Have you ever had one of those electrical estimating projects that just seemed to keep growing?
Just when you think you’ve got a handle on what is required, the goal posts shift and you’re left having to re-count and re-calculate your estimate. The danger with electrical estimating scope creep is that it can result in an inaccurate estimate. Sometimes it’s hard to keep up, or to know everything that has changed.
You’ve got deadlines to manage and you need to ensure that your business is actually making money from your electrical projects. How can you manage “scope creep” with those things in mind?
What is “scope creep”?
“Scope creep” is a project management term that fits well with similar situations in electrical estimating. It refers to changes or growth in the scope of a project at any time after the project has already begun. For example, if you’ve already nearly completed or submitted an electrical estimate and someone decides to add a whole lot of extra requirements, this could be scope creep.
The problem with scope creep in any kind of electrical or construction project is that it makes accurate planning and estimating difficult. If the scale of the “creep” changes the nature of the work in any sort of substantial way, or the labour hours or materials needed, then your estimate might need to look completely different.
This can lead to issues with clients when the estimate looks significantly different, but even more commonly, it can lead to mistakes that eat into profitability. Scope creep is notorious for messing with your margins. What if that change that seemed like “a small thing” to the client actually adds another 20 hours of labour? (For example, “can we run wire through the concrete block wall instead?”).Scope creep can lead to major blow-outs on electrical projects Click To Tweet
Why does scope creep happen?
The most common reason for scope creep in electrical estimating projects is that the project was not completely defined in the first place. Often in the construction sector, there are time pressures to get moving on projects, even if they’re not fully ironed out yet. Investors want to start making money from their project as soon as possible, or public sector managers want facilities in action as soon as possible.
Sometimes architects, engineers or builders don’t want to spend too much time upfront on a project because they’re not making a lot off those early-stage processes (such as ensuring designs are fully specified). This can result in electrical estimators only getting part of the story and being expected to come up with an estimate from it.
It’s hard to base estimates on different degrees of unknown quantities. On the one hand, you want to ensure your estimate is competitive, whilst on the other, your company needs to make a profit. This is one reason why estimates for the same project will often vary widely – it’s difficult to account for the unknown.
Another possible reason for scope creep is that the client is indecisive about what they want, or in some cases, they’re trying to get extra work done “on the cheap.” Skilled project managers become used to having to manage expectations and put clear steps in place for making any changes. What do you do when you’ve estimated all the lighting, potentially even ordered the necessary inventory, and the client changes their mind? Any changes like this can alter the cost of the inventory as well as cost of installation.
Lastly, another potential reason for scope creep in electrical projects is when there is direct, unmanaged contact between the client and any workers on your team. Sometimes a casual conversation can turn into promises to get something done, whether or not that was in the original specifications.
How can you manage scope creep?
There are a few strategies you can put in place to help mitigate or manage scope creep. It happens to everyone at some point, so often the best you can do is strategise to manage it:
Look for Early Contractor Involvement (ECI)
If Early Contractor Involvement (ECI) is an option, this can be very helpful for reducing or eliminating scope creep. ECI means that contractors become involved in a project earlier – during the pre-construction phase, which enables them to have some input. For example, you can estimate concurrently with design development. This in turn will keep you in the loop as far as design changes and any impact on estimating.
ECI is a relatively new idea that has been catching on worldwide. Traditionally, the client would first approach consultants to design the project before getting contractors involved. According to Designing Buildings:
“Typically, early contractor involvement might be enabled by a two-stage tender process, used in the first stage to procure contractor involvement in the design process, and in the second stage to procure construction of the works. Other procurement routes, such as design and build, construction management, or management contracting might also allow a contractor to become involved in the design stage.”
ECI is typically used on larger projects, but can be adapted for projects of any size. There are advantages for the client as well – for example, they might be able to get a more complete design and expert advice on that design earlier. They can find that a design is up to 95% complete prior to tendering, rather than the much less complete form that is often being put out for tender.
Have clear communication processes
Sometimes scope creep can happen through misunderstandings or poor communication. Perhaps the client would like to change something on the design but doesn’t know which contractors that change will affect. On big projects, there should be a project manager who stands as the facilitator of any change. They should be able to see who the change impacts and communicate with them appropriately.
On smaller projects, it’s also a matter of having good processes and clear communication channels. So, if the client was to change their mind about their lighting design or whatever the electrical need is, they should know who to contact and what the process is.
Any changes should be documented very clearly. A common requirement on projects is to fill out a change order so that there is a clear paper trail. This also helps to keep everyone on the same page with regard to what is in-scope and included in pricing, and what is an extension of scope and will impact pricing.
From the estimator’s point of view, if something is ambiguous about the specifications or tender documentation, ensuring that RFIs (Request for Information) are used is essential. Where you can’t get good clarifications, leave some assumptions and specific inclusions or exclusions on your estimate.
It’s worth noting that any team members should know exactly who any requests should be directed to. One origin of scope creep can be conversation between the client and workers on your team – it’s important that team members don’t make any promises and refer the client to the appropriate person.
Lastly when it comes to communication, it’s important for electrical estimators to maintain good relationships with project managers (if there is one). This ensures that you help each other out and that changes are communicated early.
Use the right tools for estimating
Even without scope creep in play, estimating can be prone to error. Every electrical estimator runs a fine line, balancing accuracy with a need to be timely with estimates. Any sort of changes made to the design or specifications has the potential to throw the estimate off, especially if the estimator is using manual methods of counting.
Fortunately, there is a solution with digital take-off software. Countfire allows you to quickly and easily count take-offs automatically. You can upload new drawings and account for any changes, then quickly see if your quantities and estimates need to change.
Besides any time factor, the biggest negative of scope creep for companies tends to be the danger that they don’t make the profit margins they require. Efficient take-off software helps by freeing up time so that the estimate can be double-checked.
Scope creep can impact the timelines and costings of projects. It’s a fairly common issue, but it can be managed or mitigated with some careful strategies. The bottom line is that you need clear communication with clients, including complete documentation to outline scope. Any change requests should be communicated through the right people and not promised in a casual conversation. Early involvement can also help to ensure everyone is on the same page.