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Audience
Project creators, project managers, project schedulers, executive sponsors
Description
Change is inevitable on projects. Your customer may decide they want additional work completed or they want changes to what was originally agreed upon, or the scope changes. There may be other events that are outside of your control which can also cause changes to your project. Whatever the situation, you need to track and capture those changes to the project scope so that you can manage them appropriately.
Benefits
- Learn how to track and capture all project changes with PI Change Orders
- Request, approve and add tasks on change orders
- Access change order reports
Key Points
Transcript
As a project manager, you know that change is inevitable on projects. Part of the way through the project, your customers may decide that they want additional work completed or they want changes to what was originally agreed upon, or scope changes. There may be other events that are outside of your control which cause changes to your project, such as a delay on another project, or legislated, legal or administrative changes.
Whatever the situation, you need to track and capture those changes to the project scope so that you can manage them appropriately.
Change orders are especially relevant on projects where you are charging or billing external clients for the work. You need to capture and track change requests, have those changes approved and ensure that you are billing the customer for the changes.
Setting Initial Project Schedule, Budget and Deliverables
What you’ are seeing here is a sample project management dashboard with a list of active projects that you are assigned to.
Click on the Software Development project.
Typically, when you start a project, you are going to perform detailed planning to create your list of tasks along with an estimate of how long each task will take. Then you set up dependencies among tasks and assign resources. Also, you record any other non-labor expenses that may occur.
This creates you r initial schedule, which you can see here on the task list and on your Gantt Chart view. Hover on Views and click Gantt Chart.
It will also give you the initial budget for the project.
Click on Views to return to the task list.
You can define the columns of data you want to show on your task list view. This is a default view, which is called a planning view, but you can change the view to include budget information.
Click on Display Options.
Click on the Column Selection Options section to expand it.
The Selected Columns section shows what columns are currently displayed.
Remove the columns that you do not need for your budget view, by double clicking on them.
Double click on Duration, Work Status, % Comp Checkbox, Start Date and End Date to remove those columns.
In the Selected Columns, click on the Resources field to insert the new fields before it.
In the Available Columns, scroll to the very bottom of the list.
Then double click on Work Rate, which is the cost of the labor per hour.
Double click on Work Time, which is the number of Work Hours multiplied by the Rate.
Double click on Work Expense, which represents the non-labor cost.
Finally, double click on Work Total, which is the Work Time or labor costs plus the Work Expense.
Those fields give you your planned or anticipated costs for the project.
To see what the billable costs are going to be for your customer, in the Available Columns, scroll up until you see Work Billable Rate.
That is the billable rate per hour. Double click on that.
Double click on Work Billable Time, which is the Work Billable Rate multiplied by the Work Hours.
Double click on the Work Billable Expense, which is the amount of the non-labor costs you plan to invoice your customer.
Finally, double click on Work Billable Total, which is the total amount of billable labor and expenses.
Now you want to save this view, click the Edit icon for Quick Selection.
Type in Budget View.
Click the Save icon.
Click Update Display.
Click and drag the column headers to see the full labels.
There are other training sessions that go into detail about where this data comes from and how these financial metrics are calculated, such as the Managing Project Budgets for Professional Services and Managing Fixed Price Projects , but basically there is a labor costing rate set up and an hourly billing rate set up and those values are used along with the expense amounts to arrive at these figures.
Once you have these figures, your schedule and the deliverables or the scope, you will agree to this with your client or your stakeholders. Then you are ready to start the project.
Create a Change Order
What happens now if something changes? You need to track those changes, review them, get them approved and incorporate them into the project schedule, budget and deliverables.
Enter Change Order Summary or Header Data
To create a change order for the project, hover on the Views menu option and click Change Orders.
Click on the Add Change Order icon.
Only project managers on the project are able to add or edit Change Orders.
The Change Order Add/Edit form is displayed.
This form is where you record the summary or header details about the change order. It does not represent the detailed changes. You will enter those next. This is just the top level, descriptive information about this change order.
When you create a change order, you are not affecting anything immediately about the project schedule, budget or deliverables. You are simply recording the information about what the change is. Then after that change is approved, the information from this change order will be updated automatically in your schedule, budget and deliverables. You will see how that all works in a moment.
Enter the Name of your Change Order, such as Client wants new feature.
This name displays on reports and will help you identify the change order. The name is the only required field. However, you should fill in as many of the other details as possible.
Type in the Date of the Change Order or click the Calendar icon and select a date. It defaults to today’s date, but you can change that.
Change the Project Manager if required, by clicking in the drop down. This defaults to the project manager creating the change order but if there are additional project managers assigned to the project, you can change it.
Click anywhere on the white space to exit out of that drop down.
