How to Improve Your Construction Change Order Process

“Things are falling through the cracks…”
“We can’t communicate with staff in the field…”
“We’re tripping over our feet trying to keep up with all the paperwork…”

These pain points were cited by three prospective construction software buyers who contacted Software Advice in 2016 for help selecting the right solution to support their business.

What each buyer had in common is that they were looking for a project management system to increase visibility and improve the tracking of change orders. They had reached a point where manual methods and non-specialized tools no longer supported their processes.

Sound familiar? If you too are struggling to stay on top of the changes that inevitably occur during a construction project using spreadsheets or your accounting software, you’ve likely experienced similar frustrations. And you’re not alone.

Of the small and midsize business (SMB) construction firms sampled for our 2016 buyer report, only 26 percent are already using construction project tracking software. The vast majority (74 percent) are looking to purchase software for the first time.

construction industry trends

 

In this article, we’ll dig into how software can improve project tracking and outline a few highly rated systems on Software Advice. If you’re also struggling to manage your change order process efficiently, one of these tools may be the right fit for you.

The Construction Change Order Process

A change order is an amendment to a construction project contract, signed and mutually agreed upon by each relevant party, e.g., the project owner, contractor and architect. The contract outlines a project’s scope, budget and timeline and the change order acts as a directive altering one or more of these criteria.

Prior to execution, the typical change order process looks something like this:

Change Order Process
change order process
Contract is signed: Scope, budget, timeline for construction project are outlined and agreed upon.

Issue is raised: The primary causes of changes to construction projects include:

  • Design errors, alterations or omissions
  • Change in field conditions and/or materials
  • Procurement issues
  • Regulatory changes
  • Owner-initiated changes

Change is proposed: A solution designed to manage or counter the issue is proposed and sent out to relevant parties. At this stage, a request for an estimate is sent to subcontractors to outline the change impact on price, budget or timeline for the relevant work. The owner, contractor and architect either agree, counter or void proposed change due to estimate.

Change is agreed upon: All relevant parties agree on the proposed change and documents are drafted to amend the original contract.

Contract is amended:
The change order is signed and contract amended. The contractor and subcontractors are responsible for alerting all workers to the finalized changes to the contract.

Benefits of Automating Your Construction Change Order Process

Project changes are common and nearly inevitable. By standardizing your process and workflows for managing issues, and communicating change orders to your staff, you can save money and time.

Project tracking software can help streamline this process in many ways, including:

project tracking software streamlines
The following examples demonstrate how automating your construction change order process and standardizing these workflows can benefit your business.

Use Case: Design Error/Omission

Issue: Request for information (RFI) from contractor to architect reveals a design error.

Without project tracking software: It’s possible the error isn’t noticed until the build is in progress. At this point, the material costs stemming from the design error (either from materials ordered in excess or the additional material required to fix the issue) may exceed the approved budget.

Although the customer is ultimately responsible for the full cost of the build—including issues resulting from design—errors that are not caught early can lead to tense relations and negative customer reviews.

With project tracking software: Architects and design teams can improve the accuracy of plans by using estimating and takeoff software. These digital measurements often pull costs for labor and materials from a centralized database. This information can then be imported into the project planning and tracking tools.

When costs near or exceed the planned budget, all parties are alerted and appropriate change orders can be issued. Additionally, architects and contractors that use software can provide customers with quotes based on past projects and can provide real examples of issues that arose on similar jobs. These real-life examples can be a useful jumping off point when building a contingency budget.

Use Case: Owner-Initiated Change

Issue: Kitchen remodel was designed with granite, but during an on-site walk-through prior to installation, the customer has changed their mind and says they want quartz countertops instead. The customer says they are fine with the difference in cost and the contractor orders the quartz right away to ensure it arrives on time.

The new material arrives and the build team completes the remodel. However, when the customer sees the final cost for installing quartz countertops, they’re unhappy and don’t want to pay the difference.

Without project tracking software: Even though the owner requested the material change and gave a verbal agreement to the increase in cost, if the appropriate change order wasn’t issued prior to ordering and installing the new material, the contractor may be held responsible for the difference in cost. This is because the quartz material was outside the scope of the original contract, which outlined granite as the approved countertop material.

With project tracking software: If the contractor was using a project management system with a mobile application, they could have initiated the change order on site and had the customer sign for the change in material and increase in price on the spot.

