Download - Project Scope Change Management

Project Scope Change Management

Basic approach to Manage Changes with Project Risk Management

Compiled by: Alex Iskandar,PMP

Why Changes ?

These days change is a constant, there is always something changing somewhere for some reason.

It is almost impossible to work anywhere without going through some type of change.

Change isn't a “bad” or a “god” thing

In today's business world change is necessary to survive.

However, if not executed properly change can be damaging, it can negatively impact to the project.


What is Change Management ?

Change management is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. Change management (or change control) is the process during which the changes of a system are implemented in a controlled manner by following a pre-defined framework/model with, to some extent, reasonable modifications [1].

In project management, change management refers to a project management process where changes to a project are formally introduced and approved.[2].

http://en.wikipedia.org/wiki/Change_management


Change is a constant feature of projects Knowing how to handle changes and requests for

changes is vital to delivering any project on time. Change control is the essence of good project

management Properly estimating the impact of a requested change

and communicating that impact in a clear way is vital to the success of any project.

Project Team must know: Why a change is needed (business case) What we are changing (scope) How long the change will take (schedule) How much the change will cost (cost estimate)


Changes Management as part of Project Control & Monitoring


Control and Monitor is:Control is: Noun

an act or instance of controlling; also : power or authority to guide or manage

Verb to check, test, or verify by evidence or experiments , to exercise

restraining or directing influence over

Monitor is: Noun

a person who has the job of watching or noticing particular things Verb

to watch, keep track of, or check usually for a special purpose


PMBOK® Project Management Process


Scope Management:

Scope PlanningScope DefinitionCreate WBSScope VerificationScope Change Control


Project Process “Max Wideman”


Project Life Cycle:Time Distribution of Project Effort

Conception Selection Planning, scheduling,

monitoring, control Evolution and

termination


Generic Phase Gates

Stage-Gate Project-Management Process in the Oil and Gas Industry – by G.W. Walkup Jr., SPE, SDG, and J.R. Ligon, SPE,

http://www.spe.org/spe-site/spe/spe/jpt/2006/12/Syn102926.pdf


AACE COST ESTIMATE CLASSIFICATION

http://www.aacei.org/technical/rps/17r-97.pdf


What is Contingency?http://www.maxwideman.com/pmglossary/PMG_C07.htm

As a result of risk analysis sums of money or amounts of time may be set aside as contingency which may be used in the event of risks occurring.

A Contingency is the planned allotment of time and cost for unforeseeable elements with a project. Including contingencies will increase the confidence of the overall project.

An amount of design margin, time, or money inserted into the corresponding plan as a safety factor to accommodate unexpected and presently unknown occurrences that judgment suggests will occur during the project.


What is Contingency Planhttp://en.wikipedia.org/wiki/Contingency_plan• A Contingency plan is a plan devised for a specific situation when things

could go wrong. Contingency plans are often devised by governments or businesses who want to be prepared for anything that could happen. They are sometimes known as "Back-up plans", "Worst-case scenario plans", "Scrap Situation" or "Plan B" .

Contingency plans include specific strategies and actions to deal with specific variances to assumptions resulting in a particular problem, emergency or state of affairs. They also include a monitoring process and “triggers” for initiating planned actions. They are required to help governments, businesses or individuals to recover from serious incidents in the minimum time with minimum cost and disruption.

http://www.maxwideman.com/pmglossary/PMG_C07.htm A Contingency Plan is fallback position, or workaround in the event of an

adverse occurrence, or risk event, on the project. A plan that identifies key assumptions beyond the project manager's

control, and their probability of occurrence. The plan identifies alternative strategies for achieving project success.


Where is the Contingency Plan allocated in the Risk Management Process ?

CONTINGENCY PLAN


How to Manage Changes

Manage with Changes & Risks

Possible outcomes for each risk Take action to avoid the risk, reduce its likelihood, or reduce its

impact, Make contingency plans and deal with the impact and mitigate

the risk should it occur, Agree that it is an acceptable business risk to take no action and

hope that the risk does not occur.

