7 Ways to Strategically Manage Change Orders in Procurement

Last on the Procurement Leaders Playbook , we discussed 5 strategic ways to plan for power in procurement .??

This week, we’re exploring a more practical element of procurement processes—managing change orders.

Change orders in procurement are modifications to an existing contract that alter the original terms and conditions, such as the scope of work, pricing, or delivery schedules.?

Although these changes are inevitable in today’s dynamics, managing them efficiently is a little tricky.?

Here are 7 strategic ways to manage change orders effectively:

1. Establish Clear Change Order Procedures

First things first, you need a rock-solid process. Develop and document a standardized procedure for handling change orders, which should include how change requests are submitted, reviewed, approved, and communicated to all stakeholders.?

Clear procedures ensure consistency and transparency, making it easier for everyone involved to understand their roles and responsibilities.

Tip: Create a flowchart of the change order process and share it with your team. Visual aids can significantly enhance understanding and adherence to the procedure.

2. Use Standardized Change Order Forms

Next up, implement standardized change order forms that capture all necessary details:

• Description of the change
• Reason for the change
• Cost implications
• Impact on the project timeline

Tip: Digital forms can streamline this process. Use software that allows for easy form creation, submission, and tracking.

3. Implement a Change Control Board (CCB)

Form a Change Control Board (CCB) consisting of key stakeholders, including representatives from procurement, project management, finance, and relevant departments.?

The CCB reviews and approves all significant change orders, ensuring that changes are evaluated from multiple perspectives before being implemented.

Tip: Schedule regular CCB meetings to review pending change orders. This keeps the process moving and prevents bottlenecks.

4. Take Advantage of Technology

Incorporate technology into your change order management process. Utilize procurement software and project management tools that include change order management functionalities.?

These tools can automate workflows, track change orders, and provide real-time visibility into the status of change requests, helping to streamline the process and reduce manual errors.

Tip: Look for tools that integrate with your existing systems to ensure seamless data flow and avoid duplication of efforts.

5. Communicate Effectively with Stakeholders

Communication is key. Ensure that all stakeholders, including suppliers, are kept in the loop about change orders.?

This helps to avoid misunderstandings and ensures that everyone is on the same page.

Tip: Use a centralized communication platform to manage updates and feedback. Tools like Slack or Microsoft Teams can be very effective for this purpose.

6. Monitor and Evaluate Impact

Once a change order is approved and implemented, it’s crucial to monitor its impact on the project.?

Track any deviations in cost, schedule, or performance. This will help you understand the true cost of the change and make better decisions in the future.

Tip: Conduct post-implementation reviews to evaluate the impact of change orders. This can provide valuable insights for managing future changes.

7. Seek Strategic and Professional Procurement Training

Seeking strategic and professional procurement training can take your skills to the next level.?

Training programs like Certified International Procurement Manager (CIPM) can provide you with advanced knowledge and practical skills not just to manage change orders, but procurement management as a whole.?

Become a Certified Procurement Expert!?

Implement these 7 strategies and you’ll seamlessly keep your projects on track, within budget, and maintain strong relationships with your suppliers.

Interested in becoming a Certified Procurement Expert where you learn the tricks to become the best of the best? Check out our upcoming certification—Certified International Procurement Manager (CIPM)!?

Hurry Up: The upcoming session starts on 31st August and only has a limited number of seats (20) up for grabs. Register Your Interest Now! ?

P.S: To be eligible to enrol into the CIPM program, you will need to have 10+ years of experience in management/leadership.?

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