Highly Rated Project Tracking Systems

There are numerous project management systems on the market today that can automate and improve your project tracking process. The following are examples of highly-rated systems on Software Advice:

buildertrend logo

Buildertrend is a cloud-based construction management software designed for home builders and remodelers. Main product capabilities include:

  • Presale bid requests, estimates, leads/customer relationship management (CRM) and proposals.
    • Project scheduling, document management, daily logs and change orders.
      • Financial tools such as purchase orders, budgeting and payments.
        • Customer management including a login portal, communication and a mobile app.

        Creating a change order in Buildertrend
         

        Buildertrend has over 700 reviews on Software Advice. Here’s what a few reviewers say about the product:

        Positive: “Learning new software is always a daunting task, but I am happy to report that Buildertrend is the exception to the rule. Not only is the format very user-friendly, the support staff is extremely well-versed, patient and eager to answer any and all questions posed.” – Andrea from Davila Homes Construction

        Negative: “Setup is a huge hassle. Took about a week to get our vendors set up in the system, we were promised our website leads would automatically sync to the site, and now we’re learning it’s not so simple (which is terribly unfortunate as this was our biggest must-have when looking for a CRM), and QuickBooks must be the cloud-based version in order to sync as implied on the site.” – Anna from Forest Homes

        Do you use Buildtrend? Write a review here.

        procore logo

        Procore is a cloud-based construction management system designed for general contractors across segments and specialities. Product capabilities include:

        • Project scheduling and tracking, daily log, meeting minutes and change management.
          • Document and drawing management, RFIs, submittals and transmittals.
            • Financial tools including bidding, budgeting and forecasting and cost management
              • Reporting, dashboard and inspections.

              Change orders in Procore
               

              Procore has over 700 reviews across Software Advice, Capterra and GetApp. Here’s what a few of those reviewers have to say about the system:

              Positive: “It’s easy to use (even for our not so technically minded staff) and the information can be accessed virtually anywhere with office staff entering information via the web and site managers through the iPad app. One of the biggest features is the control of drawings and document management, this ensures our site managers always have the latest information, avoids any confusion and streamlines any markups and RFI’s.” – Justin from MKM Constructions

              Negative: “The offline use. It’s very difficult to use sometimes when you don’t have internet access. For example, when reviewing punch list items, you can’t close them unless you are online.” – Garrett from Comstock Construction, Inc.

              Do you use Procore? Write a review here.

              coconstruct logo

              CoConstruct is a cloud-based construction management software designed for homebuilders and remodelers. Key capabilities include:

              • Project scheduling and tracking, job log, time clock and change orders.
                • Financial tools such as bidding, estimates, proposals and budgeting and forecasting.
                  • CRM functionality such as lead and contact tracking, client and subcontract messaging.

                  Project overview screen showing financials and change order costs in CoConstruct
                   

                  CoConstruct has over 500 reviews on Software Advice. Here’s what a few of those reviewers say about the product:

                  Positive: “The support staff is great and has been more than willing to eagerly answer all of our questions during implementation. CoCamp is very helpful and motivating. The team at this company has set up a great model for success for themselves and their clients by staying involved in the learning process until they are sure you are understanding and USING their software. It has helped our principal take control of the jobs with better communication with our subs and our clients all in one place.” – Lindsay from Beach Hensley Homes

                  Negative: “I wish that the calendar had a way to manage appointments and appointment reminders in addition to the project calendar because so often the tasks are the same such as site meetings or presentation of a project to the client.” – Andy from Builtwright Construction Co

                  Do you use Co-construct? Write a review here.

                  Next Steps

                  If you’d like to learn more about project tracking tools that can help construction companies manage change orders, here are a few ways to learn which is the right fit for you:

                  Head over to our buyer’s guide. Once there, you can compare project tracking products, read reviews and see how your peers have evaluated each product for qualities such as customer support and ease of use.

                  Call our advisors at (855) 998-8505 for a FREE consultation. Our dedicated team of construction software experts will carefully review your business and industry requirements and recommend a shortlist of products that meet your needs.

                  Take our online evaluation. Don’t feel like talking on the phone? Take our online construction software questionnaire for a similar evaluation of your needs. After a short assessment, we can provide you with a FREE custom price quote.

                  Email me at eileen@softwareadvice.com. I’m available to answer any questions you might have and can get you set up with a price quote or demo if you’re ready to start evaluating systems.

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