In the world of project management, there exists a lurking adversary that haunts even the most seasoned professionals – the dreaded scope creep. Picture this: you meticulously plan a project, defining its goals, objectives, and deliverables, only to watch helplessly as it gradually deviates from its intended path. Like an insidious predator, scope creep sneaks in, silently and steadily expanding the project’s boundaries, devouring budgets, timelines, and resources along the way. Discover how to deal with it! 

What is scope creep? 

Scope creep refers to the uncontrolled expansion of a project’s scope, occurring when additional requirements, features, or changes are introduced beyond the originally defined parameters. It is a common phenomenon that has the potential to turn even the most well-organized projects into chaotic nightmares. 

While it is natural for projects to evolve and adapt to emerging needs, unmanaged scope creep can have severe consequences. It can lead to cost overruns, missed deadlines, compromised quality, frustrated team members, and dissatisfied stakeholders. Recognizing the importance of effectively managing scope creep has become increasingly vital in today’s fast-paced and dynamic business landscape. 

Scope creep can arise from various sources and factors. Here are some of its common causes: 

• Poor initial project definition – insufficiently defining project goals, objectives, and deliverables from the outset can pave the way for scope creep. Lack of clarity in project requirements opens the door for additional features and changes to be introduced later, expanding the project scope beyond its intended boundaries. 
• Evolving stakeholder expectations – as a project progresses, stakeholders may develop new ideas or change their requirements based on evolving market conditions or emerging trends. If these changes are not adequately managed, they can result in scope creep. Failure to effectively communicate and align stakeholder expectations can lead to an uncontrolled expansion of project scope. 

• Inadequate requirements management – when project requirements are not thoroughly captured, documented, and validated, additional features and changes are likely introduced during the project execution phase. 
• Absence of change control processes – without proper mechanisms in place to assess, evaluate, and approve changes, there is a higher risk of unauthorized additions to the project scope. 
• Overpromising or accommodating scope requests – project teams that are eager to please stakeholders or win new business may succumb to the temptation of accommodating every scope request. Overpromising or not firmly negotiating changes can lead to unchecked scope expansion, ultimately compromising project success. 
• External influences and external dependencies – external factors, such as changes in regulations, technological advancements, or shifts in the market landscape, can influence project scope. If these external influences are not adequately monitored and managed, they can introduce scope creep as the project needs to adapt to the changing environment. 

We were able to get to know the mechanism of scope creep during the Covid-19 pandemic, which affected the dynamic changes of many projects in various industries. Modifications could be related to the remote work model, downtime in supply chains, changes in the law, or the growing demands of stakeholders. 

How to deal with scope creep 

Dealing with scope creep requires a proactive approach, effective communication, and diligent scope management throughout the project lifecycle. Here are the key aspects to consider: 

Predicting scope creep 

Predicting scope creep can be challenging, but some factors may indicate its potential occurrence. These include vague or evolving requirements, frequent changes in project objectives, and stakeholders with conflicting expectations. Additionally, external factors such as market shifts or regulatory changes can contribute to scope creep. By identifying these factors early on, you can be better prepared to address and manage scope changes. 

In this case, it is worth going back to the business analysis and redefining the project. This applies, in particular, to large projects which goals and requirements were defined a year ago or even earlier. 

Early warning signs 

Early warning signs of scope creep may manifest through increasing requests for changes, expanding deliverables, or missed project milestones. Other indicators include frequent scope-related discussions and stakeholders or working overtime trying to save the project. 

It is crucial to stay vigilant and monitor these signs to address them promptly before they escalate into significant scope changes. 

