If you currently work at an agency or have worked for an agency in the past, the term scope creep is probably familiar to you. This is never a good term and often strikes fear into the hearts of people that hear it. It is an issue that many agencies deal with.
According to this report from PMI, nearly 50% of projects encounter scope creep, and according to Deltek, nearly 40% of agencies surpass their project budget because of it.
In this article we will address what scope creep is, what causes it, the negative effects from it and most importantly, we’ll provide 7 simple steps to prevent scope creep. Let’s dig in.
WHAT IS SCOPE CREEP
First, a definition; scope creep refers to changes, continuous or uncontrolled growth in a project’s scope, at any point after the project begins.
CAUSES OF SCOPE CREEP
This can be caused by a multitude of factors ranging from the client not understanding the complexity of the project to mismanaged time on the agency’s part. Whether it is the agency’s fault or the clients, the bulk of the issue comes from misalignment of expectations and miscommunication. Here is a list from Instapage showing all of the different potential causes of scope creep:
- Clients don’t understand the importance of their role when creating a brief
- Clients fail to understand the complexity of the scope of the project
- The agency underestimates the complexity of the project
- Lack of client agreement
- Unexpected issues arise on the client’s side, causing changes in the project to be made
- The project scope isn’t defined accurately
- Mismanaged communication between team members and the client
- Lack of involvement with the client
- Feedback on milestones/deliverables is delayed
- Mismanaged time on the agency’s part
- Lack of prioritization
- The agency not understanding why new requests/changes are being made
However it happens, the negative effects of scope creep can be extremely detrimental to an organization. There are two major effects we should consider.
EFFECTS OF SCOPE CREEP
1. Margin Erosion
The first, and probably most obvious, effect is margin erosion. When a project kicks off, there are expectations (sometimes unspoken) around how much the work will cost the client and how much the work will cost the agency internally. This is how the profitability of the project is determined. As more and more work is requested of the agency, the cost goes up. However, when this happens, for many reasons, the agency will not increase the price to the client. This can greatly reduce the margin on the project and, in some cases, actually result in a negative return for the agency.
2. Employee Burnout
The second issue that comes from scope creep is the effect it has on employees. When more work needs to get done and the client is not asked to pay for more billable hours, one of two things needs to happen. One, the team member on the project will need to accomplish more work in the same amount of time that was originally allotted, which normally results in a higher level of stress for the employee and a lower level of quality in the work, or two, the employee will need to work longer hours outside of the normal billable hours. Both of these outcomes lead to a high level of stress among employees, burnout and high turnover. Agencies are infamous for asking for more and more from their employees until it becomes too much and they end up losing top talent.
Now that we know what scope creep is and how it can affect your organization, let’s look at some ways to avoid and prevent it.
STEPS TO PREVENT SCOPE CREEP
1. Project Scope
As we mentioned earlier, most of the issue stems from miscommunication and misalignment of expectations between the agency and the client. The best way to combat this is to develop a Project Scope Document.
In the Project Scope Document you should be able to:
- Clearly Defined Expectations - It should list everything detailed in the planning stage, including a clear brief, deliverables, milestones, costs, deadlines, resources, and tasks:
- Both parties should sign an “Agency Contract” agreeing to the Project Scope Document
- Identify what the agency wants to accomplish from a business perspective. This will help define which alterations will help them in achieving their goal and which are superfluous.(i.e. I want a new website vs. I want to increase sales by 30% by having a user-friendly website)
- Metrics to be included
- Specific goals
- Deliverables to be completed
- Milestones and deadlines for each deliverable
- Project costs
- Team members undertaking each task
- External resources required
2. Premium Rate
Another tactic for discouraging scope creep is to develop a Premium Rate for project alterations or additions. It is important to be upfront with the client about this and explain what it is and why you do it. If the client has a clear understanding of this pay scale, they will be more inclined to be engaged and set clear expectations from the beginning to prevent any undue changes down the road.
3. Account Manager Training
Sometimes the employees on the front lines notice that scope creep is happening but don’t feel empowered to do anything about it. Either they fear upsetting the customer, are not sure how to address it, or don’t think it is a big deal. The best way to prevent this is to host training for your Account Managers that specifically addresses scope creep with clients and what they can do to prevent it. Teaching them how to have conversations with the client about providing an estimate for revisions that the client is asking for or even feeling comfortable asking a senior manager to join them on a call where additional asks from the client are likely.
4. Manage Expectations
This goes hand-in-hand with the Project Scope. Be sure to ask a lot of questions upfront so that both parties have a clear understanding of what the client is trying to achieve and what the agency is able to provide. During this time, it is important to identify and call out any potential obstacles that may arise during the project and what is needed to overcome them. Finally, it is vital to outline what is expected from the client during the project. The project may be dragged out because the agency is waiting on the client to complete a task and the client is unaware of the importance of it.
5. Manage Deadlines
Deadlines are critical in projects to ensure things are moving along at the rate they are supposed to be. Not meeting deliverables or certain milestones in time will cause stress and increase the budget for a project. This is where technology can help greatly. There are great project management software tools available like Basecamp, Trello, or Monday (and many more). Find one that works for your organization and utilize it to stay on track.
6. Full Transparency with the Client
Keeping the client engaged and included on the progress of the project will not only make them feel better, but will help them take ownership of the project as well. When progress is constantly available, it makes the client less likely to add extra elements that may throw off the trajectory of the project or cause deadlines to be missed. You can keep open transparency in a couple of ways. One way is to develop a customer portal that is shared by your team and the client. Project updates, metrics and milestones can all be tracked here so both sides are aware of the progress being made and expectations. Another, simpler way is to hold regular meetings with the client. Use the time to review progress on the project. If you are already doing this and scope creep is still occurring because the client is taking this time to add to the project, try increasing the frequency of meetings. Some agencies have opted for daily check in calls.
7. The Point System
The agency PR 20/20, based out of Cleveland, OH developed a proprietary point pricing model that decouples the time it takes to create something from the value of that thing. They have developed a fixed value pricing for any service that they offer. For example, instead of charging per billable hour, where one employee may take 2 hours to write a blog post and another may take 5 hours, they have established that a blog post is worth 3 points. In this way, the client is paying for the value of your services, not the time. By distancing time and value, you remove some of the push backs that clients have. They may see that it takes 5 hours to complete a blog post and think that that is completely ridiculous. With the point system, both sides agree on the value of a service.
Scope creep is very real and something that a lot of agencies experience. Have you experienced scope creep before? Tell us about it in the comments below!
