Change Management - Overview
A change order is created when there is a change in scope, an addition to a project that will affect the original contract amount, the timeline needs to be extended due to an unexpected delay, or other change to a project.
Change management is very flexible, allowing your company to choose a workflow that reflects your needs. Even within a company, different scenarios may require different functions in the software. For example a change may be billable to the customer or it may only affect the project budget.
There are two levels of change orders in the PM module:
- Pending Change Orders (PCO) - Pending change orders or "potential change orders"
refer to change orders that are in the process of being estimated or waiting for
pricing/approval. Think of a pending change order as a worksheet that stores all
of the items that are affected by a potential change in scope. If the pending
change order is approved, you can use these items to change the estimates and
contracts affected by the change in scope, as well as create PO change orders
(POCOs) and subcontract change orders (SubCOs) for the affected subcontracts and
Pending change orders, created in PM Pending Change Orders, define the scope, costs, and pricing of a potential change. The PCO breaks down into items, and each item can contain multiple phases and cost types. Items may also represent pricing options. If you need to create a new pending change order that is similar to an existing PCO, you can use PM Copy Pending Change Order to copy the existing PCO and then modify the copy as needed.
- Approved Change Orders (ACO) - These change orders are either pending change orders that you have approved or change orders that you have manually entered in PM Aproved Change Orders (for example, a change order that was approved outside of the application and must be entered into the system).
These are internal processes for managing change, rather than formal customer communications.
The follow illustrates the basic workflow for a change order:
Again, the PCO and ACO reflect the internal process of change management, and not the formal communications with a customer. PCO 1 and ACO 1 might be internal and non-billable, while PCO 2 and ACO 2 are billable.
Several basic scenarios are covered to give you a general overview of the change management process. Once you learn the process, you should be in a good position to determine which workflow should be used to process specific kinds of change orders. The scenarios progress from basic to more advanced.
- Non-billable change that only adjusts the project estimate/budget - Example Scenario: Basic Non-Billable
- Non-billable change with an impact on vendors - Example Scenario: Non-Billable Changes Impacting Vendors
- Project default markups and add-ons - Example Scenario: Project Defaults on Billable Changes
- Billable opportunity, using the full workflow of PCO, COR, ACO, and CCO - Example Scenario: Billable