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Jul 21, 2011 by Brad Egeland in Project Management 101 & Tools

Increasing Project Profitability: Part 1 – Change Management

Brad Egeland Brad Egeland is an IT/Project Management consultant, business strategist, and author with over 25 years of software development, management, and project management experience leading initiatives in   Manufacturing, Government Contracting, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT.

 

Other chapters: Part 2 – Resource Management and Part 3 – Budget Management

Project success is usually judged on one or more of three key factors:  on time delivery, on budget delivery, and customer satisfaction.  In fact, success on the first two factors usually goes along way in experiencing success on the third factor.  For this three-part series, I’d like to focus on project profitability.  While that’s not specifically on budget delivery, ending with a profitable project when you deliver that final solution to your customer usually means you kept the budget in check and delivered a fairly issue-free solution.  Both usually translate into project success.  In Part 1 we’ll examine the role of change management in the concept of project profitability.

Managing project scope

One of the most difficult things to do as a project manager is perform scope control.  During the planning phases of the project requirements are discussed, revised, detailed, and documented.  And ultimately, they are formally agreed upon and signed off – thus becoming the benchmark that the system or solution will be created to meet.  They will serve as the basis for design, development, testing, user acceptance testing, and – finally – solution signoff and deployment.

Obviously then, managing the scope of work of the project – or the work that must be performed to meet those requirements – becomes a critical responsibility of the project team and the project manager.

In order to ensure thorough change management on any project, it is best to follow three general practices throughout the engagement.  Let’s look at these three in detail:

Create a requirements traceability matrix

The project manager can make this as detailed or as simple as they want.  The key concept here is to track requirements as those functions are built into the system that is being developed.  It is usually best to do this within the original requirements document – noting, as the system is developed, where key requirements are being met.  This will serve two main purposes.

  1. It will document that the requirements were included in the design of the system, and
  2. it will make it easier for the end users to test the system at user acceptance time as they’ll better understand how to verify the requirements and create test cases to fully test functionality.

Monitor developers tasks

By closely tracking project team members activities on assigned tasks the project manager can ensure that they are doing the assigned work and staying on track.  When project team members are working closely with the customer, it’s easy for ‘extra work’ that the customer requests to find it’s way into a project team member’s efforts – work that may not actually be part of the original agreed upon requirements of the project.  Unplanned extra work like this can lead to unplanned hours being spent on the project which ultimately hurt the profitability of the project.  Weekly internal project team meetings setup to discuss project task progress will keep the project manager in tune with what work the team members are performing and will allow the project manager to redirect their efforts if unplanned work is happening.

Create change orders for any questionable work

If the project manager finds that his project team members are performing unplanned work that is essentially ‘out of scope’, then the creation of change orders to document the work that is being performed or needs to be performed will allow the project manager to formally charge the customer for this work.  Most projects require change orders at some point during the project as new requirements come to light and additional functionality must be added.  Documenting this work, estimating the hours and price, and getting customer signoff to perform the work will help the project remain profitable and on budget for a successful deployment.

brad-egeland
Brad Egeland

Brad Egeland is an IT/Project Management consultant, business strategist, and author with over 25 years of software development, management, and project management experience leading initiatives in Manufacturing, Government Contracting, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT.

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