Change orders are an integral aspect of construction projects, often resulting from design modifications, unforeseen site conditions, or client-driven requests. These changes can have significant impacts on project schedules, budgets, and overall outcomes, making it essential for all stakeholders—such as project teams, contractors, subcontractors, architects, engineers, and clients—to collaborate effectively. Change orders typically account for 12-15% of total project cost overruns, with some projects experiencing even higher percentages.
Change orders introduce additional complexity to a construction project, requiring swift and coordinated responses. If not managed properly, they can result in delays, cost overruns, disputes, and unsatisfactory project results. Construction projects with less than 6% of hours spent on change orders experienced better productivity compared to projects with higher percentages of time spent on change orders. As a result, fostering a culture of clear prioritization and teamwork is critical to managing change orders efficiently and minimizing their impact.
With the global construction industry facing increasing digitisation and technology adoption, digital construction software plays a key role in this process, providing a centralized platform for communication, document management, and project collaboration.
What is a construction change order?
A construction change order is a written agreement between the project owner and the contractor that details changes to the original scope of work in the contract. Change orders usually happen when there’s a need to adjust project specifications, designs, materials, schedules, or other aspects that differ from the original plans. These changes can occur for various reasons, including design mistakes, unexpected site conditions, client requests, or regulatory requirements.
Some of the common challenges associated with change order management on construction projects can include:
- Communication delays: Inefficient communication channels between stakeholders can lead to delays in initiating, processing, and approving change orders. Misunderstandings or lack of clarity regarding the requested changes can further exacerbate delays.
- Documentation errors: Inaccurate or incomplete documentation of change orders can result in disputes, delays, and additional costs. Failure to properly document changes can lead to confusion regarding project specifications and responsibilities.
- Cost overruns: Change orders often result in additional costs, including materials, labour, and administrative expenses. Failure to manage change orders effectively can lead to budget overruns and financial losses for both the contractor and the project owner. Research indicates that the cumulative impact of multiple change orders can reduce overall project efficiency by up to 25%.
- Schedule disruptions: Changes to the scope of work can disrupt project schedules, leading to delays in project completion. Poorly managed change orders can cascade into schedule overruns, impacting subsequent project phases and increasing the risk of penalties for late delivery. Additionally, around 60% of change orders involve subcontractors, complicating project coordination and adding to the administrative burden.
- Disputes and claims: Mismanagement of change orders can result in disputes between the project owner and the contractor, leading to costly legal proceedings and damage to relationships. Disputes may arise due to disagreements over the scope of changes, responsibility for additional costs, or delays in implementation. It is estimated that 25% of change orders become the subject of formal disputes due to disagreements over scope or pricing.
The role of digital construction platforms: How software is streamlining the process
Construction software is an effective tool that simplifies project management by enabling real-time communication and collaboration among all parties involved. These platforms act as central hubs where project managers, subcontractors, architects, and clients can easily share information, provide updates, and discuss project details. This includes document management, scheduling tools, budget tracking, and project analytics.
Some key features of construction software that are the most beneficial for change order management include:
- Automated notifications: Instant alerts to stakeholders when a change order is initiated, updated, or approved. Ensures timely awareness of change order status, reducing delays in response and approval.
- Centralized document management: Single repository for storing all project-related documents, including change orders, drawings, specifications, and contracts. Facilitates easy access and retrieval of documents by authorized stakeholders, eliminating version control issues and ensuring everyone works from the latest documents.
- Customizable approval workflows: Define and customize approval processes based on project requirements, specifying the stakeholders involved and the sequence of approvals. Streamlines decision-making by routing change orders to the appropriate individuals or teams for review and approval, reducing bottlenecks and ensuring accountability.
- Version control and tracking: Track changes made to documents and change orders over time, maintaining a clear audit trail of revisions. Enables stakeholders to review the history of changes, understand the evolution of the project, and identify any discrepancies or discrepancies.
- Integration with other systems: Seamless integration with existing project management, accounting, and collaboration tools. Enhances interoperability and data exchange between different systems, ensuring consistency and accuracy of information across all platforms.