Strategies to prevent scope creep 

You should be flexible and ready to reset priorities because you cannot deliver everything at once. A roundtable discussion with stakeholders or budget adjustments may therefore turn out to be necessary. When trying to prevent scope creep, focus on the following aspects: 

• Thoroughly define the project scope – clearly define the project’s goals, objectives, and deliverables in the initial planning phase. Create the statement of work and backlog. Moreover, you should involve all stakeholders and document their requirements to minimize ambiguity and misunderstandings. 
• Establish change control processes – implement robust change control processes that require formal evaluation, approval, and documentation of scope changes. This ensures that all changes are properly assessed for their impact on the project’s timeline, budget, and resources. 
• Prioritize and negotiate changes – when stakeholders request additional features or changes, prioritize them based on their impact and negotiate the trade-offs. Assess the potential benefits, risks, and implications of each change to make informed decisions that maintain project feasibility. 
• Consider scope freezing – at a certain project stage, you can use a mechanism that limits the introduction of new changes unless they are critical or urgent. This helps maintain focus and prevent scope creep during crucial project phases. 

Agile methodologies 

Agile methodologies, such as Scrum or Kanban, can help mitigate scope creep by fostering iterative and incremental development. With short cycles and frequent feedback loops, agile approaches allow for regular evaluation and adjustment of project scope. Agile teams prioritize collaboration, adaptability, and customer involvement, thus enabling you to develop even complex products by adjusting sprints as needed. 

Importance of communication 

Effective communication is vital to preventing and managing scope creep. Maintain open channels of communication with stakeholders, ensuring a shared understanding of project goals, requirements, and any potential changes. Regularly update stakeholders on project progress, highlighting any scope-related concerns or adjustments. Encourage a collaborative environment where team members and stakeholders feel comfortable discussing scope-related issues openly. 

Read also: Enhancing Software Testing Efficiency with “One Page” Test Plans

Best practices to prevent and deal with scope creep 

As you can see, there is a lot you can do to avoid scope creep. However, you will not always be able to do this. Remember that this phenomenon does not have to sink your project. All you have to do is follow the good practices presented below: 

• Designate a person to monitor the project scope: Although any stakeholder can suggest changes, the final decision regarding their implementation should rest with the product owner. 
• Get tools to monitor scope creep: Regular analysis and progress monitoring will allow you to identify the threat in advance. You will make good use of tools such as Azure DevOps or Jira. Remember, however, that their effectiveness will depend on the person who manages them. 
• Turn scope creep into an opportunity: Although it is not easy, scope creep can be beneficial. It must be properly managed, however. So, make sure that planned modifications will not overwhelm your budget, while increasing the value of the project at the same time. 
• Learn from your failures: If you fail to manage scope creep, do a thorough analysis and remember the conclusions for the future. 
• Watch the role of stakeholders in the project: To minimize the risk of scope creep, ensure that every stakeholder is present at the initial planning stage of the project, as well as later during the review stage. 

Remember that scope creep always affects the project budget and schedule. The product owner should, therefore, skillfully adapt the implementation process to changing requirements. Other managers should also have good project insight. This will allow them to allocate resources adequately, negotiate modifications with stakeholders, and effectively manage documentation. 

The key to effective scope creep risk management is communication – both within the team and with the client. By following the above tips, you will easily detect the threat and avoid the uncontrolled growth of the project scope. 

Do you need help managing your digital projects? Let’s work together! 

Every project involves risk. Imagining the risks that may arise during its implementation is the best way to prepare appropriate solutions. Their implementation in advance can facilitate the comprehensive execution of the project and avoid delays. What exactly is project risk? What are the most common project risks?

What is project risk?

Project risk is the occurrence of various situations that may harm the implementation of the project and affect its success. They may violate the agreed budget, cause delays or prevent the achievement of the assumed goals in full.

Project Risk may be caused by external factors, such as changes in policy, law, social and environmental issues, and internal factors, such as changes in the project team, restructuring, and other random events.

The flowchart is an example of what to do in the case of Project Risk Management:

Scope creep risk

It is extremely important to define the project roadmap and goals accordingly. A ready plan should be presented to stakeholders so that they do not introduce risky and costly changes due to the lack of appropriate communication.

