Managing Out-of-Scope Work: How to Define Your Project Scope

Introduction

Out of scope work, or scope creep, is not so much an event as a process. It happens when a project grows beyond its initial goals and its tasks exceed its goals. During the planning stage, an allowance for scope creep in a contingency heading can be beneficial. However, if left unimagined, unplanned, and unmanaged, scope creep can culminate in costly mistakes. It can jeopardise the entire project and its schedule. It can destabilise the budget and compromise quality. It can damage professional relationships and harm an organisation’s reputation.

What is “Out of Scope” or “Scope Creep”?

Scope creep is when the original project plan begins to stretch beyond its agreed boundaries without authorisation and beyond the agreed-upon contingency measures. This tends to send both the budget and schedule spiralling out of control. The term “out of scope” can also refer to inflation caused by features that were not part of the project’s original scope.

Identifying the cause isn’t straightforward. It can be the result of failing to align the contingency with a supply chain forecast or fix the price of materials, resources, overtime, or the personnel required to complete the project. This can be attributed to sheer incompetence. It can come down to failure to define the scope requirements or too many “decision-makers”. Unchallenged client requests can cause scope creep. Ill-defined task prioritisation, as well as being too afraid to speak up or contradict a more senior colleague, can be the culprits. What we do know is that omission of any of the project’s elements during the planning phase can have disastrous consequences.

Defining a project’s parameters at the outset is paramount. A risk assessment at the scoping stage could ask what might go wrong with this project and introduce the notion of “allowable scope creep”. Then the project plan will include the project’s intentions and the risks associated with not achieving the intended outcome.

How to Manage Scope Creep Effectively

Any contractual relationship should clearly define the boundaries of the proposed work. The high-profile UK infrastructure project, High Speed 2 (HS2), that kicked off in 2017 is provided as an example of what can go wrong.

The UK’s Parliamentary Committee [Report] (Feb. 2024) has called for answers about the “failure of governance and oversight over spiralling costs following years of warnings”.

But will answers regarding the “cost overruns and delays [that] have been a constant problem throughout the whole HS2 project” be forthcoming? Will the committee be able to uncover why “the estimated cost of the completion of Phase 1 [has an] inflation range as high as £67bn”?

As the same report states, “the government has accepted that delivering only Phase 1 will not be value for money, as its total costs significantly outweigh its benefits. […] Poor cost management indicates a failure of governance and oversight at both HS2 Ltd. and DfT.”

After such a damning verdict, you’d hope that the project manager will now be working hard with their team to decide “how these issues will now be brought under acceptable and properly accountable control.”

Cancelling the Northern leg of HS2 is the subject of Peter Kain’s 2013 article for the Institute of Economic Affairs (IEA). It includes some thought-provoking comments on the “dodgy numbers”. Let’s try to identify how scope creep in this or any project, big or small, might be managed more effectively.

• Project discussion phase: Even if the client is the UK Government, identifying and addressing scope creep from the outset would be advantageous. Discussion, candour, and honesty are the central tenets of this phase. The phrase “without fear or favour” could have served to signify impartiality in the tendering and recruitment of the best in their fields. Project planning professionals who are not afraid to manage. A respected team of accountants and budget planners. Supply chain forecasters whose expertise in the field are second to none. Consultants and contractors of high repute, and so on.

• Risk assessment: You envision a risk assessment meeting taking place before the planning stage and continuing throughout the project. You’d imagine a meeting for such a large-scale project would have involved the Transport Minister of the time, some of their advisors, and several civil servants. The lead construction consultants, contractors, cartographers, and experts in railway infrastructure, planning, and logistics would have been present. The lead accountant would have been very useful for identifying and discussing the primary financial risks of this mammoth project. Mitigating the risk is best done from the outset; the main one might have been dampening the chorus of “Yes, Minister” to a more appropriate “We need to consider this more carefully, Minster.”

• Project scope/project planning: Understanding, pinning down, and defining the scope of the project is the key. What is the purpose of the project? For example, would an over-budget railway that only went part of the way to the desired destination be of any use at all to anyone? Most importantly, would it meet with the government’s flagship policy of “levelling up” the North of England? At the scoping stage, you envisage a detailed discussion about the schedule and the budget. The risk of rising costs of materials and wage costs, and the costs of compulsory purchases. Before signing it off, you’d hope that the lead accountant had received all the actual figures and forecasts and carefully reviewed a realistic budget. One that factored in the potential for rising costs over the period of the project.