- Reporting and analytics: Generate comprehensive reports and analytics on change order activity, including trends, status, approvals, and impacts. Provides insights into change order management performance, enabling informed decision-making, risk assessment, and process optimization.
- Mobile accessibility: Access to digital construction platform functionalities via mobile devices, allowing stakeholders to manage change orders on-the-go. Increases flexibility and responsiveness, enabling stakeholders to stay connected and engaged with the project, regardless of their location.
Best practices for implementing digital construction platforms
To successfully use digital construction software for managing change orders in construction projects, companies should start by researching platforms that fit their project needs, budget, and current systems. Once they choose a platform, comprehensive training should be provided to help all stakeholders learn how to use it effectively. After that, customizing the platform to meet specific project requirements—such as setting up automated notifications, creating a centralized document management system, and defining customizable approval workflows—is crucial.
When selecting the right construction management software platform, it’s good practice to keep the following tips in mind:
- Define project requirements: Clearly outline the specific needs and objectives of your construction project, including scope, size, complexity, and timeline.
- Assess budget: Determine the budget available for investing in construction management software, considering both upfront costs and long-term expenses such as subscription fees and maintenance.
- Evaluate scalability: Choose a software platform that can scale with your project as it grows, accommodating additional users, features, and functionalities as needed.
- Consider integration capabilities: Ensure that the software can seamlessly integrate with other tools and systems used in your organization, such as accounting software, scheduling tools, and BIM management software.
- Prioritize user-friendly interface: Select a platform with an intuitive and user-friendly interface that can be easily adopted by all team members, regardless of their technical proficiency.
- Look for mobile accessibility: Opt for software that offers mobile accessibility, allowing team members to access project information and collaborate on-the-go using smartphones or tablets.
- Review customization options: Choose a software platform that offers customization options to tailor the system to your project requirements and team preferences, including customizable workflows and dashboards.
- Consider customer support: Evaluate the level of customer support provided by the software vendor, including training, technical support, and ongoing assistance to ensure smooth implementation and usage.
- Take advantage of free trials: Take advantage of free trials or demo versions offered by software vendors to test the platform’s features, usability, and compatibility with your project before making a final decision. You can start a free 30-day trial of PlanRadar’s construction management software now – find out more!
Encouraging team adoption: Tips and tricks for successful change order software implementation
After successfully implementing new software, teams may find it challenging to begin integrating the tool into their change order management processes. This can be even more challenging for hybrid or remote teams.
Some practical tips for building site users to ensure successful utilization for change order management could include:
- Provide comprehensive training: Offer thorough training sessions specifically tailored to the needs and responsibilities of building site users regarding change order management.
- Create user guides: Develop user-friendly guides or manuals detailing step-by-step instructions on how to navigate the change order management system, complete with screenshots and illustrations.
- Establish clear procedures: Clearly outline the procedures for submitting, reviewing, and approving change orders on the construction site, ensuring that all site users understand their roles and responsibilities.
- Utilize mobile applications: Implement mobile applications or software that allow site users to access and manage change orders directly from their smartphones or tablets, providing flexibility and convenience.
- Encourage regular updates: Remind site users to update the status of change orders promptly and communicate any changes or updates to relevant stakeholders in a timely manner.
- Offer ongoing support: Provide continuous support and assistance to site users, including access to help desks, online forums, and dedicated support personnel, to address any questions or issues that may arise.
Driving construction change order efficiency: Future trends and opportunities
The construction industry is undergoing a significant transformation as digital tools and increased digitization become more integrated into building sites. The adoption of digital construction software is at the forefront of this change, offering a robust solution for managing change orders—a critical aspect of any construction project. As these technologies continue to advance, they promise to streamline operations, reduce errors, and enhance communication among all stakeholders, leading to more successful builds.
As construction teams become more adept at using these tools, the entire industry stands to gain from improved standards, enhanced safety protocols, and greater sustainability. The shift towards digitization is not merely an upgrade of tools but a fundamental change in how construction projects are conceptualized, executed, and delivered.
Get started with PlanRadar’s construction management software – find out more below.
