Preventing and Managing Scope Creep in Contract Management
Suppose that you want to build a new home for your family. First, you get in contact with a construction company. You inform the workers there that you want a house with three bedrooms and two bathrooms, draw up some plans and tell them to get started right away. Six weeks into the project, however, you realize that you need space for a home office, you want to move the location of the kitchen and you'd also like to add a pool in the backyard.
Just like that, you've fallen victim to scope creep, which is an ever-present concern whenever you embark on a project of substantial length. Of course, it's good to be flexible and open to change, and a certain degree of scope creep is inevitable at some point for contract managers. However, you also need to know how and when to put your foot down to prevent a project from spiraling out of control. These three tips will help you limit the amount of scope creep in your contracts so that you can keep yourself and your vendors, suppliers and clients happier.
1. Be Clear
The first step in building a house, of course, is drafting blueprints for its layout. These blueprints help you understand the overall framework of the structure and how the different parts of the house relate to each other.
How potential changes to the project will be handled
This process may involve a series of sit-down interviews and meetings with key stakeholders to ensure that you capture all requirements and that everyone is on the same page. The time you spend here, however, will save you time later on by lowering your risk of scope creep.
2. Be Flexible
As mentioned above, some amount of scope creep is unavoidable in the long term. To ensure the success of the contract management process, you need to strike the right balance between being open to new ideas and allowing scope creep to drive the project off the rails.
In order to prepare for and manage scope creep, a small portion of your budget, perhaps 10 percent, should be allocated for any contingencies that crop up during work on the project. Of course, this budgetary safety net should be accompanied by a proportionate amount of extra time to allow you to develop these additional features.
3. Set Boundaries
If you give yourself this breathing room in terms of time and money, you also need a formal way to handle requests to use it. By having processes in place to manage changes, clients will be more understanding and more likely to come back for repeat business.
Within the contract, you should have explicit definitions of what constitutes a new change or a new project, which you can later point to when clients want to significantly expand the scope of the existing project. You may also choose to include a change fee in the contract, which should be high enough to discourage trivial requests but low enough not to scare clients away from requesting needed modifications.
The Buyer's Guide to Contract Management Software
Quickly identify solutions to your specific contract management challenges.