• Budget and schedule: would form part of the contract, drafted by the best lawyers. Here, the terms of the work (such as agreed fixed costs, contingencies, and fees over the project’s duration) would have included clauses that held the consultants and contractors accountable for delays to the schedule, oversights, overspends on the agreed budget, and so on.

• Managing expectations: Out of scope projects, when they start morphing and turning into unmanaged scope creep, can be like putting a flame to a fireworks warehouse. Could it be that there was too little meaningful management of HS2 beyond “Yes, Minister” for a national project to turn into such a disaster?

Public sector procurement is subject to a legal framework that encourages free and open competition and value for money. Does that make you wonder how this project, which led to the embarrassment that is HS2, ever received approval?

It is becoming clear that the candid and extensive discussions that should have taken place before and during the HS2 project did not occur. However, it’s important to appreciate that unexpected events are inevitable in any project. This is where the initial risk assessment and contingencies deliver dividends. No one wants to completely close the door on scope creep. It has the potential be constructive during the planning phase and even during the project itself, provided it is managed effectively. But failure to control the project and manage the team, schedule, and budget will inevitably lead to spiralling costs, unmet expectations, and organisational embarrassment. In this case, your train ticket entitles you to a shuttle service from Old Oak Common (on the outskirts of London) to Birmingham rather than to a seat on a high-speed railway from Central London to Manchester.

Sourcing the right expertise, meticulous planning, and smart technology can help avoid this sort of disaster. A well-scoped project will ensure that everything aligns with its goal, allowing it to stay on track and achieve its goals. By staying up to date on the project scope, project managers can refine processes and harness planning as needed, resulting in improved efficiency and better identification of work that is moving out of scope.

Defining Project Scope

1. Begin by defining your project objectives, identifying the risks associated with the project’s implementation, and addressing any aspects that do not align with the project’s goal.
2. Create a resource plan that outlines the elements already available, those that require sourcing, and the intended use of each resource. For example, for a project such as HS2 to succeed, requirements include: a qualified team of bookkeepers, accountants, and tax professionals. Experts in procurement and logistics and professional supply chain forecasters and negotiators in this regard. A decent firm of lawyers to write and oversee the contract(s), engagement agreements, scope management plan, engagement letters, and proposals.
3. What other project requirements are there? Define the boundaries of your project, which may initially encompass everything considered “desirable” by everyone but ultimately be narrowed down to what’s feasible and within the project’s scope.
4. Begin drafting the project scope statement, either as a bulleted list or in paragraphs with headings. It should state the project’s objectives and explain what is going to be done, how it will be done, and what will not be done, and why. This will inform the budget, schedule, contract, letters of engagement, and all the other documents requiring signatures.

The questions to answer as part of this might include:

• What are the project’s objectives? What is its goal?
• What are the risks and restrictions?
• What is the ideal due date for completion? What contingencies can we allow to the schedule?
• What is the budget? Who will be managing the budget?
• What contingencies should there be in the budget?
• How many workers are required to complete the task? How much overtime might be needed? What are the risks?
• How many internal team members are required to manage these works; who will working with the contractor’s oversight team? Who will be working on the construction consultant’s team.
• What resources are already available, and what requires procurement?
• What is out of scope?

Identifying out of scope work is vital for successful project management and delivering the project goal 100% on time and within budget. Therefore, reducing unexpected expenses associated with the rising costs of materials and resources, land, extra personnel, or overtime is essential to keeping within the budget and schedule and successful completion of the project.

Tools & Technologies

Are you aware that there are technologies that can help with project scope planning, fine-tuning, and close monitoring? A tool such as Outbooks Proposal can increase efficiency and mitigate the risk of unmanaged scope creep.

In the twenty-first-century world of project management, no project manager should worry about not having a tech tool at hand to help them manage effectively. Since you will be ultimately responsible for managing the complexities of project scoping and the potential pitfalls of unplanned out of scope work, you need all the help that modern technologies can offer.

The Outbooks Proposal tool streamlines and automates the proposal management process. It has user-friendly features, customisable templates, and seamless integration with accounting software. This tool simplifies the creation and delivery of professional proposals. It keeps project managers abreast of all aspects of their project before, during, and after successful closure and completion.