What Do You Do About Unpaid Scope Creep?

What is Scope Creep?

If you operate an architecture, engineering, or similar design practice—no doubt you will have a scope of services, a consultancy agreement or a signed fee proposal, which is agreed at the commencement of the project (or the stage). This should clearly articulate what services you will be providing for an agreed fee and that the project is performed on-time, to budget, and with great outcomes for all the parties involved. Scope creep is when you perform work that is outside of this agreed scope of services.

There are 2 main types of scope creep:

1. Changes to the scope created by external factors

2. Changes to the scope created by internal factors

Occasionally the industry is paid in the first scenario, however, you’ll likely never be paid in the second. Unpaid scope creep is still a major issue for architects, engineers, designers, and professional services in general.

Why does it occur?

Generally, projects performed to the agreed scope of services are few and far between, when creative professionals are actively engaged with clients, authorities, other consultants, and local government for any length of time.

Those factors outside of the control of the architect, engineer or designer (external factors) include:

• A change of client

• Changes to rules and regulations

• Unknown environmental or site conditions

Work performed because of this is typically called a variation or change to the services—and sometimes you are reimbursed for this work.

However, most scope creep is created because of internal factors created within the studio, and you will never be paid for this. These reasons include:

• Lack of clarity in the scope of services

• Inadequate internal controls

• Unresolved designs

• Over documentation

• Not capturing the out of scope work

• Not clearly articulating what is outside the scope i.e. what you won't do

Also, architecture, in particular, is prone to widespread design and documentation changes. Architects have an innate tendency to over-service and do whatever is required to achieve the best outcome. This mentality is reinforced at university where there are no defined boundaries around the work to be performed, the inputs required and no effective project planning.

“Extra effort is often viewed with pride – going the extra mile because, after all, we’re service providers” – John Doering PSMJ Resources

What’s required

What’s required is a cultural and behavioural change in your business. (And this won’t be achieved by reading and filing this article!)

Firstly, you need to understand and acknowledge the cost to your business. Rework and scope creep combined can add up to 40 % of the project costs!

Having said that, this can be impacted, more effectively managed, and controlled with the right leadership and systems in place; but a change in behaviour is required. Unpaid scope creep causes frustration, delays, low profitability and disenchantment in the studio.

Your leaders will need to drive the process, so they need to be actively involved. We suggest identifying the issues with your leadership team and project leaders.

No doubt, some of these issues will include:

• An inadequate scope of services

• No articulation of what is additional, what is a change/variation and how you as a business deal with this

• Not capturing the work that is additional

• A culture of over servicing

• Poor project planning

• Ineffective or no systems for managing changes to the scope

• Leaders accepting the status quo

Develop an action plan with responsibilities for making it happen. Be mindful that you won’t succeed in trying to implement everything at once.

Your action plan could be:

• Raise the awareness in the studio: e.g. mention and discuss this at the next six employee meetings

• Review your scope and develop a more concise list of exclusions

• Develop a system to capture work that is outside the agreed scope—use the timesheets

• Identify the root causes (your system is a set of behaviours – not a piece of software)

• Ensure all projects have a project plan (that is consistent with the scope of services)

• Implement internal design sign-offs at agreed milestones

• Implement client sign-offs at the completion of stages

• Ensure all identified scope changes are signed off internally before the work commences

• Capture and charge for the work between the end of one stage and the commencement of the next stage

• Introduce a reward system that is linked to project profitability for the project team/leader

• Identify a scope change and charge for it early in the project to establish the process

What’s the point?

Project performance depends on effectively managing the scope of services—and business profitability starts and ends with project performance!

Scope creep is one of the main reasons for under-performing projects and results in more work, more resources, missed deadlines, and frustration—yet not much has been done within the industry to radically change things

It’s not an easy fix - it requires the business leaders to focus on, and commit to, an effective design management process, quality management, education, regular review, and open communication. It especially needs responsibility and accountability (and that requires leaders to commit to change!). The leaders need to set the example and can’t delegate these change processes to “office manager”. Quite often the leaders are the main cause of the scope creep in the first place!

If you can commit to the behaviour change required to develop and ensure your way of working is as effective as it can be, there are so many benefits that can be achieved, including:

• Work is more consistent and there is less re-work

• Less time/on time

• Improved profitability with increased efficiency and scope control

• Will attract and retain great people

• More effectively manage and assess the performance of projects and people

• Systems create time for the leaders to be entrepreneurs

• Allows others to take responsibility for different components of the business

• Improved and consistent client management

• Mental health, work/life balance

• Facilitates and enables growth

Prosperity, happiness, having a life outside your business depends on how well your practice performs!