Effective change order management for smart home professionals

Setting expectations from the start

Scope changes invariably lead to additional work, so integrators need to be upfront about this from the start. During the sales process, you should outline a clear framework for a change order request. This should include:

• Pricing of different options
• Timescales for the approval process
• Potential disruptions to the project schedule.

This will help to cover you in the event of an indecisive client. The original scope of work should have clear, itemised deliverables, costs and timelines. Your process for managing change orders should state exactly how these will be affected should the client change their mind.

It’s important to set expectations so that your customer is happy with costs and progress. Likewise, it’s beneficial for the whole project team, including project owners, who can communicate with team members, subcontractors and other stakeholders.

Tracking, budgeting and billing for change orders

Tracking change orders is essential for preventing lost revenue and the dreaded ‘scope creep’ – unforeseen amendments outside of the original contract.

You might not always charge for every change outside of the project scope. You might have a good working relationship with the client or the change could be negligible to your profit margins. However, construction change orders must still be documented, to protect yourself in future and to show care and diligence. Consider a Contract Administrator to streamline the tracking process.

Next up, think about the financial implications of change order work. You should track and bill for requested changes in real time so that the client is always aware, and so that the costs are totally accurate. It’s best to implement a “bill early, bill often” approach. This keeps customers informed throughout, rather than an unexpected lump sum for new work at the end of the construction process.

Finally, don’t forget to bill for administrative time and project management. Even if you have a change order template, these updates will affect the timelines of the overall project. Tracking project progress is time-consuming, but worth it. For example, there may be RFIs (requests for information), and appropriate documentation can reduce the risk of disputes.

Value your time for all project changes, from material costs to paperwork, and you won’t compromise profitability.

Turning change orders into a profit opportunity

Depending on the types of change requested, there could be fantastic upselling opportunities. For example, the original project may be using an older software version or could be limited to just one piece of home technology.

If your client has a change request, educate them on the benefits of upgrading. They might request additional outside lighting, for instance. Within this, you could recommend motion sensors for security. Common reasons for changes to construction projects include:

• Security
• Tech upgrades
• Convenience (like handsfree home devices).

This is your opportunity to price changes at the same or higher margins than the original estimate. Again, a well-structured change order proposal process will help your client understand project costs, and the advantages of choosing this new tech.

Long-term, you can analyse previous projects to forecast for future ones. For example, the lifecycle of some tech is shorter than others, so you can look at trends to see what’s most profitable. This may affect your upselling in future, or you may even add a clause in your construction contract for further updates.