The risk of not having an established vision and its details is high. Any change can lead to missed deadlines and additional costs that are not included in the budget and even decide whether the project will be successful. Regular project progress checks should also be considered to reduce the risk of non-compliance and unknowingly moving away from set goals.

 

Types of project risks: Communication risk

Part of the work ethic is maintaining an appropriate flow of information between individual project team members, subcontractors, and stakeholders. Without proper communication, developing a good action plan, assigning tasks, and maintaining a coherent position and project goal is close to impossible. Misinformation can lead to disruptions in project implementation, unnecessary conflicts, and lack of support in the implementation of tasks in accordance with the goal.^[1]

Read also: The 10 most useful lessons from more than a 10 years of experience in building digital banking platforms

The risk of an ill-matched project team

A properly structured project team is of great importance for the success of the project. People without experience and knowledge of project methodology may not know the basic organizational principles and act against generally accepted regulations. Lack of experience can also affect the success of the project. We are talking here about the lack of proper skills and knowledge in carrying out a specific task.

The problem is also individuals who are resistant to change, which can cause quarrels and delays in the project.

IT project risk: Technology risk

Accelerating and streamlining project implementation is often associated with the use of innovative technology. Typically, the risk is related to the lack of hardware compatibility with the necessary software or simply the lack of ability to use technological solutions. To avoid technological risk, it is also worth considering backing up data and considering the need to use alternative tools if necessary.

Common project risks: Financial risks

Budget overruns can often be related to market conditions, such as salary increases for specific positions. If you don’t offer a proportionately higher wage for some work, you can lose the opportunity to hire the best people and face staff shortages. Therefore, the lack of an established financial reserve may be associated with a high risk in the implementation of project tasks.

The second financial risk is the lack of timely payments for completed tasks. For this reason, part of the budget is invested, and the lack of payments received makes it impossible to cover further expenses. Relying on funds that result from late payments can have a negative impact on the project.

Potential project risks: Performance risk

Performance risk is a type of risk that is beyond the control of the parties involved in project implementation. Even if every element of the project has been implemented, its efficiency may not be sufficient to say that the main goal has been achieved. Unfortunately, this is a significant risk because it has a large impact on the functioning of the company. However, low performance is difficult to predict, and it is only possible to mitigate the impact of performance risk on the company’s future by applying appropriate strategies.

Read also: Migrating existing web applications to the public cloud

Governance risk

The implementation of the project, which must be carried out in accordance with the regulations and legal requirements applicable in a given industry, is very risky. If new regulations are introduced, it will be necessary to adapt to them in the project.

The bottom line for managing project risk

These are just a few of the most common examples of project risk faced by project managers and project teams. Their frequency and type are often related to the specificity of the project and the industry in which they are implemented. Preparing for risk management in each project is a never-ending job, but a conscious approach to the project can increase the chance of its success.

Insurtech companies changed the industry. For the first time in history buying an insurance policy might be an experience people would like to share. With a digital mindset and new technologies on their side, insurtech wizz kids challenge the existing order and pass on their understanding of the insurance idea to the young generations.

What Insurtech is not

In the past centuries the life cycle of a middle class was quite predictable with not so many alternative choices. Graduating from school, getting married, then having children, eventually growing old peacefully. However, just when you least expect accidents to happen, the best-laid plans can be turned upside down. On this occasion, it was customary to buy the life insurance policy in order to minimize risk. A responsible man would make provisions for his wife and children in the case of his death. In turn, the gravity of that agreement made insurers believe in the sacred duty they owed to the policyholders. Despite it being a noble intention, it happened that insurance companies would quit the business before the agreement expired. The lack of virtue ethics exercised by some adds weight to stereotypes which blemished the reputation of the whole industry. Followed by reprehensible sins of the opaque legal records and haughty attitude toward clients, incumbents led to immoral behaviour on both sides of the agreement. Eventually, as the insurance business had accumulated with ambiguous feelings, a change must have happened.

