Scope Creep: The Unplanned Cost of Complex Projects

Reducing Scope Creep in your Canadian Small Business

Project Management Professionals (PMPs) were once commonly sought out for niche fields such as ICT and construction, but many businesses are beginning to utilize project management and product management standards to help run their business more efficiently. The benefits of utilizing standardized and centralized processes for managing projects goes beyond efficiency gains.

Some small businesses, however, may not have the internal resources to have a dedicated project management role. This can lead to inefficiencies, redundancies, and lost time. In these cases, many small businesses can apply project management principles to help improve project efficiency, planning, and outcomes. This article identifies the causes of scope creep and highlights how businesses can overcome its challenges.

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What is Scope Creep?

Scope creep refers to the increasing of project tasks, objectives, and costs over time. As a company executes projects, issues can emerge such as changing stakeholder requirements and increased external costs that are beyond the company’s control. Ultimately, spending more time on a project will increase the project’s cost. Scope creep is very common; many businesses consider it a ‘cost of doing business’ but don’t plan for it prior to starting a project. Planning for, and implementing measures to reduce scope creep will ensure a business can successfully complete their project on time and on budget.

Many people think that scope creep is almost always the result of clients changing their minds, being indecisive, or delaying the project with needless meetings. This is not necessarily the case, although it can be, as I will explain in more depth below. Many cases of scope creep are caused from issues surrounding how a business approaches a project – the methods, processes, and systems in place to efficiently complete a project.

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Tips for Avoiding Scope Creep

Now that you have built a good understanding of scope creep, let’s identify ways to avoid it. Ideally, your business would be able to hire several certified Project Management Professionals (PMPs) to help improve project management processes, but that might not be realistic with limited resources. Small and mid-sized business can, nonetheless, benefit from pre-planning to help identify potential areas of waste and creep.

1. Consider the Variables

Who are the stakeholders in the project? What are the desired outcomes and deliverables? What’s the timeline? What internal and external resources are needed to complete the project? What other projects are occurring at the same time? By reviewing a wide range of variables prior costing out the project, you can get a more accurate idea of the project timeline and associated costs.

2. Review Similar Projects

Most companies complete similar projects on a regular, recurring basis. By stepping back from the project at hand and reviewing similar projects, you can gain additional insight into what might lay ahead. By talking with others who have completed similar projects, they can help you better understand the types of issues that may arise. Use this knowledge to better plan and forecast the results of actions taken, as past projects will deliver quality insights to current plans.

3. Clearly Define the Statement of Work

When building out a project’s timelines, resources, objectives, milestones, and action items, especially when there are external stakeholders involved, I cannot stress this point enough: get it in writing.

If you are engaging a consultant to provide a service for a project, ensure that you have discussed the statement of work in detail prior to engagement. Clearly lay out your expectations, elements that your team will be responsible for, elements that their team will be responsible for, and contingency plans. Even when the project is being completed internally, it’s worthwhile to go through the exercise of creating a statement of work – this can help mitigate potential inter-departmental issues where resources can be claimed by different departments, it also helps each project team member fully understand their roles and responsibilities.

4. Include a Contingency

Even the best pre-planning will miss something. There are always unplanned things that can arise, but if your project costing and timeline estimates include a realistic contingency, then you can help mitigate the impact of the unplanned. Start by reviewing previous projects and see how close the final costs and schedules were to the original budget and forecast, then begin to incorporate a standard contingency into your project planning. A 10% contingency is often reasonable, but may be low or high depending on your business, industry, or type of project. The contingency should also be adjusted to account for project’s complexity. By factoring a contingency into your budget, you will have a much better idea of what to expect in total project costs.

Opportunities Resulting from Scope Creep Reduction

As you start to utilize some of these tips and techniques, the likelihood and severity of scope creep will reduce. You may be able to reduce your contingency percentage, or eliminate it completely. By effectively planning for the unknown, reviewing previous projects, and engaging all stakeholders in the project at the outset you can reduce the potential for scope creep. It’s very difficult to eliminate entirely, but if you plan for it you can react to it more quickly and mitigate potential delays or cost overruns.

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