Got Scope Creep Presentation by Axium

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Got Scope Creep …

Got Scope Creep
Understanding your enemy
Systems and tools
Project structure and management
Changing your culture
Managing client expectations

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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 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 When do you recognize scope creep? Was that short extra meeting part of the contracted scope of work? Did that extra submittal cost the project 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?
  • Mention that if their software does not support this, take this out to Excel to manage
  • Mention that if their software does not support this, take this out to Excel to manage
  • Why do clients ask for additional work which causes scope creep
  • Develop software specifically for the A/E industry for over 20 years Saw an opportunity a few years back with .Net to create something unique and special Fill void between generic but simple and complex ENR 500 type solution Out of that study was born our concept of ease of use and Ajera Last year we built upon Ajera to add even more functionality for growing firms with PORTFOLIO

Transcript

  • 1. Got Scope Creep? Got Scope Creep?
  • 2. Agenda
    • Understanding your enemy
    • Systems and tools
    • Project structure and management
    • Changing your culture
    • Managing client expectations
    Page
  • 3. Understanding The Enemy
    • Scope Creep defined:
    • Performing extra services on a project without compensation
    • Owner requested
    • Doing the “right thing”
    • Seemingly insignificant
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 4. Understanding The Enemy
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 5. Understanding The Enemy
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 6. Understanding The Enemy
    • When do you recognize scope creep?
    • Was that short extra meeting part of the contracted scope of work?
    • Did that extra submittal cost the project 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?
    Page Remember that scope creep can rear it’s ugly head in many different forms Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 7. What Are We Trying To Achieve?
    • New internal culture
    • Comfort in addressing
    • Visibility to scope creep occurrences
    • Heightened client awareness
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 8. How Do We Get There?
    • Proper systems
    • Proper project structure
    • Defined roles and responsibilities
    • Feedback mechanisms
    • Change internal culture
    • Prepare client expectations
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 9. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 10. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up CAUTION
  • 11. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 12. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 13. Structuring Projects
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • Some terminology definitions for today’s discussion:
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up Phase description Task description Activity description Phase Task Activity
  • 14. Structuring Projects - Phases
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • 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.
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 15. Structuring Projects - Phases
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • Example:
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up Description Oakland Heights Medical Clinic 04-107 Schematic Design Design Documents Construction Documents Bidding & Negotiation Construction Administration ID
  • 16. Structuring Projects - Phases
    • Plan ahead
    • Incorporate out of scope phases from the beginning, even when nothing is identified
    • Example:
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 17. Structuring Projects - Phases
    • Allow access to manage phase status
    • Inactivate closed and upcoming phases to eliminate incorrectly charging time
    • Example:
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 18. Structuring Projects - Tasks
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 19. Structuring Projects - Tasks
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • Example
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 20. Structuring Projects - Tasks
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 21. Structuring Projects - Tasks
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 22. Structuring Projects - Tasks
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 23. Structuring Projects
    • Minimum Work Breakdown Structure: Project / Phase / Task
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 24. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 25. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 26. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 27. Weekly Review
    • PM and team
    • Status of tasks
    • Snapshot review
      • Labor
      • Expense
      • Consultant
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 28. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 29. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 30. 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?
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 31. 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)
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 32. Review – Our Project Lifecycle
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 33. Review – Our Project Lifecycle
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 34. Review – Our Project Lifecycle
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 35. Review – Our Project Lifecycle
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 36. Review – Our Project Lifecycle
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 37. Review – Our Project Lifecycle
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 38. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 39. Instituting Change
    • Major shift in culture
    • Change old notions
    • Increase urgency
    • Communicate
    • Create short term wins
    • Don’t let up
    • Make change stick
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 40. 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
    Page Affect the bottom line Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 41. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 42. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 43. Client Expectations
    • 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up Invoice
  • 44. Client Communications
    • Progress Reporting
    • Format for keeping scope awareness
    • Proactive communication and relationship maintenance
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 45. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 46. 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!
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 47. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 48. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 49. 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
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 50. Today – Got Scope Creep?
    • Understanding- Scope creep defined
    • Systems and tools
    • Management and structure
    • Culture change
    • Client expectations
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 51. Additional Resources?
    • Available resources:
      • PSMJ – www.psmj.com
      • AEC Management Solutions (Herb Cannon) - www.aecmanagementsolutions.com
      • Zweig White – www.zweigwhite.com
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up
  • 52. Growing Success Axium Encourages and Empowers Your Growth 25 YEARS A/E EXPERIENCE REAL-TIME EASE OF USE
  • 53. 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 Laun Sales Manager [email_address]
    Page Understanding • Tools • Structure • Culture • Expectations • Wrap Up