Let's Learn From Our Mistakes: Perfect Project Change Management

Posted by Ett DiGiovanni on Jul 15, 2014, 9:29:00 AM

We have all done it.  We know what it’s like to track changes on a project manually. It seems much easier than having to create change records and get everyone’s approval.  But there is a high risk involved in this manual approach. Not only can it affect the validity of our project data, but it obscures visibility into our projects true health.  Here’s my story about the importance of project change management. 

Awhile back I was asked to help out one of our clients.  They were using our PRISM software for project controls on a refinery project.  The project had already been running for a couple of years and they were about 50% complete. 

Master_Change_ManagementTheir lead cost engineer had to go on medical leave and they asked ARES if we could provide some staff augmentation work, which is something we typically do for clients who have a need.

I traveled to the site and introduced myself to the Manager of Project Controls, who introduced me to the project team.  He then showed me to my desk and requested an updated cost report showing the latest forecast costs for the meeting planned for that afternoon. 

“No problem” I said, and started up PRISM to get myself familiar with their project data.  I ran a series of standard tabular and graphical reports that were available “out-of-the-box” and everything looked fine.  I noticed that the total EAC (Forecast Final) and Approved Budget values differed from the original budget values, but that was expected.

To make sure I was seeing the latest figures, I decided I’d better run the PRISM “Calculate Account Totals” process to ensure the Approved Budget and EAC values included the latest approved changes.  I chose the option “Use Change Management Data” for calculating both the Approved Budgets and EAC’s for all the accounts.  I then ran the “Spread Time Phased Data” process to also make sure the latest changes were included in the cost spreads.  The whole thing took a couple of minutes and I re-ran the reports.

To my horror, the numbers had all changed.  In fact, both the Approved Budget and EAC values were now equal to the original budget.   I was wondering what happened and when I opened the “Budget/EAC Changes” form, where all the Change IDs are entered… it was empty!  There were no change records!

After doing some more research, I was able to determine that the Cost Engineer had been modifying the Approved Budget and EAC values manually for all the accounts. Just like you would in Excel.  So, instead of creating Change ID records, explaining what caused the changes and indicating the accounts being affected by the changes, the user just plugged in values.  They were left empty-handed without an audit trail of changes affecting budgets and forecasts, and they disregarded the valuable automated workflow approval process.  

I reluctantly approached to Manager of Project Controls to let him know what I found.  He was surprised.  He assumed all the changes were being recorded properly.  I asked him why they weren’t using the built-in workflow approval process, where “Reviewers” and “Approvers” are contacted via email and able to electronically approve the changes.  He said he unaware of the feature and was now in the precarious situation of not being able to explain to his client why the Approved Budgets and EAC values differed from the original budget values.  Anyway, the Cost Engineer had a lot of explaining to do when he got back.

Which brings up the importance of change management on projects.  Changes are a given on every project.  However, having and using a proper change management system is important to justify any changes to budget and forecast values.  Recording approved (and rejected) changes provides an audit trail and explanation of why the Approved Budget and EAC values differ from the original budgets. So, don’t risk being left empty-handed, track changes on your project with automated workflow!


How to Eliminate the Chaos of Processing Changes
Learn How Did you know that only 15% of projects are being completed on their original completion date? Change orders are the root cause of project delay and when unmanaged, the impact can be detrimental. Learn how to master the change management process. 

Topics: Change Management, Commercial Off The Shelf (COTS) Software