Change requests, sometimes also referred to as change orders, occur, as the name implies when modified to the original baselined project. So, if there is a change to the scope, such as project and/or product requirements, the budget, or the schedule, for example, a change will occur. If the process is executed correctly, the change will usually proceed as follows:
- Change is identified
- Change is documented in a change order/request.
- Change order is registered in a change order.
- Appropriate party/ies review change order.
- Change is accepted or rejected or sent back for clarification. If accepted, then one or more of the baselines, such as the scope, budget, or cost, are updated.
- Change is carried out if accepted and made part of the project and/or product.
All change requests must go through some pre-established processes, such as a review by the project manager and/or the sponsor and the client if it is an external project. In some cases, if the complexity of the project and/or products warrants it, a change control board (CCB) might be selected. The CCB would include reviewers representing the owner, client, users, vendors, etc. In any event, all change requests must be reviewed by an appropriate party who can decide whether to accept or reject the change order; and, in some cases, direct staff to further analyze the impacts versus benefits of the change order.
The reasons how and why changes are generated vary greatly from industry to industry, as well as from organization to organization and between individuals. In general, the most common reasons for issuing change orders are as follows:
- Client directed: if the client decides s/he needs to accelerate the schedule, for example, or cut costs, which typically translates to reducing the scope, or make changes to the product requirements, then they must issue a change order and ask the vendor to review it. Consequently, through the change order process, the vendor, in this case, will review the request and provide feedback, such as the impact associated with the change request. The said impact might affect the scope, schedule, quality, etc., and it will then be up to the client to decide whether the impact is acceptable.
- Vendor directed: for example, the seller or vendor may request a delay to the schedule work based on unforeseen circumstances or even due to human error on their part. Therefore, a formal request to revise and re-baseline the schedule would need to be submitted to the client for their approval. It should be noted that, even if the vendor has made an error in the project execution, product development, etc., they must issue a change order to make corrections and/or repairs before they proceed. In some cases, for example, if the project needs more funds to correct, the organization itself has to authorize an increase to the budget since it would not be fair or, in some cases, legal to request more funds to correct an internal error.
- Technology or Agency directed: in some cases, such as changes or upgrades to software, may require a modification to the project baselines in the form of added funds for the upgrade, additional work not included in the original scope, or a delay in the schedule. Similarly, updated requirements by a public agency certifying the project and/or product may also generate a change order for the same reasons: change in scope added budget required, or additional time needed to get the changes made.
There may be other reasons why change requests are generated, but the aforementioned ones are the typical ones. And although change orders are often viewed as a negative byproduct of project work, it does not always need to be so. For example:
- A change request may be issued due to a drop in the cost of materials, equipment, etc., translating to cost savings and, therefore, a decrease in the budget.
- New design and architecture ideas and/or technological advancements, in IT, for example, which occur mid-way through project development, will lead to a better product if applied. Therefore, the benefits may outweigh the cost and schedule impacts of the proposed change.
- If a part of project activity or product feature is deemed unnecessary during project execution, these items may be removed from the scope, budget, and schedule, which requires a change request with applicable cost and/or time savings.
And when are change requests not a good thing? In general, change requests are not good for the project and/or the buyer-seller relationship when there is an inordinate amount of change orders, which means that
- the client was not able to express their requirements and/or expectations clearly to the seller, or
- the seller did not understand said requirements or expectations, or
- the seller did not correctly estimate the amount of effort, time, and budget needed to execute the work properly
When the client and seller cannot agree that a “change” has occurred, then a claim might be filed. For example, let’s say that the client assumed that he/she would receive “all” product documentation at the end of the project since they paid for the work, even though such a request was not clearly included in the contract. In turn, the seller might argue that only certain documentation, per industry standards, was included. If additional documentation is requested, it is extra work, outside of the original scope, and, therefore, deserve additional funds. In this example, only the seller believes that a change has occurred. The client does not, and, therefore, they disagree. This would then lead to a claim’s issuance, a step or two before a lawsuit.
In general, it is recommended that both parties consider availing themselves of a mediator’s service to solve the discrepancy. Mediators are trained professionals, sometimes even paralegals or retired attorneys, who seek to resolve the issue as quickly and inexpensively as feasible. Using lawyers and paying court fees would be far costlier and more time-consuming.