Construction is a constantly changing field, making effective change strategies an important part of keeping your business profitable. From subfloor damage to unsuspected renovations, staying on top of changes is vital for success and profitability.
But how should you handle these issues as they arise? In this post, our team at SmartPM will answer questions about project scope, stakeholder expectations, and more – so you can better understand construction change management and how it impacts your bottom line.
What is Construction Project Change Management?
Construction change management is the coordinated effort to identify, approve, and implement any modifications to a project’s original plan. These changes can arise from design flaws, unforeseen site conditions, evolving client needs, or regulatory updates. When managed properly, they help maintain project quality, keep the budget under control, and preserve stakeholder relationships.
Within this broader framework, construction project change management focuses specifically on adjustments affecting a single job. It oversees the lifecycle of a project from the moment a proposed change is recognized, through approval and documentation, to final execution on-site.
A vital component of construction project change management is the change order. Change orders occur when something is changed in the construction process that impacts the scope of work being accomplished. Types of change orders can include:
- Lump Sum Change Orders: When a specific change is made, and the cost can be easily quantified, a lump sum change order is created. This typically can increase or decrease the total project cost.
- Zero Cost Change Orders: This type of change request doesn’t change the project’s cost, only a specific aspect of it. For example, moving a doorway in a wall that has not been installed doesn’t impact the cost.
- Time and Material Change Orders: When the full extent of the cost can’t be calculated, a time and material change is used to make sure the repairs can be completed regardless of cost.
- Unitary Cost Change Orders: This change includes work that is counted by a specific unit, such as cubic yards of concrete or squares of roof decking.
Even minor changes can carry a major financial impact. According to a study by Navigant Construction, the median construction change order is about 4.03% of the entire project. 4% may seem small, but on a multi-million dollar project, change orders can protect your business against these issues. However, if not done properly, they might just cost you your relationship with the client.
What is Construction Company Change Management?
Construction company change management is about implementing company-wide changes that impact general contractors, construction teams, and project stakeholders. Unlike project change management, which focuses on adjusting project timelines, team roles, and budgets on a single job, company-level change is driven by leadership and affects policies, workflows, and technology across multiple projects.
The key difference? Project change management is tactical—making adjustments to keep a single job on track. Company change management is strategic—shaping how all projects operate. Both require clear communication and accountability to avoid disruptions.
Why is Construction Change Management Beneficial for Project Outcomes?
Effective change management in construction projects helps ensure that changes – whether at the company or project level – are handled smoothly, minimizing disruptions to workflows and maintaining project efficiency. By establishing a structured approach to managing site conditions, stakeholder expectations, and decision-making processes, construction firms can greatly reduce uncertainty and improve overall project success.
Without a proper change management strategy, unexpected changes in materials, labor, or regulations can cause major setbacks, leading to project delays, cost overruns, and miscommunications among project teams, contractors, and stakeholders. A well-defined process ensures that all changes are evaluated, approved, and implemented effectively, leading to better project outcomes.
Examples:
Minimize Project Delays and Cost Overruns
Having a proactive change process helps avoid unexpected delays by addressing potential site condition challenges, material shortages, or design modifications before they become major obstacles. This keeps the project timeline on track, preventing unnecessary financial expenditures.
Improve Transparency
A structured change management process ensures that all stakeholders, including general contractors, project managers, and site teams, are aligned. Clear communication prevents misunderstandings and ensures that everyone is aware of the impact of changes.
Better Monitoring and Evaluating
By tracking and documenting changes, construction firms can analyze patterns, assess their impact, and improve future decision-making. This leads to better risk management and more informed planning for upcoming and current projects.
Mitigate Risks and Disruptions
Changes in weather conditions, subcontractor availability, or regulatory requirements can disrupt a project. A strong change management framework helps identify potential risks early and implement contingency plans to minimize disruptions on-site.
5 Types of Construction Change Management
Construction projects are never static. Site conditions shift, workflows evolve, and new demands emerge in real time. Some changes are planned, others catch teams off guard—but all potential changes require a structured approach to keep projects on track and avoid costly rework. Understanding the different types of change helps teams improve adaptability, avoid additional work, and minimize risk.
Examples:
Organizational Change
Company-wide shifts that impact workflows, policies, or technology adoption—like rolling out a new construction management system or restructuring teams for efficiency.
Personnel Change
Adjustments to team members, general contractors, or subcontractors due to resignations, role reassignments, or the need for additional work. Managing these transitions smoothly prevents project slowdowns.
Unexpected Change
Unplanned changes caused by weather conditions, unforeseen site conditions, or supply chain disruptions. A proactive approach helps teams respond in real time while keeping the project on track.
Remedial Change
Corrections made to address design flaws, quality issues, or safety concerns. These changes often involve rework to ensure compliance with project requirements and regulatory standards.
Transformational Change
Major shifts in how a company or project operates, such as adopting new construction technologies, sustainability initiatives, or lean building methods. These changes often improve long-term efficiency and competitiveness.
What Causes Changes in a Construction Project?
- Schedule Delays: From bad weather to poor coordination between subcontractors, project schedule delays can have serious consequences that are beyond your control. Using schedule analytics, like SmartPM, make it easier to analyze schedule-based change risk.
- Project overruns: From sudden market changes to shifts in supply chain prices, project overruns sometimes grow beyond your expectations and buffer. Successful change management can protect your bottom line from these issues.
