got scope creep presentation by axium
DESCRIPTION
Got Scope Creep Understanding your enemy Systems and tools Project structure and management Changing your culture Managing client expectationsTRANSCRIPT
Axium © 2007
Got Scope Creep?Got Scope Creep?
Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 7
What Are We Trying To Achieve?
New internal culture
Comfort in addressing
Visibility to scope creep occurrences
Heightened client awareness
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Page 8
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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Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
CAUTION
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Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 13
Structuring Projects
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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Page 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.
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Page 15
Structuring Projects - Phases
Minimum Work Breakdown Structure: Project / Phase / Task
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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Page 16
Structuring Projects - Phases
Plan ahead
Incorporate out of scope phases from the beginning, even when nothing is identified
Example:
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Structuring Projects - Phases
Allow access to manage phase status
Inactivate closed and upcoming phases to eliminate incorrectly charging time
Example:
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Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 19
Structuring Projects - Tasks
Minimum Work Breakdown Structure: Project / Phase / Task
Example
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Page 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
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Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
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Page 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
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Page 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
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Page 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
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Page 27
Weekly Review
PM and team
Status of tasks
Snapshot review• Labor
• Expense
• Consultant
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Page 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
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Page 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
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Page 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?
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Page 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)
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Page 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
Understanding • Tools • Structure • Culture • Expectations • Wrap Up
Page 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
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Page 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
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Page 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
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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
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Page 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
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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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Page 39
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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Page 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
Affect the bottom line
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Page 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
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Page 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
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Page 43
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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Page 44
Client Communications
Progress Reporting
Format for keeping scope awareness
Proactive communication and relationship maintenance
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Page 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
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Page 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!
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Page 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
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Page 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
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Page 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
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Page 50
Today – Got Scope Creep?
Understanding- Scope creep defined
Systems and tools
Management and structure
Culture change
Client expectations
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Page 51
Additional Resources?
Available resources:
• PSMJ – www.psmj.com
• AEC Management Solutions (Herb Cannon) - www.aecmanagementsolutions.com
• Zweig White – www.zweigwhite.com
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Page 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 LaunSales Manager [email protected]
Understanding • Tools • Structure • Culture • Expectations • Wrap Up