The non-linear effect of project change orders : a South African case.

Abstract

The research focused using System Dynamics to model and simulate an engineering project with the main aim of understanding: - Why change orders are notorious for negatively impacting on project execution; - The root cause(s) of the behavior in order to find ways to better manage change orders in future projects; The research was carried out at a leading KZN-based engineering consultancy using data from a recently completed project as a basis for the model. The research took the following approach and sequence: Introduction: In this section I present the dominant school of thought, the reductionist scientific perspective and its strengths. I then highlight the weakness of the school and present systems thinking as an alternative way of viewing life issues. I then propose system dynamics as one of the better methodologies that can help us understand a dynamic and non-linear system. Literature Survey: In this section I review literature on project management with the primary aim of highlighting that projects, regardless of size, are complex non-linear systems. I then cover literature on system dynamics with the aim of justifying my perspective, that it is suitable for application in the project management context. Research Methodology and Results Analysis: This section presents the methodology I followed in executing the research. The research process started off with extensive data reviewing from a recently completed project. It also covered conversations with the research participants in order to help me fully understand the project that was to be modelled. The data reviewing and interviews culminated in a group model building exercise where a number of “what if” scenarios were explored and discussed with the participants. The final stage of the research was to get the participants to respond to a post-modelling questionnaire. The outcomes from these processes were then used to answer the original research questions and to draw any additional insights. The resultant model can now be used as a learning tool for teaching clients of the unintended consequences that can result from issuing change orders.

Conclusion: I then close off the research by concluding that change orders do have a non-linear impact on project execution and they require careful management. I then suggest that the best way to manage this is by educating all the project participants, especially the client of how their well meaning requests can be detrimental to the project if not well managed. Additionally it was surprising to all participants that for some reason, exploration of change orders that are not approved is rarely ever charged for. This “work for no pay” can negatively impact on the financial situation of the service provider which may have a knock-on effect to other areas of the project. Value: This research eventually revealed itself to be about learning to effectively lead a group modeling exercise and what pitfalls to look out for when creating models. There is great value for people interested in finding progressive and well informed ways for model building and managing change orders in projects. This system dynamics in project management research is grounded on the concepts of the learning organization and systems thinking as the core drivers.