IMAGE COURTESY OF CPB CONTRACTORS PTY
The AU$2.3 billion Royal Adelaide Hospital in Australia was AU$640 million over budget when the project closed last year.
In today's hyper-competitive business environment, it seems everything needs to be done yesterday. But heightened project expectations and a quickening delivery pace can drive up the risk of scope creep—a trend that's on the rise for organizations around the world. PMI's 2018 Pulse of the Profession® found that 52 percent of projects completed in the last 12 months experienced scope creep or uncontrolled changes to the project's scope—up from 43 percent five years ago.
Source: Pulse of the Profession®, PMI, 2018
For example, the AU$2.3 billion Royal Adelaide Hospital in Australia was AU$640 million over budget when the project closed last year. While unexpected construction costs contributed significantly to the overruns, the project team also grappled with requests to add the latest high-tech features, including service robots that deliver linens and digital tags that track medical equipment and patients.
With the business environment in such flux, project professionals must be on high alert to steer initiatives clear of potentially disastrous tack-on requests that have big budget or schedule impacts. Whether taking predictive (waterfall), agile or hybrid delivery approaches, project and program managers must establish clear boundaries from the start. This helps ensure that key stakeholders have a solid understanding of the project plan and path.
“Competition should not be used as an excuse for scope creep—it should be a means to improve processes,” says Harris Apostolopoulos, PhD, director of the transformation project management office (PMO), Saudia Cargo, Jiddah, Saudi Arabia.
—Harris Apostolopoulos, PhD, Saudia Cargo, Jiddah, Saudi Arabia
TALK IT THROUGH
Today's scope management requires more continuous and fluid engagement with key stakeholders, says Monica Sacco, PMP, worldwide project management profession leader, PMI Global Executive Council member IBM, Buenos Aires, Argentina. Frequent and effective communication helps prevent scope creep and creates greater awareness about the harm that out-of-control changes can cause on a project.
Athanasios Arkoudopoulos, PMP, learned that lesson the hard way. During a hardware deployment project completed last year, Mr. Arkoudopoulos—a cybersecurity portfolio and program manager at NXP Semiconductors in Eindhoven, the Netherlands—nearly doubled the scope. The big change followed his team's discovery that the original plan failed to take into account several company locations that also needed the equipment. An excellent relationship with the supplier and lightning-fast communications within NXP allowed the team to re-scope the project without significant impact to cost and time. But the experience brought about immediate project and stakeholder management changes that have helped ensure future NXP projects are properly scoped from the start.
Now Mr. Arkoudopoulos and company leaders meet regularly, both formally and informally, to share project roadmaps so they can clearly identify all stakeholders to whom the project team should be talking to define scope. “We didn't do a good enough job on the initial due diligence, and certain assumptions were proven wrong,” he says. “Now we have shorter and faster feedback cycles that allow us to validate our assumptions sooner with key stakeholders. That helps us ensure the scope doesn't expand. And if it does, we see the change coming much sooner and thus can anticipate any impact sooner.”
—Athanasios Arkoudopoulos, PMP, NXP Semiconductors, Eindhoven, the Netherlands
Having constant engagement with key stakeholders helps emphasize collaboration and validation on project decisions during each phase, says Claudia Farias, director of program management, Future Digital Bank, Citibanamex, Mexico City, Mexico. For instance, during the project definition phase, project managers should interview clients and then incorporate their feedback into the charter. This helps clearly define requirements and prevents sponsors from surprising teams with last-minute change requests that expand scope.
Teams using agile approaches should involve the product owner in the testing activities and then hold a sprint review to demonstrate progress of the shippable product increment for the end customer, she says. Some organizations that use agile have gone so far as to create dedicated rooms that can hold a crowd of stakeholders and have large video screens to display the demonstration, she says. These steps provide opportunities for product owners and the scrum team to reinforce scope limitations.
If scope creep nonetheless occurs, log lessons learned for future projects.
“Project managers who experience scope creep can look at it as a very good way to learn lessons, gain experience and improve the controls that he or she will implement in the next project,” Ms. Sacco says. “That's something I learned, too.”
Stopping scope creep doesn't necessarily have to be complicated. Here are some straightforward steps to manage that risk, according to Monica Sacco, PMP, worldwide project management profession leader, IBM, Buenos Aires, Argentina.
|1||Limit timelines. Whenever possible, rein in schedules from the start to ensure a smaller and more manageable scope. For instance, make sure IT projects run no more than six to eight months.|
|2||What's out of bounds? Don't just identify the scope during the planning phase—identify what's outside of it, too. Define both sides of the boundary with sponsors during planning to make it clear what's off-limits.|
|3||Build contingencies. Mitigating scope creep means planning for the possibility that it will happen anyway. Build a strong contingency budget to limit the negative impact of unexpected problems.|
Keeping a lid on scope creep isn't easy when organizations are chasing pacesetters and looking to grow profits. But the pursuit of efficiencies in the name of growth—or even survival—also can trigger problems.
