Claims and Change

Management
Overview of
Change
management
 Outcomes
Learn
• Project Design
• Changes during Project lifecycle
• Dynamics of Change management
• Principles of Effective Change management
• Change management plan
• Best practices to manage project changes
• Change management system
• Documentation and tracking
• Forms and templates
Part 1 : Project
Design
 What is Project Design
• Early phase of the project- before planning.
• Strategic organization of idea , material and processes for achieving project
goals
• Lays out project’s key features, structures, criteria for success, major
deliverables.
• Decision on how to manage and govern the project – at higher level
• Aim- Develop more than one designs to enable stakeholders to select the
best design
 Inclusions in Project Design
• Description of company / business which is going to execute the
project.
• Description of project- background, need, goals , objectives,
outcomes , major deliverables and timelines
• Responsibilities
• Budget
• How to monitor and evaluate progress
 9 Steps of Project Design
• Vision
• Problem
• Resources
• Goals
• Strategy
• Contingency plan
• Evaluation
• Budget
• Project proposal
 Step 1- Define the Vision
• Create a vision statement.
What is a vision statement?
Formal document that states the project’s potential. Gen used for
presentation to stakeholders
Examples of Vision statements
McDonald’s- To be the best quick service restaurant experience.
Amazon- To offer our customers lowest possible prices, best
available selection and utmost convenience.
Walmart- To be the destination to save money, no matter how you
want to shop
 Step 1- Define the Vision
Example of Vision statement of an affordable housing project

“To build good quality affordable homes and good

neighborhood where people can live, work and play safely”
 Step 2- Identify the Problem
Carry out a needs assessment.
How?
• Identify what information is required
• Find sources of the information
• Select measures for gathering information
Example:
Problem – building good affordable homes with safe neighbourhood,
connectivity and associated infrastructure in a metro city,
Identify – Customer segment, Demand, paying capacity, loan issues,
infrastructure issues, land acquisition issues etc
 Step 3-Assess the Resources
• Resources required to reach the vision- labour, equipment,
material, funds, supplies , facilities.
• Ask 5 W questions
• Q1- Who will perform the project? HR , organization
• Q2- What tools will be used? Supply, material , equipment
• Q3- Where will the project be performed? Location and facilities
• Q4- When is the project going to start and finish?
• Q5- Why is the project being launched?
 Step 3-Assess the Resources
Example of affordable housing project being launched my municipal
corporation.
• Who- qualified experienced contractor with assistance of NGO.
• What – modular prefab construction
• Location- Ahmedabad
• Dates- 01 Jan 2022- 31 Dec 2022
• Why- To meet the shortfall of affordable housing in Ahmedabad.
 Step 4- Establish Project Goals
S- Specific
M- Measurable
A – Achievable
R – Realistic
T- Time bound
Example – “to build 1000 affordable homes in - area of Ahmedabad
district by 31 Dec 2022, using modular prefab technology”.
 Step 5-Select Project Strategy
How to achieve the goal with available resources.
Aids
• Consider past experience with similar projects.
• Consider successful projects even if they are not similar.
• Review lessons learnt from past projects.
• Use best project management practices that can be applied to the
project.
• Consider resolution of problems and needs as primary goals for
future strategy
 Step 5-Select Project Strategy
Example – affordable housing
Past experience- Awareness, documentation and access to soft loan
– major hurdles- use services of NGO
Project strategy
• Simultaneous development of neighbourhood .
• Locate in transit node where public transport available.
• Campaign and assistance of NGO for awareness, documentation
and facilitating loans
• Use prefab modular technology for fast construction
 Step 5-Select Project Strategy
Use visual aids to explain to stakeholders
• Gantt chart
• Flow chart
• WBS
• PERT
• Kanban Board
 Step 6- Plan for Contigencies
• Develop risk management approach
• Corrective action plan for identified risks
Example of risks
• Personnel – Turnover, shortage of labour , skills, Pandemic
• Schedule – late start , delays
• Scope – Poorly defined requirement
• Cost- Underestimating costs, lack of funds
• Stakeholders- Continuous support, customer acceptance , Govt
support
• Management
 Step 7-Design an Evaluation Plan
• Detailed document that defines criteria to determine project
effectiveness and efficiency
• Use indicators
• Outcomes – measurable changes
• Impacts- Impact evaluation assesses program effectiveness in achieving its
ultimate goals.
 Step 7-Design an Evaluation Plan
Output- Develop 1000 affordable housing units at - location by Dec 2022

