Contracts and projects are subject to changes. Requests for changes can be internal, such as ideas for improvements, and external, such as change requests by a customer to an existing contract or order, a legal requirement, etc. Contract Change Management gives the possibility to capture changes, analyze the impact and do a justification of them before implementing the change. All the implementation of a change is done on the project, sales contract or sub contract, whereas the contract change order is the justification for the change to be done. There can be more than one customer, supplier or sub contractor who will be affected by the proposed change. It is possible to connect contract change orders to each other as Related Sub Orders and in that way each affected contract or project has its own contract change order. The person requesting the change or the responsible person can be informed at regular intervals about the status of the requested change. Optionally, there can be approval connected to any status change of the contract change order. The approval can be set up manually or be based on the change type of the contract change order, or even be based on approval rules that take the financial value of the contract change order into account before setting up the approval automatically.
The stages related to Contract Change Management are:
When a request for change is received from an internal or external part, you can capture all the information on a contract change order for further review. The contract change order is then created in the Preliminary status. It is also possible to classify and prioritize the contract change order.
After the contract change orders have been reviewed you can decide on the orders to continue with and the ones that can be rejected. It is possible to set the contract change orders to Analysis Started or Canceled, or just keep it in Preliminary status.
Contract change orders that have passed the initial review need to be analyzed in terms of impact and the actions required for implementation. The change can have impact related to the financial aspect, scope, schedule and risks etc. There can also be other contracts or projects that are affected by this change which will require related contract change orders to be defined to handle those changes. Contacts, other objects and tasks relevant for the contract change order can also be defined. Such information is captured on the contract change order and the status is changed to Analyzed.
A contract change order generally requires approval before implementation. Internal approval can be done by the use of different steps in an approval routing (this can also be done for any other status change). There might also be a need to get it approved externally e.g. by the customer. If so, the Submittal Approved status is used to indicate that the information on the contract change order is ready to be submitted to an external party. The approval or rejection from the external party can be registered on the contract change order. Change Management allows you the flexibility of adding approval to any status change and to have different approvals based on the financial value of the contract change order as well as not have any approval at all.
When a contract change order has been approved both internally and externally, approved it can be set to the Approved status.
After the contract change order has been approved, and it is ready for implementation, the status can be set to Active. It is time to carry out the work according to the requested change. All implementation of a change is handled on the project, sales contract or sub contract. In order to do so you will be required to update the project plan by adding or updating activities, or to add contract line items and activate new revisions of the contracts etc.
Once the work resulting from the requested change has been incorporated in the project or contract, the contract change order can be set to the Closed status. It is possible to inform the requestor and other parties about the finalized contract change order.