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How to simplify construction change order management

Construction projects can be very complicated, and unexpected changes often arise that can affect the work. To manage these changes and keep the project on schedule and within budget, a change order is essential. A change order is an amendment to the original construction contract that changes the scope of work, schedule, or cost. While some change orders are unavoidable due to unforeseen conditions or client requests, many are caused by preventable issues such as design errors, miscommunication, or incomplete plans.

Change orders can have a significant impact on a construction project. They often lead to project delays, budget overruns, and strained client relationships. For example, a single change order can set off a chain reaction of delays, pushing back subsequent tasks and increasing costs. Frequent change orders can also frustrate clients and make them lose trust in the construction team's ability to complete the project as planned.

This blog will look at the causes and effects of change orders in construction and how OnSpace, an all-in-one platform for managing your change orders, can help you avoid them. By using OnSpace’s customizable change order templates and advanced features, construction teams can reduce the risk of change orders, ensuring smoother project execution and improved client satisfaction.

Causes of Construction Change Orders

1. Client-Requested Modifications to the Original Design:One common cause of construction change orders is when clients request changes to the original design. This can happen for various reasons:
• Changed Preferences: Sometimes, clients change their minds about certain design elements after construction has started. For instance, they might decide they want different flooring, a different paint color, or additional features like a larger patio or extra windows.
• New Needs:As the project progresses, clients might realize they have new needs or requirements. For example, they might need more office space, additional rooms, or extra storage.
• Unexpected Discoveries:During construction, clients might discover that certain design elements don't work as they expected. For example, they might find that a room is too small, a hallway is too narrow, or a window doesn't provide enough natural light.

When clients request these changes, the construction team must issue a change order to document the new scope of work, adjust the schedule, and update the budget. While these changes are sometimes necessary to meet the client's needs, they can lead to delays, increased costs, and additional work for the construction team.

2. Unforeseen Site Conditions Requiring Adjustments to Plans:Another cause of construction change orders is unexpected site conditions. These are issues that weren't known before construction started and can significantly impact the project. Here’s how they can occur:
• Hidden Utilities: During excavation or groundwork, the construction team might discover underground utilities like water pipes, gas lines, or electrical cables that weren't on the original site plans. These need to be relocated or worked around, requiring changes to the construction plans.
• Soil Problems:Sometimes, the soil quality or stability is different from what was initially expected. For instance, the soil might be too soft to support the planned structure, requiring additional foundation work or soil stabilization measures.
• Environmental Issues:Unexpected environmental conditions, such as groundwater contamination or protected wildlife habitats, can also arise. These issues might necessitate changes to the construction plans to comply with environmental regulations or to protect the environment.
• Structural Discoveries:If the project involves renovating an existing building, the construction team might discover structural issues that were not apparent in the initial assessment like rot, rust, or weak support beams that need to be addressed.

When these unforeseen site conditions are encountered, the contractor issues a change order to update the plans, timeline, and budget to accommodate the necessary adjustments. These changes are crucial for ensuring the project's safety and success, but they can lead to delays and increased costs.

3. Inaccurate Estimates: Errors or Omissions in the Initial Project Specifications: Inaccurate estimates often necessitate construction change orders. These happen when there are errors or missing information in the initial project plans. Here's how this can occur:
• Incorrect Measurements: If the initial measurements of the site or materials are wrong, it can lead to significant issues. For example, if the size of a room is measured incorrectly, it might require redesigning parts of the building to fit everything properly.
• Missing Details:Sometimes, important details are left out of the initial project plans. This could include things like specific materials needed or the exact layout of certain areas. Without these details, the project can't be completed as planned.
• Overlooked Requirements:Certain requirements might be overlooked during the planning phase. This could involve building codes, safety regulations, or specific client needs that weren't initially considered.
• Budget Miscalculations:If the initial budget doesn't accurately reflect the true costs of materials, labor, or other expenses, it can lead to financial shortfalls. This requires adjustments to the project scope or timeline to stay within budget.

The moment these inaccuracies are discovered, change orders are necessary to correct the plans, update the budget, and adjust the schedule. These changes are essential for ensuring the project can move forward correctly, but they often result in delays and added costs.

Consequences of change orders in construction

1. Project delays:When changes need to be made in the middle of construction, it often slows down the entire process. Work may need to stop while the new plans are reviewed and approved, which can take days or even weeks. Sometimes, completed work has to be redone, such as moving a wall or using different materials, requiring crews to tear down and rebuild sections. This disrupts the schedule for all teams involved, as they might have to wait for other tasks to be completed before continuing. Additionally, new materials may need to be ordered, causing further delays as they arrive. Coordinating these changes with all stakeholders, including the project owner, contractors, and suppliers, takes time because everyone needs to be aware of the new plans and adjust their work accordingly. These delays push back the project completion date, causing frustration and potentially leading to penalties.
2. Budget overruns:When changes are made to the original plan, it often means extra costs. For example, if new materials are needed, these may be more expensive than those initially planned. Labor costs can also increase because workers might need to spend additional time making adjustments or redoing completed work. These extra hours add up quickly, leading to higher labor costs than originally budgeted. Moreover, stopping and restarting work to implement changes can create inefficiencies, which further drive-up costs. All these unexpected expenses can cause the project to go over budget, straining financial resources and potentially requiring additional funding to complete the project.
3. Reduced project profitability: When a project goes over budget due to unforeseen changes, the extra costs often cut into the profits that the construction company expects to make. If a company has to spend more on materials, labor, and other resources to implement the changes, their overall profit from the project decreases. Additionally, the time and effort required to manage and implement change orders can divert resources from other projects, reducing efficiency and further impacting profitability. Ultimately, frequent change orders can make it difficult for construction companies to maintain their financial health and achieve their profit goals.
4. Disputes and communication breakdowns: When changes are made to the original plans, it can lead to misunderstandings and disagreements about what needs to be done and who is responsible for the additional costs and delays. Clients may feel frustrated if they believe the changes are unnecessary or too expensive, while contractors might struggle to explain the reasons for the changes and their impact on the project. These communication issues can strain the relationship between contractors and clients, leading to conflicts and a lack of trust, which can further complicate the project and make it more difficult to complete successfully.