- Contract errors and issues: Let’s say you accidentally specified the wrong completion date or material quantity in your contract. Without a change order, you may be held to these difficult requirements.
- Regulatory changes: When a regulation changes, it can have a sudden impact on a project already underway. This requires a change order so that the completed project is in compliance with the change.
- Labor turnover: The labor market is always difficult in construction, and labor shortages make it even worse. A change order allows you to adapt to these unexpected changes so that the project continues.
- Internal restructuring: Whether it’s a change with whom you’re working with on the client end or a sudden change in project management due to mismanagement, internal restructuring can have a strong impact on the project.
Change Management Framework
Once you recognize that a change needs to take place on a project, these are some steps you can follow to create and manage that change as part of the process.
- Identify: Noticing that a change must occur is the first step, such as roof decking in poor condition.
- Assess: How extensive is the issue? Take time to determine the extent of the issue so that you can go to the client with a solid solution.
- Approve: Find a solid solution that will benefit the client without raising costs more than necessary.
- Formalize: Create a change order for the client to approve, outlining the problem and solution.
- Execute: See to it that the change order is effectively carried out on the job site, then continue the project.
How Can Construction Companies Improve Change Management for Construction Projects?
Managing change in construction means not always reacting when issues arise —it’s about having structured methodologies to evaluate, communicate, and implement proposed changes without disrupting the project. Mismanaged changes lead to delays, budget overruns, and frustrated stakeholders. A successful change management approach, backed by the right tools and methodologies, keeps projects moving and teams aligned.
Examples:
Communicate with Clients and Contractors
Open, consistent communication with project stakeholders—including owners, general contractors, subcontractors, and suppliers—ensures that everyone understands why changes are necessary and what they entail. Regular updates help prevent misunderstandings and scheduling conflicts, minimizing delays and protecting relationships.
Invest in the Right Tools
Implementing new construction technology can boost efficiency, but you must also track its effectiveness. Tools like SmartPM give you a clear change control mechanism, providing you with a view of how changes affect the project schedule and costs. This real-time data can help you decide whether to accelerate, delay, or alter a proposed change.
Furthermore, by analyzing how past changes impacted timelines, teams can make more informed decisions that align with both the owner’s and contractor’s best interests.
“Changes are believed to be the biggest driver of overruns by many, but that’s not always the whole story. The real challenge is quantifying indirect impacts like added time or inefficiencies. By using the schedule to analyze change data, contractors can evaluate the true cost of accelerating work versus extending deadlines—leading to solutions that benefit all parties.” – Mike
Utilize Templates (and Historical Data)
Standardized change order templates and workflows ensure that all proposed changes are documented, reviewed, and approved with minimal back-and-forth. When you combine this structure with a schedule data warehouse, you gain access to historical insights on how similar changes were handled—shedding light on potential risks and typical cost impacts.
Evaluate the Process Regularly
Ongoing assessment of change management methodologies helps identify inefficiencies and improve future project execution. Using data-driven insights allows teams to refine their approach for better results.
6 Best Practices for Construction Change Management
To stay on top of change management in the construction industry, there are six best practices to keep in mind. These follow the six phases of the project lifecycle:
- Business Planning Phase: The business begins to assess the project’s timeline, including its needs, budget, and scope.
- Project Planning Phase: In the project planning phase, agreements should be drawn up to cover scope, project budget, and time so everyone understands these factors.
- Project Scope Definition Phase: Check that the further details of the scope of work still meets the project and business needs, and ensure experienced, knowledgeable personnel are involved.
- Detailed Design Phase: This is where most changes take place, and benchmarks should be in place. Make sure everyone understands the construction change management process.
- Construction Phase: The owner should understand that the scope and benchmarks will be frozen during this time and that changes require a change order and may impact the budget and schedule.
- Startup Phase: Confirm that turnover responsibilities are understood and that the client is aware of market changes that may require scope changes.
Construction change management is a difficult process but can be managed by handling potential issues as they arise. As a top cause of changes in construction, scheduling issues are especially problematic but can be handled by identifying risk through analytics.
What Makes Managing Change in Construction Challenging?
Change is inevitable in the construction industry, but managing it effectively can be difficult. Whether due to design errors, budget constraints, or advancements in technology, implementing change requires careful coordination across project teams. Without a structured approach, change can lead to delays, increased costs, and resistance from stakeholders.
Examples:
Resistance to Change
Many construction professionals are accustomed to traditional workflows and may be hesitant to adopt new processes, technologies, or change order management systems. Overcoming resistance requires strong leadership and clear communication about the benefits of change.
Decreased Productivity and Morale
When project changes (or company for that matter) are not well-managed, they can disrupt project teams’ workflows, leading to confusion, inefficiencies, and frustration. If workers are constantly adjusting to new procedures without proper guidance, morale and productivity can decline.
Training and Communication Issues
Implementing change often requires training on new methodologies, tools, and workflows. Without clear communication, misunderstandings arise, leading to mistakes, delays, and misalignment across project stakeholders.
Conclusion
Change is inevitable in construction, but it doesn’t have to be a liability. By using data-driven tools like SmartPM, you can measure the true impact of changes—whether it’s a design tweak, a schedule delay, or a budget adjustment—and respond strategically. This level of insight helps safeguard both your bottom line and your relationships with clients and stakeholders.
If you’re looking to streamline your change management process, SmartPM is designed to give you clarity, confidence, and control. Get in touch today to see how SmartPM can transform the way your projects adapt to change.
