How to Reduce Internal Change Orders (ICOs) On Your Large Projects

How to Reduce Internal Change Orders (ICOs) On Your Large Projects

Change orders are common place for many integrators.

Despite the team’s best efforts when creating the original contract and scope of work, unforeseen obstacles and customer requests can result in project changes or delays.

One study of Egyptian construction contractors found that project costs increased between 11% and 15%, and that project time increased between 10% and 20% due to change orders. This is quite a jump in both time and price from the original contract amounts!

For customer-requested changes, a change order may actually be beneficial. While a change order request submitted by a customer can extend the completion date of the project, it can also bring in new work and additional revenue for the team. These requests are billable and allow project managers to appropriately adjust their schedules and costs.

Unfortunately, many projects are subject to cost overruns and massive penalties due to planning and design failures from within the team. In these situations, the change order process isn’t initiated by the customer — it’s initiated by an internal team farther downstream.

These internal change orders (ICOs) create additional work outside the scope of the project, requiring the integrator to foot additional costs in order to complete contracted projects.

Let’s take a closer look at what causes an ICO and what your project team can do to eliminate them.

What Causes Internal Change Orders?

No team starts out with the intention to create additional work for itself, but between oversight failures and project mismanagement, large projects are often revised after the original contract is accepted.

Here are a few common reasons that trigger an ICO:

  1. Team miscommunication
  2. Design errors during the planning stage
  3. Unforeseen conditions at the job site
  4. Lack of customer collaboration

While it may be impossible for teams to eliminate ICOs completely, better communication and collaboration techniques can drastically improve the original scope of work and help teams account for unexpected circumstances.

Building Team Cohesion and Trust

Investing in ways to build team cohesion can save thousands in labor hours and cost overages down the road. While it might not sound relevant to reducing ICOs, teams with strong cohesion are more likely to harness the power of diverse ideas from team members and bring in additional revenue.

It’s also important for leadership to get all teams involved and to build an effective strategy for lasting, internal communication. One study found that 60% of brands don’t have a long-term internal communication strategy and 12% don’t even measure the effectiveness of those communications.

For integrators, this can be a problem because teams are often siloed. Design teams operate independently from installation teams, and both groups use different systems to accomplish their work. Without an effective strategy to collaborate and share information, it’s only a matter of time before miscommunications in the project lead to costly and significant changes.

Lower team cohesion and fear of repercussions can also lead to mishandled projects. Right now, roughly one-third of employees say they’ve made bad decisions or submitted poor-quality work because they were too afraid to admit that they didn’t know how to complete a task. Designers and installers don’t feel comfortable asking team members and supervisors for help can create a recipe for disaster somewhere down the line.

By building trust between teams and team members, integrators can help to ensure that the original plans being passed along to the installation team have been thoroughly reviewed and revised before everyone has committed to the project timeframe and costs.

Collaborating With Customers

Working with customers to create design plans and contract documents is one of the best ways to eliminate the need for an ICO to be issued.

As much as possible, every project should be a collaborative effort between project stakeholders and integrators. From kickoff meetings and consults all the way to walkthroughs and preliminary designs, customers are a wellspring of information about the project vision, the conditions at the installation site, and more.

By collaborating with customers, your team can improve the quality of the project and reduce the number of external change orders. On top of that, asking the right questions helps to ensure that the designs your team comes up with are a great fit for the customer’s needs and unique conditions.

With just basic information, sales and design teams can eliminate many of the common causes that create ICOs. That information may also give the project owner and contractors key insight into the estimated total price and whether to request additional time for the project before signing a contract.

These questions can be difficult to answer if you’re just focused on hardware. By digging out the reason for the purchase and aligning with the customer’s end goal, integrators can go above and beyond in establishing rapport and building trust – a huge driver in customer decision-making when choosing brands to buy from and companies to work with.

Leveraging Technology

In some ways, technology has helped integrator teams communicate more effectively between themselves and customers. One study found that 98% of employees who were connected to a technology platform used that platform to collaborate and 83% depended on that technology to collaborate in the first place.

In others, these digital tools have made it even harder to access information effectively — especially between teams.

While email makes it easy to contact customers and send documents, many integrators still use pen and paper tools to conduct site walkthroughs, and those using digital software to create customer floor plans typically end up using applications created for other industries. To top it all off, teams use different software applications in order to create designs, calculate costs, and compile information.

A member of the sales team might use an app to conduct a site walk, but they’ll end up using a spreadsheet to itemize costs and create a parts list. Creating each piece of information separately leads to lost documentation and a lack of visibility for key stakeholders on the project.

This is one reason that customers often get left out of the loop when it comes to reviewing floor plan mockups and designs. Customers aren’t privy to the integrator’s internal process. They can provide feedback when a system designer or a sales rep shows up for a site walk, but many other phases in the design process are hidden from view.

Weeks later, a design shows up that the customer had a limited say in creating. It looks right. They approve the design and agree on the price only to find the entire project drowning in problems as soon as the installation begins.

Internally, ICOs are everywhere as installers uncover new details about the project that require changes. The associated cost overruns and missed deadlines cause the project to fall behind or fail entirely.

The worst part: With the right technology, these problems can be avoided.

But integrators need project management software and digital tools that are specifically designed for them, not for generic project or construction industry jobs.

Reduce ICOs and Boost Team Collaboration With SiteOwl

SiteOwl was created to help integrators and customers in the security space collaborate more effectively.

As a platform, SiteOwl acts as a repository for all project information. In the field, it provides live project updates and a bird’s eye view to installers and technicians. At the home office, project managers can monitor project progress in real time. Project stakeholders can also join the project, get status updates, and stay connected throughout every stage of the design-install process.

All of these tools help integrators address problems quickly and implement changes before additional costs and delays negatively impact the project.

There will always be unforeseen conditions in projects and complications that require ICOs, but, by enhancing team cohesion and customer communication, integrators can reduce the number of written change orders they receive.

Want a better look at how SiteOwl can streamline your project workflow? Schedule a free demo today!


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