Project Scope Change Management

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<ul><li><p>Project Scope Change ManagementBasic approach to Manage Changes with Project Risk Management</p><p>Compiled by: Alex Iskandar,PMP</p><p>Why Changes ?These days change is a constant, there is always something changing somewhere for some reason. </p><p>It is almost impossible to work anywhere without going through some type of change. </p><p>Change isn't a bad or a god thing </p><p>In today's business world change is necessary to survive.</p><p>However, if not executed properly change can be damaging, it can negatively impact to the project.</p><p>Compiled by: Alex Iskandar,PMP</p><p>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].</p><p>http://en.wikipedia.org/wiki/Change_management</p><p>Compiled by: Alex Iskandar,PMP</p><p>Change is a constant feature of projectsKnowing how to handle changes and requests for changes is vital to delivering any project on time.Change control is the essence of good project managementProperly 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)</p><p>Compiled by: Alex Iskandar,PMP</p><p>Changes Management as part of Project Control &amp; Monitoring</p><p>Compiled by: Alex Iskandar,PMP</p><p>Control and Monitor is:Control is:Nounan act or instance of controlling; also : power or authority to guide or manageVerbto check, test, or verify by evidence or experiments , to exercise restraining or directing influence over </p><p>Monitor is:Nouna person who has the job of watching or noticing particular thingsVerbto watch, keep track of, or check usually for a special purpose </p><p>Compiled by: Alex Iskandar,PMP</p><p>PMBOK Project Management Process</p><p>Compiled by: Alex Iskandar,PMP</p><p>Scope Management:Scope PlanningScope DefinitionCreate WBSScope VerificationScope Change Control</p><p>Compiled by: Alex Iskandar,PMP</p><p>Project Process Max Wideman</p><p>Compiled by: Alex Iskandar,PMP</p><p>Project Life Cycle:Time Distribution of Project EffortConceptionSelectionPlanning, scheduling, monitoring, controlEvolution and termination</p><p>*</p><p>Compiled by: Alex Iskandar,PMP</p><p>Generic Phase GatesStage-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</p><p>Compiled by: Alex Iskandar,PMP</p><p>AACE COST ESTIMATE CLASSIFICATIONhttp://www.aacei.org/technical/rps/17r-97.pdf</p><p>Compiled by: Alex Iskandar,PMP</p><p>What is Contingency?http://www.maxwideman.com/pmglossary/PMG_C07.htm</p><p>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. </p><p>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. </p><p>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.</p><p>Compiled by: Alex Iskandar,PMP</p><p>What is Contingency Planhttp://en.wikipedia.org/wiki/Contingency_planA 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.</p><p>http://www.maxwideman.com/pmglossary/PMG_C07.htmA 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.</p><p>Compiled by: Alex Iskandar,PMP</p><p>Where is the Contingency Plan allocated in the Risk Management Process ?CONTINGENCY PLAN</p><p>Compiled by: Alex Iskandar,PMP</p><p>How to Manage ChangesManage with Changes &amp; Risks </p><p>Possible outcomes for each riskTake 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. </p><p>Do not wait for situations to come up before you address them </p><p>Compiled by: Alex Iskandar,PMP</p><p>How to Planning ContingencyRisk Management and Contingency Planning http://ahds.ac.uk/creating/information-papers/risk-management/</p><p>Planning a Risk ResponseTypes of Risk Response Avoidance AdoptingReductionTransferDeferralRetentionChoosing the right response Contingency PlansHow 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.</p><p>Compiled by: Alex Iskandar,PMP</p><p>Planning ProcessSample of Risk Assessment Result</p><p>Compiled by: Alex Iskandar,PMP</p><p>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.