Do not wait for situations to come up before you address them


How to Planning ContingencyRisk Management and Contingency Planning http://ahds.ac.uk/creating/information-papers/risk-management/

Planning a Risk Response1. Types of Risk Response

• Avoidance • Adopting• Reduction• Transfer• Deferral• Retention

2. Choosing the right response 3. Contingency Plans

• How to Calculating Contingencyhttp://www.jiscinfonet.ac.uk/InfoKits/risk-management/calculating-contingency

Contingency should be shown in the plan as a separate item and not hidden in activities as "an extra 10%" on duration or cost.


Planning ProcessSample of Risk Assessment Result


Probabilistic Planning P10 Estimate – a 10% chance that the project

cost/schedule will be less than or equal to the estimate total and a 90% chance that the project cost/schedule will be greater than the cost estimate total.

P50 Estimate – a 50% chance that the project cost/schedule will be less than or equal to the estimate total and a 50% chance that the project cost/schedule will be greater than the cost estimate total.

P90 Estimate – a 90% chance that the project cost will be less than or equal to the estimate total and a 10% chance that the project cost/schedule will be greater than the cost/schedule estimate total.

http://bora.nhh.no/bitstream/2330/511/1/R30_01.pdfhttp://www.cooperenergy.com.au/cooper-pdf/Cumulative%20Probability%20P90%20P50%20P10.pdf


COST PROBABILITY CURVE (S-CURVE)

LEVEL PROBABILITY VS COST ESTIMATE

A D B CE

P90

P70

P50

P35

P10

A : Value P10B : Value P50C : Value P90D : Deterministic EstimateE : Deterministic By PM

DeterministicEstimate(IncludingAllowance)

ContingencyP50 – Determin. Estimate

COST

P

Sample


We have noted the following keys: Changes Changes Management Project Life Cycle Contingency Risk Management Scope Changes & Trends

Now going to enter on how to at the implementation (Execution / EPC Phase) :


Effective Planning Of EPC Contracts

Compiled by: Alex Iskandar,PMP http://i.treehugger.com/images/2007/10/24/change_order-1.jpg


Change Management /Risk Management Flow Diagrams

IdentifyRisk / Changes

Analyse Probability and

Impact

ApplyAvoidance or

Reduction

DefineContingency

Plans

Monitor &Manage

http://www.epmbook.com/risk.htm


Step-by-Step Process to Manage Change(Identify)

1. Identify source and nature of the change:

Determine the type of change (work plan, schedule, technical, etc.)

Determine the potential impact and process (formal/informal)

Document origin of change (who initiated it, what precipitated it)

Identify potentially effected customers and suppliers Identify who should lead the analysis/rest of process Communicate potential to rest of team as needed


Step-by-Step Process to Manage Change(Analyze)

2. Analyze the effects of the change

How does it relate to purpose/mission? Compare change against the current process Quantify the change (how much, how long, how much risk) Cause-effect analysis Brainstorm, analyze, and prioritize strategies Identify impacts against agreed upon requirements Access profound knowledge


Step-by-Step Process to Manage Change(Apply & Define)

3. Develop a response/action plan strategy:

Document analysis into proposal form Identify customers/stakeholders/level of authority for

endorsement Plan steps for presentation by answering these questions:

What needs to be done, who will do it, and by when? What will be the effects on other project tasks? How will the team communicate with the other

stakeholders?


Step-by-Step Process to Manage Change(Monitor & Manage)

4. Communicate strategy & gain endorsement Schedule meeting (s) Send letter/documentation package Gain endorsement and/or feedback Adjust strategy as needed and update database

5. Implement change plan and monitor the effects Identify responsibilities and timelines for carrying out Revise the work plan Monitor and evaluate implementation


Project Change Management is just a process and Project Change Management is just a process and tools, tools, People involvementPeople involvement is the focus of project is the focus of project successsuccess

People contributionPeople contribution and proactively to inform any and proactively to inform any changes (Scope, Trends) definitely requires for changes (Scope, Trends) definitely requires for Project Changes Management system Project Changes Management system implementation successfully.implementation successfully.

Simplicity to see the process, allSimplicity to see the process, all tools can be tools can be utilized, the main key is utilized, the main key is GOOD DOCUMENTATIONGOOD DOCUMENTATION..

Challenge and Recommendation

Download - Project Scope Change Management

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