Outcomes
Impact

Increased No of Improved safety,

Increased access Improvement in
applications for health and
to housing neighbourhood
housing units quality of life

Indicators
No of loans granted under PMAY No of applications received for housing units
No of occupants Turnover of occupants New neighbourhood facilities
Crimes in neighbourhood, children going to schools
 Step 8: Budgeting
Financial resources required to be allocated to the project
Project costs, sale price, Financial and Economic feasibility
 Step 9:Project Proposal
• Summary of content of last 8 steps
• For approval of key stakeholders
• After approval- -project moves to next stage- Planning
Part2 : Change management
Changes during Project Lifecycle
What is a change ?
• Modification to an agreement between project participants.
Issues
Differences in perception
Eg –Change in Painting specification
Minor for owner or main contractor
Significant impact on subcontractor – cost and schedule
Need to have common understanding of change , change control and
management
Change Control and change Management
• Change control is the process or processes that can lead to the
alteration of the timescale, the cost or scope of the project.
• Change management in turn involves the management of the control
process so that these changes to the timescale, cost and scope are
effectively implemented.
Changes during Project Lifecycle; Dynamics of
Change management
Elements of Project subject to Change
• Project scope
• Project specifications
• Project organization
• Work execution methods
• Control methods
• Contract and risk allocation
Why do Changes Occur
Owner initiated
• Change of requirement/Priorities
• New Technology
• Finances
• Errors in original requirement
• Value Engineering
Why do Changes Occur
Contractor caused
• Contractor’s errors
• Contractor’s labour problems
• Value Engineering
Neutral Events
• Unforeseen site conditions
• Unforeseen weather conditions
• Force majeure
• Third party
Some QS- Changes in Construction project
• Who initiates change proposal?
• When would a contractor initiate change proposal?
- Benefit to project(value Engineering- cost /time /value)
- Incorrect Employer’s requirements
- Neutral events if they impact time and cost and Employer has not instructed change
Can a contractor refuse to implement change?
• Work unforeseeable as per original scope and specifications
• Cannot readily obtain goods
• Adversely effect compliance with Health/Safety/Environment
What if the Engineer still directs implementation of change?
Changes during Project Lifecycle; Dynamics of
Change management
Why are we not able to recognize change ?
Scope Creep
Scope creep (sometimes known as “requirement creep” or even
“feature creep”) refers to how a project’s requirements tend to
increase over a project lifecycle.
Eg -Consider a company that is launching a new type of phone case
next month. The company has meticulously planned the product
launch from start to finish. However, over the course of development,
the CEO and exec team decide they want to add a ring light, battery
pack, and other elements to the case. This requires the project team to
spend considerable additional time on this product, which, in turn,
affects the product’s final launch date and the attendant revenue.
Scope Creep- Denver International Airport
Denver International Airport
Scope Creep- Denver International Airport
• Automated system for handling luggage travel and transfers.
• The goal was to replace the standard reliance on manual labor with a fully-automated
baggage system that would also integrate all three terminals. It would reduce aircraft
turn-around time for faster service to travelers.
Warning Signals
• Warning #1-After airport construction started, the City of Denver hired Breier Neidle
Patrone Associates to evaluate if the proposed baggage system project was feasible. The
company flat-out stated that the plan was too complex. The city decided to pursue the
possibility anyway.
• Warning #2: A similar, simpler project in Munich took a full two years to be completed,
followed by six months of 24/7 testing prior to the actual launch. The larger, much more
complex Denver International Airport system was due to open in a little over two years.
Which means that Denver International Airport was trying to cram a very complicated
project into a very short timeline
• Warning #3: When the airport began accepting bids on the new luggage system project,
only three companies submitted proposals. Of those proposals, none of them predicted
they'd be able to finish the project within the allotted timeframe. The city rejected all
three bids, and instead approached a fourth company, BAE Systems, to convince them to
take on the superhuman project; again, without changing the proposed timeline.
Scope Creep- Denver International Airport
Warning #4: Senior managers at BAE Systems expressed initial
misgivings about the project's complexity. They estimated a 4-year
timeline instead of 2 years, but the concern was ignored and the
project went on with its 2-year deadline still in place.
Key stakeholders excluded from planning
• Airlines
Once the airlines were finally asked for their opinions, they required
major changes from the project team: adding ski equipment racks,
different handling for oversized luggage, and separate maintenance
tracks for broken carts. The requests required major redesign on
portions of the project — some of which had already been
"completed." But these requests were not optional features for the
airlines, and the project team was forced to redo their work.
Scope Creep- Denver International Airport
End result
The project went 16 months past its hard deadline, cost the city $560
million over budget, and performed just a fraction of its original
automation goals. Instead of integrating the three concourses and all
airlines, it was only used at one concourse, for one airline, for
outbound flights only. The project team had to resort to building a
second, manual labor system for all other baggage operations. And
after valiantly attempting to use the system for 10 years, the only
airline that actually adopted the system finally bowed out due to high
maintenance costs.
Change management in construction
Steps of Effective of Change management

