The scope of construction projects can change rapidly. Whether from an official change order or undocumented client request, change is constant and can have damaging consequences to a construction company’s profitability and reputation if not handled properly.
Below we will define scope creep and share 4 proven ways to minimize your risk of it during construction projects.
What Is Scope Creep?
Scope refers to the formal work plan, assets, and deliverables of a project. It usually includes project specifications, key deliverables, estimated hours, boundaries, and more. Scope creep refers to any time the project’s scope of work changes or “creeps” beyond what was initially agreed upon.
A study by the Independent Project Analysis Group found that one in four construction projects go over their intended project scope by over 30%. As construction tools and technology advance, construction projects become more complex. We’ve seen this with the introduction of robotics and drones, as well as building information modeling (BIM). With the added complexity of construction projects comes added risk for scope creep.
As many as 67% of construction leaders believe that project risks are increasing along with project complexity. To counter this added complexity and navigate change, construction firms must work to anticipate and effectively manage it.
With any project, change is unavoidable. Your project will be met with a mixture of predictable and unforeseen challenges. Predictable impacts to your scope of work might include weather conditions, regional labor laws, regulatory requirements, material sources, and access to utilities. Unforeseen impacts to your scope of work could span from client’s changing their expectations to unplanned work stoppages. The uncontrolled and unforeseen changes that delay projects are what is responsible for scope creep.
Leading Factors of Scope Creep
There are endless reasons why scope creep can happen, from a lack of change control processes to undocumented agreements. Scope creep can pop up in all stages of a construction project life cycle.
Without procedures in places, scope creep often leads to increased costs and extended deadlines. Many businesses write off these costs to avoid unpleasantries with a client or payment disputes. Understanding the root causes of scope creep is the first step in minimizing its damaging effects.
Some of the most common factors of scope creep include:
- Poor communication between the construction company, client, and any contractors
- Improper contracting and change order procedures
- Poorly defined or vague scope of work
- Poor project organization systems
- Underestimating project complexity
4 Ways to Minimize Scope Creep
Change with construction projects is inevitable, but it can be controlled and managed effectively with the proper training and tools. Project managers should start by identifying when scope creep occurs during the project management lifecycle. Next, monitor to see why scope creep is occurring and find the source. Once found, manage the source to prevent scope creep from happening further.
By understanding the leading causes of scope creep and ways to prevent it, managers can improve their construction project management process and minimize the damaging effects on their business. Here are four effective ways to prevent scope creep during construction projects.
1. Set Clear Expectations
Preventative measures against scope creep start at project inception before a formal contract is in place. Construction firms and project managers need to set proper expectations with their clients from the first interaction. These expectations should be detailed in initial meetings and written down for reference.
Start by clearly defining your services and areas of expertise, as well as the types of work that will and won’t be included in the project scope. Any changes made to this initial agreement should be treated as a new agreement with the client and documented in writing. Without discussing and outlining the scope at the beginning of the project, you risk unforeseen disruptions and can misinterpret the client’s needs.
Treat this as a time to establish a solid relationship with your client as well. This added rapport can be especially helpful for managing stakeholder stress when unforeseen changes occur.
By having a thorough discussion with the client and setting expectations upfront, project managers give themselves the best defense against scope creep.
2. Proper Contracts and Documentation
Another key step to preventing scope creep is through proper documentation. It’s the project manager’s responsibility to ensure the scope of work is defined and documented through written estimates and a formal, signed contract. Without a written contract and scope of work, projects are subject to miscommunication and more likely to end in disputes.
In a study conducted by Arcadis on global construction disputes, they found that the global average value of construction disputes was $33 million in 2019. On top of that, the average dispute length took 17 months to resolve. The most common dispute causes were cited as omissions in the contract document, the construction firm failing to understand the project needs, and incomplete or poorly drafted claims. This further shows that through proper contracting and detailed documentation, construction firms can lower their risk for disputes and save a lot of time and money.
The information you choose to document in your scope of work will vary based on individual project needs. As you build out the written scope of work, try to include the following:
- List all known deliverables needed to complete the project.
- Detail the project goals and include any notable milestones.
- Create a detailed schedule and set reasonable timelines for all project tasks and subtasks.
- Include any administrative procedures involved in the project.
- Use clear wording and definitions, where necessary, to minimize confusion and risk for disputes.
- Ask your contractors and subcontractors to sign-off on the scope of work before sharing with the client.
Be as detailed as possible when building out your written scope of work. A vague scope can have damaging effects on the success of a project. To avoid this, include all necessary relevant information so that your contracts and subcontractors can understand and meet the project requirements effectively.
3. Require Addendums for Change Orders
Changes in scope can have big effects on the project and should therefore be treated as separate entities. When changes come up, as they inevitably will, track them all in writing and have a formal change order process. Although this may feel tedious, having written documentation sets proper expectations with the client and can be referenced if any disputes arise.
A good way to streamline your change order process is to create templates for clients and stakeholders to make requests. As requests are received, document them with a similar level of detail as your original contract. Don’t begin implementing any changes until the change order or addendum has been written and signed by the client.
Regardless of the amount or complexity of changes for a construction project, managers can minimize scope creep by consistently managing them.
4. Leverage Tools That Keep You Organized
To effectively manage the many potential risks for scope creep, construction firms should implement a combination of tools and best practices. Equipping yourself and your team with these tools can help you anticipate change and minimize its effects.
Here are some tools and best practices to help manage scope creep:
- Provide consistent updates on your construction project with the help of a project status report.
- Establish milestone markers throughout your process.
- Include costs with any change orders and manage all change orders with construction cash flow software.
- Implement project management software to streamline your tasks.
- Schedule regular meetings with the client, stakeholders, and contractors throughout the process to review progress and discuss any change order requests.
Like many common workplace issues, preventing scope creep requires frequent communication, proper expectations, and formalized and documented processes.
Change on construction projects can’t be entirely prevented, but project managers can work on anticipating and spotting the early signs of scope creep to minimize its effects. Construction firms and project managers that make these a priority will see exponential gains in saved timed, money, and energy.
This is a guest post from Dean Mathews. He is the founder and CEO of OnTheClock, an employee time tracking app that helps over 10,000 companies all around the world track time.
Dean has over 20 years of experience designing and developing business apps. He views software development as a form of art. If the artist creates a masterpiece, many people’s lives are touched and changed for the better.