<img height="1" width="1" src="https://www.facebook.com/tr?id=260954267578739&amp;ev=PageView &amp;noscript=1">

Why Managing Scope in a Project Plan Affects Your Profitability

By Anthony Taylor - May 28, 2013

Have you ever heard of scope creep?

Every time I hear the word scope creep I picture this big scary monster that sucks away time and money from projects.

Scope creep is scary, and if you aren't prepared to deal with it you could lose a lot of time and money.

Where does scope creep come from? Let's start from the beginning by first defining a project. A project is a one time occurrence that has a specific goal, budget, and start/finish dates. It abides by the triple constraint or the project management triangle: time, cost/resources, and scope/quality.

When implementing any project, you are bound by these three parameters. You only have so much time, so much money, and can do so much. If you change one, it affects all the others. Even minor changes (especially multiple minor changes over time) can cause scope creep, threatening the timeline and success of your project. 

Why does scope matter?

Because it's the least obvious, and easiest to let go. You know how much money you have, you know how much time you have, but scope is almost infinite.

What does this mean if you are managing a project?

It means you need to set your scope in stone, or risk losing money and time. Adding in extra features or changing the plan can increase work hours, resulting in increased labour costs, increased project timelines, and personnel fatigue. 

The impact may not be as strong if you have external clients that you bill hourly, but if you're billing by the project at a fixed price or are working on a project internally, you'll start to see your profitability  (and potentially your team's morale) decrease.

What can you do?

A well outlined scope document is the first step:

  • Define your minimum viable product and decide exactly what it will look like when completed
  • Set clear goals for the result of the project. If you know what the goals are, you'll know if you've done whats required to meet those goals. Otherwise you could keep working on the project, seeking perfection that will never come
  • Decide what will be left out. Outlining what isn't included in the project is just as important as outlining what is included
  • Manage the amount of changes. Understand that your product will never be "perfect", so limit the amount of changes that will be made before it is considered complete. Updates and additional features can be added later. 

Project management is an art as much of a science. If you aren't able to manage your time, budget, and scope effectively, you'll end up either not completing your project within the deadline, going way over budget, or eating into your own profitability trying to make it perfect.

Spend the extra time in your scope document and project plan on the front end to save yourself time in the middle of the project, and your budget and profitability throughout the whole process.

Though project management and strategic planning are two separate entities, they are both integral to your organization's success (Learn about how to align your project management styles with your strategic plan). 

Is your team ready to start the strategic planning process? 
Our Complete Strategic Planning Starter Kit has everything you need:


Our readers' favourite posts