Insurtech Rising

Recent transformations in society, economic and cultural changes, in a relatively short period of time have multiplied possible ways of living. The arrival of new technology and social media on stage made the whole world of difference between the needs of today’s young adults and their parents. Now everything must be “clickable”, there is no time for long-duration plans. Insurance, as a vehicle invented by societies, must have been changed accordingly to the pace of the customers’ lives. Coverage details, claims status, contact with agent, emergency assistance, all should be available at hand. The slogan “Forget everything you know about insurance”, coined by the Lemonade, is a voice of the generation. Less opaque in promises, and more transparent in actions, insurtech companies have worked their way through the burdensome past and overcome it in an effort to regain esteem as the backbone of society.

Insurtech Fusion

As the saying goes, honesty is the best policy. It strengthens relationships between people and develops a sense of security too. What is a risk for one person is not a risk for society. The number of bad outcomes is fairly predictable, therefore the risk can be kept under control and mitigated. Thanks to a combination of both, the digital native approach of startups and weight of assets of the incumbents based on centuries-old experience, new products and services are on their way to expand a market. Insurance bureaucracy is taken over by machines that communicate with each other through API’s with a speed that no human would ever achieve. The substitution of the traditional administration for AI and bots is inevitable even for companies like Allianz, MetLife, and Generali, that set up their businesses in the 19th century. The scene from life where actuaries and insurance brokers are overlaid with paperwork instead of being focused on customers’ needs it’s in the past. Digitalization supports risk pooling, according to which policyholders pay premiums to the insurance company for its standing ready to manage certain well-defined risks against which the policies were issued. Big data and machine learning help actuarial sciences to limit moral hazard and selection bias, two main factors that usually stand in the way to achieve the effective pooling of risk.

Insurtech Landscape

Top Insurtech to watch this year. Since it was clear that the insurance industry is ripe for digitalization, a bunch of new articles with similar titles appear every year. With every year the landscape of insurtech startups that are popping up is growing. Venture capitalists fund risky projects in order for the startups to come up with disruptive solutions. Kasko offers white-labelled customer journeys, digital quote-offer-bind, policy administration, capturing FNOL (First Notice of Loss) and integrates it into many distribution channels via app or API. Trov cooperates with insurance carriers depending on the geographical region and specializes in handling micro-duration policies by using the app. Simplesurance offers an easy and convenient way to purchase product insurances. Kovrr delivers insights into cyber risk that people around insurance, underwriters, catastrophe modelers, risk officers need to have in order to mitigate the cyber risk that insurance companies are exposed to. Kasko partnered with ACREDIA, Trov is backed by AXA, Simplesurance and KOVRR offered solutions for Allianz. Insurtech startups collaborate with many to connect the entire claims value chain in one ecosystem. However, every brand is unique and each differs from others, insurtech startups have a common denominator.

Insurtech Connect

Insurtech, as every startup, needs customers from the very beginning of its existence. Every iteration in the continuous delivery process relies heavily on the customer’s feedback. From the first release to the last one, startups are constantly learning about the products under development. Engaging customers in the process at the early stage leverages initiatives and brings resilience to local communities. As one from the offered product suite, the insurance policy is a representation of a particular social agreement. It can not be touched, but the sense of its uniqueness must be felt. The first experience of being insured by the insurance company must therefore be that it is founded on mutual trust. Nothing should be withheld or concealed, giving rise to any suspicions. By openly stating simple and transparent ideas, insurtech companies win loyalty and trigger more virtuous behaviour on both sides of the policy agreement. Whether the company is concerned about the climate risk (Zesty.ai), the connection of the low income populations in sub-Saharan Africa (BimaAfya), or shares a clear statement of what will happen with the surplus amount of money, i.e. it is transferred to local high school computer laboratories and charities (Lemonade) or just paid back to customers, as the risk didn’t happen (Friendsurance), these demeanors drag more socially conscious customers, who identify with values of the brand and have a sense of the higher purpose.