Resolve
Plan Change Identify Evaluate Implement Disputes
Management Change Change Change and Claims
 Steps of Effective of Change management
Owner/PIA (Project/program Implementation Agency) could order Scope Changes by “Change instructions”
or by “Request of proposal”. For scope changes by instruction, this may be called Change Management
Process or Contract variation Process” which start when Employer/Owner inform the “change” to the
contractor and ends when a Change Order is issued. However, the changes cannot be frequent and
uncontrolled, which invariably results in poor project performance.
It is important to promote a balanced change culture across program and constituent projects, to ensure:
• Only changes that preserve program benefits and project objectives are undertaken
• Personal preferences and prejudices which result in unnecessary changes are discouraged
• Program management team/project management team decides to say “NO” to changes at appropriate
stage in project keeping the cost of change and opportunity to influence into account.
• Continuously implement lessons learnt from one component project to other in managing changes.
Changes and Opportunity to Influence Outcomes

Major Influence Low Influence

Cost of Changes Opportunity for Influence

Planning and Schematic Design Construction Construction

Programming Design Developments Documents
Planning change Management
Change Management Plan should address the process of identifying to
implementing changes with focus on protecting project objectives and realizing the
program benefits.
Qs
• Who initiated the change?
• Why it was initiated?
• When it was initiated?
• Where did the change occur or come from?
• What is the change?
• Who is affected by change?
• What elements or variables got impacted?
• How much each variable (cost, time etc) impacted?
• What is the sum effect of all impacts?
• Justification for change?
• Alternatives to the proposed change which has lesser impact?
Example
Contractor initiated proposal for replacing polished Kota stone with
ceramic tiles in low cost housing project
Change Management process

Identifying change
• From the baseline
Evaluate change
• The next step after formally recognizing a change to the project Baseline by
issuing a Contract Change Notice (CCN) is to categorize it and quantify its
impact to the project. Project Manager shall review the CCN with the originator
and Project Controls to determine if it is valid or not and approves or rejects it
accordingly.
• Check whether a change identified deserves a CCN or it is actually internal
change/performance adjustment that a contractor needs to undertake to bring
project on track
 Schedule delays by Contractor

Owner delay in approving design.

Value Engineering proposal

Raising CCN? Unforeseen site conditions

Impact of Covid

Delay by subcontractor
Assignment- Group 1
Team 1- Project Design of a shopping complex and contingency
planning for changes
Team 2- project Design for a slum redevelopment project and
contingency planning for changes
Team 3- Project design for highway project and contingency planning
for changes
Team 4 - Project design for a old age home complex and contingency
planning for changes
Team 5- Project design for a starting a claims consultancy company
and contingency planning for changes
Team 6 - Blue Circle Industries Plc v Holland Dredging Co Ltd (1987)
37 BLR
Team 7 – Procedure for Change in CPWD contract manual
Team 8- procedure for Change in NBCC contract manual
 Assignment- Group 2
Team 1-Why costs overrun: risk, optimism and uncertainty in
budgeting for the London 2012 Olympic Games.
http://dx.doi.org/10.1080/01446193.2012.668200

Team 2- Value engineering under the FIDIC forms by Manuel Conthe

(Spain)(extract will be given)- analysis – what can go wrong?
Team 3- Millennium Dome at Greenwich(from internet)
Team 4- 4 laning of Gwalior Shivpuri Highway(PMI_KPMG report Revamping
Project management 2019- changes and Impact
Team 5-Lalitpur- Khajuraho New BG Rail Line Project(PMI_KPMG report
Revamping Project management 2019)- Changes and Impact
Team 6- Procedure for Changes in Model Niti Aayog EPC contract
Team 7- Procedure for changes in FIDIC Red Book 1999
Thank you