The project manager’s phone and email is filled in automatically. Again, if you need to change that information for some reason you can, but usually you just leave it with the defaults.
Enter your Customer Contact. In some cases, you may have your customer contacts set up as actual users in Project Insight. If that is the case, you can click on the drop down for the Customer Contact and select them.
Alternatively, if you do not have your customer contacts set up in Project Insight, click in the drop down and set it back to No Selection. Then just type the name in the text box below it.
You are also able to enter a discount amount that will be applied to this change order. This is a percentage only but enter it in as a whole number, for example for 20%. This discount amount will be applied automatically to the entire change order amount. If there is no discount, leave this blank.
Enter a Description to further describe what is included in this change order.
Type in, Display a map when location entered.
You can also enter Additional Notes such as additional instructions or the reasons for why the change order was initiated.
Type in, Need for mobile devices.
Schedule Impact is where you can enter high level details about the effect to the schedule. This is not the detailed schedule information, it is more of a summary and can be used to help make a decision on whether to approve the change order.
Type in 10 business days.
The Expense Description: is for elaboration on non-labor expenses and it will appear on the Other Costs section of the details of the Change Order.
There is only one Other Costs line so if there are multiple items list them here.
Type in XYZ third party tool and an ABC software purchase.
Hover on the Save icon and click Save & Display.
This saves the Change Order and takes you to the form where you can enter the individual change details for the schedule, budget and/or deliverables.
Enter Change Order Details
The top section shows the Customer Contact, Date, and project manager.
Change Order - State
This shows the state of the change order. This state is set automatically by Project Insight and you can see that this Change Order has a status of New.
Change Order – Additional Details
If you click on the Details text, you can expand that section and see the other change order header information that you entered.
Click on the Details text to collapse that section again.
Change Order Labor (Tasks and Work Estimates)
Next, you are going to enter the detailed tasks that need to be completed and that collectively will represent the labor portion of your change order.
In this section, you are going to add in the tasks that represent the work in the Change Order, just like you would on your normal project plan. However the column choices are fixed and limited for the change order to represent only that detail.
To add a new task, click in the gray blank line, where it says Name.
Type in Determine Requirements.
Type 10 in the duration for 10 days.
Leave the Work hours as the default of 80.
The Work Billable Time column is not editable.
It is calculated automatically once you save this task, by multiplying the billable rate as set by the billable rate flow by the number of Work Hours entered. The rate flow is covered in detail in the training session called Managing the Project Plan versus Actuals.
The Work Billable Expense is where you enter any non-labor amounts for the task if there are any. Type in $5,000.
The Work Billable Total column is not editable. It is calculated automatically by taking the Work Billable Time and adding the Work Billable Expenses after you save this task.
If you know who the resource that is going to be assigned to this task, click the Add Resource text.
On the Edit Resources layer, click in the drop down and select the Resource.
This could be a placeholder resource if you use those. The resources that are available to be selected here must already be assigned to your project. To see how to do that, you can view the Resource Management Basics training webinar.
You also want to ensure you set the resource type/role.
It will be populated with the default role for the resource, but you can change it as required for the task. This is important to set because the cost estimates will be summarized by the role specified.
Click the Save icon.
This saves the task and creates a new blank line where you can continue to enter the tasks that make up the work for this change order.
Click in the name and type Develop Feature.
Enter 20 for the Duration.
Leave the Work Hours set as 160.
Enter $10,000 for Expenses.
Click the Add Resource text.
On the Edit Resources layer, click in the drop down and select the Resource.
Click in the Resource Type/Role and set it to something different than the previous task.
Click the Save icon.
You are able to set up dependencies between tasks on the change order.
You will see that each task gets assigned a number.
To create a dependency between tasks on the Change order, double click in the Pred. By # for the Develop Feature Task, this puts you into edit mode for that task or alternatively you could have clicked the Edit icon.
Type in the number of the predecessor task, which, in this case, is the number for Determine Requirements task or #2.
Click the Save icon.
The relationship has now been created. This is a finish to start relationship with no lead or lag.
You can enter different relationship types, or lead and lag as well.
You can continue to add as many tasks as necessary. You can set up summary and child tasks the same as you would on a regular project.
If you right click on a task, you have all the same task functions that you have on your standard task list, such as inserting tasks and suggesting resources.
All of that is covered in the Leveraging Task Dependencies and Intelligent Scheduling training session but basically, you can do anything in here as you would do on the standard project task list.
Click anywhere on the white space to close that menu options window.
Change Order Cost Estimates
All the billable cost information that you enter in this detailed Work Estimate section will be summarized in the Cost Estimate section.
Click on the Cost Estimate text to expand that section out.
