7 too???• Estimate the new work you just landed based on the new template

• Enjoy the higher margins your firm is producing


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Traditional Mindset

Noble service

“Above” business

Obligation to provide design excellence and service

Please client for future work

Unaware when out of scope

Loose contract

Poor project plan

Willing to Buy Software, But Not Support It


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Instituting Change

Major shift in culture

Change old notions

Increase urgency

Communicate

Create short term wins

Don’t let up

Make change stick


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Change – Tips to Increase Urgency

Increase visibility

Demand accountability

Buy in at Human Resource level

Incorporate in performance review• Measure / benchmark

Don’t wait for reviews!• Institute monthly check–in’s

Affect the bottom line


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Communicate the Change

Share, inform and energize• Current status

• Direction heading

• The why, the how, the when

• What does that mean for the firm?

• What does it mean for each individual?

Overall picture from the top

Buy in to processes that will manage scope creep


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Why Do Clients Ask Questions?

Unfamiliar with process

Lack of understanding contractual scope of work

Changing expectations as project progresses

Belief that they deserve what is being asked for

Occasionally – desire to get more than they are paying for


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Client Expectations

Invoice

Set in beginning (contract language / kick off meeting)

Keep in forefront – even when there isn’t anything out of scope

Address immediately

Find additional services early – and invoice it


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Client Communications

Progress Reporting

Format for keeping scope awareness

Proactive communication and relationship maintenance


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Client Relations

You can get repeat work while being a stickler on scope creep!

Communication maintains respectful relationships• Regular, honest, timely, accurate

Provide the backup – don’t wait for them to ask• Area of contract that applies

• Description of additional services

• Hours / costs etc.

Understand your clients business – explain challenges in their terms

Focus on new business from beginning to end


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Implement and Monitor

Communicate the change

Implement monthly reviews

Conduct post mortems – update templates

Monitor changes in add services invoiced

Monitor changes in overall profitability

Celebrate successes!


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If We’ve Done It Right?

Staff are personally committed and held accountable

PM’s become profit center managers

Profit margins increase

Client relations improve


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Keeping the Momentum of Change

Build one step at a time

Won’t happen overnight

Create short term wins

Celebrate successes• Even small ones!

Expand your influence

Don’t let up


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Review – Keeping It Simple

Understand your enemy and attack the mindset

Support the change with proper systems and tools

Structure and manage your projects so it is easy to proactively plan for, monitor and capture additional service opportunities

Continually support the culture

Proactively manage client expectations and awareness


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Today – Got Scope Creep?

Understanding- Scope creep defined

Systems and tools

Management and structure

Culture change

Client expectations


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Additional Resources?

Available resources:

• PSMJ – www.psmj.com

• AEC Management Solutions (Herb Cannon) - www.aecmanagementsolutions.com

• Zweig White – www.zweigwhite.com


25 YEARS A/E EXPERIENCE

REAL-TIME

EASE OF USE

Growing SuccessAxium Encourages and Empowers Your Growth

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Thank You!

We at Axium wish you the best for 2009!

For more information:

Visit www.axiumae.com

Call 1.800.872.1540

Email Daniel LaunSales Manager [email protected]


http://www.axiumae.com/

Date post:	04-Jul-2015
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