Project management has never been easy. Being at the centre of your clients’ expectations, and various internal role players and systems, require special skills and controls. To deliver a product or service profitably, remains an art.
What is scope creep
Scope creep is the unintended and unauthorised addition of features, functions or requirements to a project above and beyond the initially agreed-upon scope. According to Sylvia Moses from Workamajig, scope creep can be defined in simple terms as follows: ”Scope creep in project management refers to continuous and incremental changes that lead to an uncontrolled and unauthorised growth in the project’s scope”.
When/Why does scope creep happen
Managing scope is a serious reality, especially in new projects. Clients often don’t fully understand what they want. As the project unfolds, they gain a better understanding of their own requirements. And when they do, they start asking for additional features, taking the project beyond its original scope.
During scope creep, a project team devotes time and skills to these unbudgeted changes. This often results in critical authorised features not being completed, or it can mean cost overruns to properly complete the authorised scope. The end-result is staff overspending on their time budgets, unhappy clients due to missed deadlines and ultimately your loss in profits.
Some of the main causes for scope creep is a lack of clarity and depth to the original engagement contract and poorly defined scope requirements and mutual expectations.
Your solution: How to avoid scope creep
Your answer is a formal yet simple document that sets out what has been agreed regarding the scope of the project, its price, and the payment terms. This document is referred to as a Service level agreement (SLA), Fee and scope of work agreement or an Engagement letter, and should comprise the following components:
- Clearly stated extent of the scope, parameters and deliverables of the project
State exactly what work needs to be done, how much there is and how the work will be approaches. There should be no dispute over the scope. - The price and payment terms
Obviously, your SLA should set out what the price is. This price should be agreed on during your price conversation with the client. It should also outline when and how payment required. - The client’s choice of level of service (package)
This confirms the options that the client has selected and also shows the options declined. - Signature is key
It is important that both parties sign the SLA as this should give them peace of mind. By signing the contract your client now knows the terms and conditions that both benefits and protects each party. - End date of engagement
Make sure you stipulate an end date or milestone to the engagement. We seldom find that a reasonable price is negotiated in year one for recurring services, but after five years the same fee gets charged. By making it clear that the fee is agreed for a defined period, your client will expect you to revise his fee for the next period.
In order to be able to compile such a document, the client needs to be present in the quotation and planning meeting. A thorough needs analysis needs to be conducted as to what the clients’ needs and expectations of you are. By using our Value pricing platform, the scope of work can be clearly defined and stipulated by the client, even if you are working on timesheets at this point in time.
SLA’s form part of the end result of our uniquely developed pricing software. If scope creep eats away at your company’s profits, we have a practical solution and tool for you to use.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
