A well managed change order process will have a hugely positive impact on customer satisfaction, profitability, and cash flow. A poorly managed process will negatively impact all three and will sometimes impact cash for years if it goes into a claim situation.
- Map out the change management process, including the specific people who are directly and indirectly involved on each project. The diagram shown is a simple one - expand it in more detail like you did for cash flow. These two processes are interrelated.
- Ensure that your contract supports a fair change management process and that everyone on your project team knows what the requirements are.
- Build relationships at all levels to support the change management process.
- Make sure your Schedule-of-Values (SOV) can easily integrate change orders from the time they are identified, just so everyone remains on the same page.
- Where possible, try to minimize T&M changes because you can’t get them approved and paid ahead of executing the work. Where they are necessary, focus on rapid pricing turnaround and getting them in billings ASAP.
- Remember that great negotiating skills will make a huge difference with change management.