The Work Hours will be summarized by Resource Type/Role.
So you can see the total for the different resource type/roles that were identified.
These Work Billable Expense entries that you enter will all be summed up for one total Expense amount and the description of that will be the description you entered for Other Expenses on the Add/Edit form.
Change Order Cost Discount
If you had entered a discount amount for the Change Order, that discounted amount will be calculated from the total of the labor and non-labor costs and then subtracted from the total to get you the net change order amount.
If you did not enter a discount amount then that section would not show.
The cost estimate details shown here are intended for your customer. So again it is showing the billable amounts for labor and non-labor, not the internal cost amounts. However, in the backend of Project Insight, the cost for labor is still being calculated, it is just not displaying here.
Click on the Cost Estimate text to collapse that section.
Change Order Additional Notes
If you want to see the Additional Notes you entered about the Change Order, click the Additional Notes text.
To hide them, click it again.
Click the Related Items text to expand out that section.
Hover on the Add icon. You can see the items you can add. The most common ones would be files or shortcuts. You can attend the Document Sharing & Management and Accessing Data Using Shortcuts and URLs training sessions for more details on those.
To hide that section, click on the Related Items text again.
Approving a Change Order
Creating an Approval
Once you have entered and set up tasks and expenses for the Change Order and you have your cost estimates, you will want the change order approved.
Click the Start Approval icon.
The approvals form appears with the Change Order set automatically as the item to be approved.
There is a training session specifically for Routing Items for Approvals and Electronic Signature and the process for approving Change Orders is the same here, so you will just see it at a high level in this session.
Enter any additional descriptions or notes for the approval or the other details as you require.
Then click the Approvers tab to designate who the approvers will be.
Click in the drop down and select the Approver.
Enter multiple ones if required.
Click in the drop down and select yourself as the Approver.
Normally, you would not set yourself up as an approver for an approval you created. However for the purposes of training today, you are going to do that so you can easily approve the change.
If you enter multiple approvers, you can click the All Approvers Must Approve to have everyone in the list approve the change.
Leave it unchecked for now, because you just require one of these approvers to approve not both.
Click on Approval Routed Sequentially, if you want all the approvers to approve it and you wanted that approval routed in a sequential order.
Click the Notifications tab.
You can also enter in Notifications. For example, you can set who gets notified once it has final approval.
Or you can also set who gets approval notifications as each step is approved.
Ensure the Activate and Send Approval Request is checked.
Click Save.
You will see up in the header section of the Change order that the State is now set to Pending approval.
Click the Status tab.
You can see the approval request and the status of it, here as well.
Approving a Change Order
Your approvers will then see that approval on their worklist and approvals list.
Because I set myself as an approver on this Change Order and either one of us can approve it, I can click approve it from here by clicking on the Name of the Approval request.
Click on Approvals text to expand it out, if it isn’t already.
Click on the Approve/Deny text.
Enter a comment if I need to.
Click Approved.
Click the back icon to return to the Change Order.
You will see up in the header section of the Change order that the State is now set to Approved.
Adding Tasks on an Approved Change Order to the Project
Once a Change order is approved, you have the option to Add Tasks to the Project.
Click on that.
When you do that, you have the option of selecting a summary task that you want to add this change order.
Each Change Order will get its own summary task created in the project plan automatically, in addition to what you entered here.
It will be named with the change order name and number.
So even though you may have entered summary tasks on the Change Order Work Estimates, they will still get created under another summary task specifically created to represent the change order details.
In addition, if you enter a target task here, that Change Order Summary task will be created as child of the one selected.
If you leave this blank, or No selection then the new Change Order summary task gets at the top level of the project.
Leaving this blank is the most common option to use as then Change Orders will be clearly visible on your project plan.
To see how it all works, leave it blank and click Add Tasks to Project.
The Change Order Summary task gets created at the top level at the end of the task list.
Click on the arrow next to it to expand it out.
You will see any summary tasks you created.
Click on the arrow next to it to expand it out.
You will see the detailed tasks you entered along with the labor costs and the work billable labor amounts and work billable expense amounts.
If you wanted to enter the cost of non-labor expenses, double click on the Work Expense column to go into edit mode for the task and enter the amount.
Create Dependencies to Tasks on the Project
You also may want to set up dependencies for these tasks from the Change Order to other existing tasks. Attend the Leveraging Task Dependencies and Intelligent Scheduling training session for more information on doing that.
Setting Baselines
At this point, you may also want to re-baseline your project with these approved change order updates. You can attend the Baseline, Auto-Reschedule and Advanced Scheduling training session for instructions on how to do that.
Cancelling a Change Order
Once this has been done, the Change Order is locked from further task editing and can only be cancelled at this point.