For instance, organizations around Brazil have been forced to adapt as the country continues to recover from an economic recession that began in 2015. Funding around the country for projects became tight after prices dropped for raw materials, which are a key export and revenue source in Brazil. In their efforts to cut costs, organizations started squeezing project study phase budgets—resulting in poorly defined scopes, scope creep and, ultimately, bigger budgets, says Alejandro Millan, a project control specialist at wood pulp mill Celulose Riograndense in Porto Alegre, Brazil.
To stay ahead of the competition, Mr. Millan's organization did the opposite. Its teams were authorized to create a more rigorous and layered planning process for all mill upgrade projects. What was once a one-step process for requirements planning and approvals is now a three-step process that involves taking the project through a conceptual phase, a basic engineering phase and then a detailed engineering phase. Each phase has its own approval processes, which helps produce a more robust project design.
According to Mr. Millan, the new planning process helps prevent scope creep and reduces the risk of work stoppage due to change-request delays. That's critical for an organization that can execute upgrade projects only when the mill is shut down—typically just 10 to 15 days a year. Each additional day the mill would need to stay closed for project completion would cost the company approximately US$1 million.
The Upside of Scope Creep
Scope creep isn't always a bad thing. Project professionals are learning how and when having a project plan that considers the entire enterprise can reveal opportunities to expand scope—or help teams justify expansion in the name of long-term value.
Michael Janzen, PMP, governance and enterprise PMO director, MedStar Health, Columbia, Maryland, USA, leaned on this mindset when his organization launched a project at one of its 10 hospitals in June 2017 to deploy servers that store data from sleep studies. During the project, another hospital also asked to participate, but Mr. Janzen's team determined the server lacked enough storage capacity to handle a second hospital.
Launching a separate project with a separate server would have put both hospitals in their own silos. So Mr. Janzen got permission from executive sponsors to relaunch and re-scope. His team deployed larger servers that multiple hospitals can share. While the re-scope increased the project's IT-related expenses and added nearly 10 months to its schedule, the new system is scalable for more hospitals to come on board in the future.
“For all of our projects in the system, we've gotten better at saying ‘Let's not just do this at this one hospital, let's look across the board and take an enterprise-wide approach,’” he says.
More robust planning “means we have the budget, schedule and scope very well defined and approved before the project goes to the board committee,” Mr. Millan says. “We realized that changing the process improves scope and helps us achieve better goals in terms of both cost and time.”
—Alejandro Millan, Celulose Riograndense, Porto Alegre, Brazil
The accelerated pace of agile can't escape the growing threat of scope creep either, Ms. Farias says.
“Because there is flexibility to manage the backlog of the product, it's very common to get confused and think that in agile approaches and constantly changing markets, scope changes shouldn't be controlled,” Ms. Farias says. “However, the projects often have a limited budget, and a new requirement shouldn't be introduced into the backlog without verifying how it impacts the budget.”
—Claudia Farias, Citibanamex, Mexico City, Mexico
When done well, backlog grooming helps ensure that the constant change that comes with agile delivery approaches won't expand scope or budgets, Ms. Farias says. By reviewing the backlog at the start of each sprint, product owners and scrum teams can eliminate requirements that are no longer relevant and prioritize new changes requested by the client. By measuring these changes in terms of how much time they would require, owners and teams can artfully swap one requirement for another, without affecting the timeline or budget.
On agile projects, teams can reduce the risk of introducing changes and scope creep by having clients agree on the requirements that will be developed or deployed before initiating each cycle, Ms. Sacco says.
“A project manager must ensure that clients don't take agile approaches as an open invitation to regularly request major changes,” she says. “Project managers need to clearly communicate the project scope and the change management process used to all stakeholders. A contract should clearly state the client's responsibilities and must contain the change management procedure that will be used with the client, to minimize the risk of introducing major scope changes.”
In the end, that's true for all delivery methods in today's project environment.
“There is flexibility, but rules are rules and deadlines are deadlines,” Dr. Apostolopoulos says. “I try to avoid micromanaging, but before I'm assigned to a project, program or even a portfolio, I make 100 percent sure that I get buy-in from key stakeholders and clarify everything.” PM