OnSpace: An All-in-one Platform for Optimized Change Order Management

Construction change order management without the right tool can be a tough nut to crack, but worry less, OnSpace got you! Here’s How:

1. Automated Workflows and Approvals:OnSpace enhances the process of managing change orders by automating approval workflows. Here’s how it works:
   
   When a change order is initiated, OnSpace allows you to define clear approval processes. This includes specifying who needs to review and authorize the change order. For example, the change order might need approval from the project manager, architect, and client before proceeding.
   
   The platform automatically routes the change order to these stakeholders, sending notifications and reminders as needed. Stakeholders can review the details of the change order directly within OnSpace, including any associated documents or comments.
   
   Automating workflows reduces the likelihood of delays or misunderstandings that can occur with manual approval processes. It ensures that change orders are processed efficiently and transparently, keeping the project on track and minimizing the potential for disputes or errors.
   
   By using automated workflows and approvals, construction teams can improve communication, maintain accountability, and ensure that all changes are implemented smoothly and in accordance with project requirements. This contributes to overall project efficiency and client satisfaction.
2. Centralized Change Order Management System:OnSpace enables you to manage all construction change orders electronically in a single platform. This system ensures that all stakeholders have access to the latest change orders and can track modifications throughout the project lifecycle. By centralizing this process, OnSpace reduces the risk of miscommunication and ensures that everyone involved is on the same page regarding project changes. Additionally, the platform provides customizable templates for change orders, streamlining the approval process and helping to prevent disputes over scope changes and associated costs. This centralized approach improves transparency, accountability, and efficiency in managing construction projects.
3. Integrated Document Management:OnSpace allows you to store and access all project documents, such as plans and specifications, in one central location. This ensures that all team members, including contractors, architects, and engineers, can easily find and reference the latest project documents whenever needed. By eliminating the need for multiple copies or versions of documents, OnSpace reduces the risk of errors or omissions arising from using outdated information. Additionally, the platform provides secure access, ensuring that sensitive project documents are only accessible to authorized personnel. This centralized document management system promotes collaboration and enhances overall project efficiency by keeping everyone informed with accurate and up-to-date project information.
4. Change Order Templates:OnSpace simplifies the change order process with digital, customizable form templates, eliminating the need for traditional tools like pen and paper or Excel sheets. Users can add calculation fields directly into these forms to automatically compute material costs or time differences as entries are made. This integration minimizes the potential for human error, ensuring that change orders are precise and dependable for analysis and decision-making. This efficient approach enhances accuracy in cost estimation and overall project management effectiveness.
5. Change Order Templates:OnSpace simplifies the change order process with digital, customizable form templates, eliminating the need for traditional tools like pen and paper or Excel sheets. Users can add calculation fields directly into these forms to automatically compute material costs or time differences as entries are made. This integration minimizes the potential for human error, ensuring that change orders are precise and dependable for analysis and decision-making. This efficient approach enhances accuracy in cost estimation and overall project management effectiveness.
6. Transparent Communication: OnSpace enhances project transparency by enabling real-time communication among all stakeholders involved in change order processes. This eliminates the need for frequent phone calls and emails by providing instant updates and notifications directly within the construction change order form. Team members can easily follow up on discussions, clarify details, and address concerns promptly, promoting better collaboration and reducing misunderstandings. This smooth communication ensures that everyone stays informed and aligned throughout the change order process, facilitating smoother project execution and enhancing overall efficiency.
7. Mobile Accessibility:OnSpace offers mobile accessibility, allowing users to access and manage change orders directly from their mobile devices. This means that project managers, contractors, and other stakeholders can view, review, and approve change orders even when they're not at their desks or on-site. This capability ensures that critical decisions can be made promptly, regardless of location, which helps to keep projects on track and avoid delays. By enabling mobile access to change orders in construction, OnSpace enhances flexibility and responsiveness in project management, supporting efficient workflows and timely decision-making.
8. Transparent Communication: OnSpace enhances project transparency by enabling real-time communication among all stakeholders involved in change order processes. This eliminates the need for frequent phone calls and emails by providing instant updates and notifications directly within the construction change order form. Team members can easily follow up on discussions, clarify details, and address concerns promptly, promoting better collaboration and reducing misunderstandings. This smooth communication ensures that everyone stays informed and aligned throughout the change order process, facilitating smoother project execution and enhancing overall efficiency.
9. Reporting and Analytics:With OnSpace, you can generate reports that analyze trends in change orders. These reports help identify common issues or patterns that lead to change orders, allowing construction teams to implement preventive measures in future projects. By understanding why and how change orders occur, teams can improve planning, communication, and project management processes. This proactive approach reduces the likelihood of unexpected changes disrupting project timelines and budgets, ultimately enhancing efficiency and client satisfaction. Reporting and analytics in OnSpace enable data-driven decision-making, supporting construction companies in achieving smoother project execution and better outcomes.

By utilizing OnSpace's Centralized Change Order Management System, you can streamline communication, tracking, and approval processes. This simplifies construction change order management, minimizing disruptions and improving project efficiency.

Ready to optimize your change order management and boost project success? Book a demo today and experience the difference first-hand.