</p><p>http://bora.nhh.no/bitstream/2330/511/1/R30_01.pdfhttp://www.cooperenergy.com.au/cooper-pdf/Cumulative%20Probability%20P90%20P50%20P10.pdf</p><p>*Hint: Possible exam answers on this slideCan use analogy of over/under in sports bettingCompare and contrast the threeP10 we have little chance of meetingP90 leaves money on the table, ties money up, doesnt allow us to pursue as many other opportunitiesP50 our magic number, what the board wants to see, half of our projects come in under and half are over</p><p>Compiled by: Alex Iskandar,PMP</p><p>COST PROBABILITY CURVE (S-CURVE)LEVEL PROBABILITY VS COST ESTIMATE</p><p>ADBCEP90P70P50P35P10A : Value P10B : Value P50C : Value P90D : Deterministic EstimateE : Deterministic By PMDeterministicEstimate(IncludingAllowance)ContingencyP50 Determin. EstimateCOSTPSample</p><p>Compiled by: Alex Iskandar,PMP</p><p>We have noted the following keys:ChangesChanges ManagementProject Life CycleContingencyRisk ManagementScope Changes &amp; Trends </p><p>Now going to enter on how to at the implementation (Execution / EPC Phase) :</p><p>Compiled by: Alex Iskandar,PMP</p><p>Effective Planning Of EPC Contracts</p><p>*Clearly identifying the original scope and describing it clearly to the WDS Dictionary and the Control Account Plans will help to minimize changes. Particularly Informal changes.</p><p>Compiled by: Alex Iskandar,PMP</p><p>http://i.treehugger.com/images/2007/10/24/change_order-1.jpg</p><p>*</p><p>Compiled by: Alex Iskandar,PMP</p><p>Compiled by: Alex Iskandar,PMP</p><p>Change Management /Risk Management Flow DiagramsIdentifyRisk / ChangesAnalyse Probability andImpactApplyAvoidance or Reduction DefineContingencyPlansMonitor &amp;Managehttp://www.epmbook.com/risk.htm</p><p>*</p><p>Compiled by: Alex Iskandar,PMP</p><p>Step-by-Step Process to Manage Change(Identify)Identify source and nature of the change:</p><p>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 suppliersIdentify who should lead the analysis/rest of processCommunicate potential to rest of team as needed</p><p>Compiled by: Alex Iskandar,PMP</p><p>Step-by-Step Process to Manage Change(Analyze)Analyze the effects of the change</p><p>How does it relate to purpose/mission?Compare change against the current processQuantify the change (how much, how long, how much risk)Cause-effect analysisBrainstorm, analyze, and prioritize strategiesIdentify impacts against agreed upon requirementsAccess profound knowledge</p><p>Compiled by: Alex Iskandar,PMP</p><p>Step-by-Step Process to Manage Change(Apply &amp; Define)Develop a response/action plan strategy:</p><p>Document analysis into proposal formIdentify customers/stakeholders/level of authority for endorsementPlan 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?</p><p>Compiled by: Alex Iskandar,PMP</p><p>Step-by-Step Process to Manage Change(Monitor &amp; Manage)Communicate strategy &amp; gain endorsementSchedule meeting (s)Send letter/documentation packageGain endorsement and/or feedbackAdjust strategy as needed and update database</p><p>Implement change plan and monitor the effectsIdentify responsibilities and timelines for carrying outRevise the work planMonitor and evaluate implementation</p><p>Compiled by: Alex Iskandar,PMP</p><p> Project Change Management is just a process and tools, People involvement is the focus of project successPeople contribution and proactively to inform any changes (Scope, Trends) definitely requires for Project Changes Management system implementation successfully.Simplicity to see the process, all tools can be utilized, the main key is GOOD DOCUMENTATION.</p><p>Challenge and Recommendation</p><p>**</p><p>*</p><p>*Hint: Possible exam answers on this slideCan use analogy of over/under in sports bettingCompare and contrast the threeP10 we have little chance of meetingP90 leaves money on the table, ties money up, doesnt allow us to pursue as many other opportunitiesP50 our magic number, what the board wants to see, half of our projects come in under and half are over</p><p>*Clearly identifying the original scope and describing it clearly to the WDS Dictionary and the Control Account Plans will help to minimize changes. Particularly Informal changes.*</p><p>*</p><p>**</p></li></ul>

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