Tracking Change Progress (The Funnel): Basic Status Categories

Managing changes effectively means that you need clear visibility across all projects.

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While the workflow will vary by project, the key milestones in your internal process will remain fixed. 

Change Management: Tracking Change Progress - "The Funnel": From Identified to Proposed to Approved to Executed and Paid. May also become a Budget Revision, Voided, Settled, or Disputed. Always track and manage your Work at Risk for job costs on changes that have not been executed. Identify Early - Move Quickly - Communicate Often - Manage Rigorously.

Determine names for each of these major milestones, including where the change may fall out of the workflow process and why. Examples include:

  • Identified: Initially identified as a potential change and set up in your tracking system
  • Proposed: Scoped, priced, and sent to the customer
  • Approved: In some form from the customer giving you the OK to proceed
  • Executed: Fully executed contract change order or fully billed and paid

You may choose other stages in between for more granularity, depending on your workflow and the dynamics of your projects. You may also want to include different types of changes such as T&M, Lump Sum, etc. At the end of the change funnel, you can track billed and payment dates.

A critical metric to track and manage is your Cost@Risk where you have incurred job costs on changes that are not Executed or allowed to be billed. You want to track the aging of each of these stages through the funnel but most importantly is tracking the aging of costs that can't be billed as they have a higher probability of becoming disputed and are impacting your cash flow. A proposed change for $1,000,000 dollars that you haven't started work on represents far less risk than a $10,000 change that you completed the work on 90 days ago but has not been approved by the customer. 

There are also other status codes where the change falls out of the customer change funnel:

  • Budget Revision: Internal - turned out to be a scope gap or value engineering not submitted.
  • Voided: They decided to not go forward with the change before any costs were spent.
  • Settled: Agreed on some sort of trade after you had spent some costs.
  • Dispute: Agree to disagree and work on settlement per the contract terms.

Setting up clear status codes and using them consistently allows more effective management of changes. 

Set standards within your company for:

  1. What constitutes a change that must be tracked.
  2. Timing from initial identification of a possible change based on contract drawings or field conditions until it is logged in your tracking system.
  3. Expected timing for moving changes through the tracking stages. This expected timing should be different depending on the amount of Cost@Risk for that particular change.
  4. Timing of communication and pricing for Time & Material type of changes.
  5. Escalations within your company based on conditions for changes including aging and dollar amounts to ensure that the right levels of management are informed and involved at the right times.
  6. Managerial processes for the role that manages the Project Managers to ensure that changes are being managed to the company standards. 


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