You can cancel a Change Order at any point in the process, however, the effects of cancelling a change order depends on the State of the Change Order and also some administrative settings.
Change Order System Administration Settings
To see how to manage cancelling a Change Order when tasks have already been created on the project, such as is the case with this Change Order, expand the left navigation.
Click on Projects to expand it out.
Click on Change Orders.
Only an administrator can change these settings.
There is an option to Mark active Mark active change order Tasks complete when the change order associated with it is CANCELLED.
If you check this on, then if you cancel the change order after the tasks have been added to the project, then those tasks for that change order will be automatically set as complete.
They will not be removed from the project, they will just be set as complete so none of the resources assigned to the tasks see them on their work list or task lists.
This is recommended however, you should make sure all time has been entered against the change order tasks before cancelling the change order.
If you leave this unchecked, it will just leave the tasks as is in the project.
Check it for now.
Change Order Fine Print
You can enter fine print to enter a message that will be on EVERY change order. This is not editable by the project manager when creating the change order.
Enter in Ensure Bill on approval list.
Click Save.
Click the Back icon to return to the Change Order.
Click Cancel Change Order.
On the list of Change Orders for this project, the state is now Cancelled.
Click on Views.
Click the Display Options icon.
Click on the drop down for Quick Selection and choose Default.
This view has the % Complete Checkbox showing.
Click Update Display.
You will see the tasks for that Change Order have been marked complete automatically.
Putting a Change Order on Hold
Another option you can do with Change Orders is to put a them on hold.
The On Hold State is only available for Change Orders that have not yet been approved.
Hover on Views and click Change Order.
Click the Add Change Order Icon.
Enter the name, such as Upload photo feature.
In the Additional Notes, type New feature
Hover on Save and click Save & Display.
First, click on the Additional Notes to expand that section out.
You will see not only the Additional Notes you entered specifically for the Change Order, but you will also see the fine print notes that the administrator entered.
Click on that section to collapse it.
Click in the Name for the Work Estimate and type Design.
Enter in 5 days of duration.
Leave 40 hours of work.
Click on Edit Resources.
Click in the drop down and select a Resource.
Leave the Resource Type/Role assignment.
Click Save.
Now click on Put on Hold.
You can report on Change Orders that are on hold.
You can also start the Approval process for Change Orders that are on hold.
The state will just be set to On Hold, Pending Approval.
Removing a Hold
To remove the hold, just click on Take Off Hold.
Click the History tab.
Each time a Change Order is put on hold or taken of hold, an activity is logged for that action
Project Settings Required for Change Orders
There are some other settings that effect Change Orders.
Click on the Cost Estimate section to expand that out.
If you want the Cost Estimate for a Change Order to be summarized by Resource Type/Role, then you must have that option turned on for the project.
Your system administrator can set this on by default, but project managers can also set it on each individual project.
Hover on Views and select Options.
On the Default Options tab, ensure the Enable Resource Type/Role to be set by task assignment is checked.
If you do not have this on, then all the labor will just be displayed in an unassigned resource type/role bucket.
Change Order Numbering Settings
You can assign numbers to Change Orders automatically. This is a unique number that can be used to reference the change order.
Expand the Left Navigation.
Click on System Configuration.
There is a Project Change Order Numbering option.
You will most likely want to set it to Individual to have a its own numbering sequence assigned to it, or set it to global if you want it to pull from a pool of numbers.
Individual is the default and most commonly used.
You can attend the Determine Your Best Configuration Options training session for more information on how that works.
Click the Back icon to get back to your project.
Reporting on Change Orders
Now that you have Change Orders, you will want to report on them.
To report on them by an individual project basis, hover on Views and click Change Orders.
The active Change Orders for this project will show by default.
Those on hold won’t show.
To change what displays, click the Display Options icon.
Active Change Orders.
You can enter the date ranges for the Change Orders.
You can also click on Hold, to show those on Hold as well as Active.
You can also filter by Change Order State. Click on the drop down for that, and you can see the states available.
You may also create Charts and set Grouping by.
You can also set the columns which show.
Click on Column Selection Options to expand that out.
You can see the available columns that you can select to display.
Just double click on a column such as End Date to display it.
Click Update Display.
Reporting on all Change Orders
To report on all change orders, click on the Reports icon.
Click on Projects.
Scroll to the bottom and click on Create Project Change Order Report.
You have all the same options as you saw previously, except there are some additional filtering options sections.
Click on Change Order Filtering Options to expand that out.
You can report by project, project type, project status, project manager or sponsor.
Click on that section to collapse it again.
Click on Company & Contract Filtering Options to expand that section out.
You can also report by companies and contract.
Click on that section to collapse it again.
Click Run Report.