Change orders have long been accepted as an unavoidable part of construction. Yet forward-thinking builders are demonstrating that with the right technology and processes, many change orders can be prevented before they ever arise. By analyzing historical project data and integrating project management systems with accounting software, construction firms can identify the root causes of change events and take corrective action. For a deeper look at managing the financial side of project changes, see our article on Construction Change Orders Pricing Documentation and Dispute Prevention, which covers pricing strategies and documentation best practices.
The True Cost of Change Orders in Construction
Change orders disrupt project schedules, strain relationships with subcontractors, and erode profit margins. While some changes are inevitable, many stem from preventable causes such as unclear drawings, jurisdictional code changes, or miscommunication between stakeholders. The construction industry has traditionally treated change orders as a fact of life, but a shift is taking place as firms adopt data-driven approaches to project management.
EYA, a Washington, D.C.-area builder and developer of luxury townhomes and communities, set out to challenge this assumption. Under the leadership of Pete Zafros, the company’s director of technology, EYA implemented the Procore project management system in 2013. The goal was not merely to track change orders more efficiently, but to eliminate unnecessary ones by addressing their underlying causes. The results demonstrate how construction technology can transform project outcomes when deployed with a clear strategy.
How Change Orders Erode Profitability
The financial impact of change orders extends beyond the direct cost of the change itself. When a change order arises, project teams must redirect resources away from planned work to assess the impact, negotiate pricing, update schedules, and communicate with subcontractors. This administrative overhead can consume hours of valuable project management time. In addition, change orders often trigger delays that cascade through the project timeline, potentially leading to liquidated damages or strained client relationships.
For a builder operating on slim margins, this can mean the difference between a profitable project and a loss. The key is to shift from reacting to change orders to preventing them through data analysis and process improvement.
Integrating Project Management with Accounting for Real-Time Visibility
The cornerstone of EYA’s approach was integrating its accounting enterprise resource planning (ERP) system with the Procore project management platform. This integration gave project managers real-time visibility into project profitability, enabling them to make informed decisions about potential changes with full cost information at their fingertips.
Before this integration, project managers at EYA operated with delayed financial data. They might not learn about the cost impact of a change until weeks after the decision was made, by which time corrective action was difficult or impossible. The integration changed this dynamic entirely. Project managers could now track their projects’ profitability in real time, forecast upcoming costs in later phases, and make design changes based on actual project performance data.
Benefits of Real-Time Cost Data
Having immediate access to cost information proved especially valuable when project managers faced pending major structural changes. With real-time profitability data, they could determine whether the budget had sufficient latitude to accommodate additional modifications. This visibility empowered project managers to say no to changes that would erode margins, or to propose alternative approaches that achieved the same design intent at lower cost.
- Immediate budget impact assessment: Project managers can see how a proposed change affects overall project profitability within minutes, not weeks.
- Informed decision-making: Full cost visibility allows project managers to evaluate whether a change is financially viable before committing resources.
- Subcontractor communication: Real-time data enables faster, more accurate communication with subcontractors about the scope and cost of changes.
- Value engineering: Teams can compare cost data against budgets and make design adjustments that optimize value without sacrificing quality.
EYA used this capability to implement a value-engineering process. The company compares actual cost data with its budgets, makes design changes based on project profitability trends, and uses the project management platform to communicate changes to subcontractors. This closed-loop process ensures that every change is evaluated not just on its technical merits, but on its financial implications.
Categorizing Change Events to Eliminate Root Causes
The most important insight from EYA’s experience is that change orders are symptoms, not root causes. As Zafros put it, “Procore has recognized that change orders are symptoms of a change event — they’re not the root cause.” Every change event in the system carries a change reason: the specificity of the company’s drawings, jurisdictional code changes, owner-requested modifications, or unforeseen site conditions, among others.
By categorizing change events and analyzing trends over time, EYA could identify recurring problems and address them at the source. For example, if drawings were consistently the leading cause of change orders, the company could work with its drafting department to improve drawing quality and specificity. If code changes from a particular jurisdiction were driving changes, the team could adjust its preconstruction process to account for local requirements earlier.
How to Implement Change Event Categorization
Any construction firm using a modern project management system can implement change event categorization. The process follows a straightforward sequence:
- Define change reason categories that are relevant to your projects. Common categories include drawing errors, owner changes, code compliance, site conditions, subcontractor issues, and material availability.
- Require documentation of the change reason for every change event, whether or not the change results in a formal change order.
- Generate periodic reports that aggregate change events by reason category, project type, and time period.
- Analyze trends to identify which categories are most frequent and which contribute the most cost impact.
- Take corrective action at the source. If drawing errors are the top cause, invest in better quality control during the design phase.
- Track improvements over successive projects to measure whether corrective actions are working.
This systematic approach shifts the focus from managing change orders reactively to preventing change events proactively. As Zafros noted, “We’re focused on the construction changes and the design activities that drive change — not contracts and change orders, as the industry has been for a long time.”
Key Change Categories and Their Impact
| Change Category | Typical Root Cause | Prevention Strategy | Cost Impact Reduction |
|---|---|---|---|
| Drawing errors or omissions | Insufficient design review | Enhanced QA/QC during design phase | High |
| Jurisdictional code changes | Late identification of local requirements | Early code compliance review | Medium |
| Owner-requested modifications | Evolving project requirements | Clear scope definition upfront | Variable |
| Unforeseen site conditions | Inadequate site investigation | Thorough preconstruction surveys | Medium to High |
| Subcontractor coordination issues | Poor communication of interfaces | Integrated project delivery methods | Medium |
By tracking these categories across multiple projects, builders can build a knowledge base that informs estimating, design review, and preconstruction planning. For more on how to structure contractual protections around change orders, refer to Resolving Construction Disputes Over Specifications Change Orders and.
Implementing Construction Technology Through Knowledge Cascade
Technology alone is not enough. EYA’s success with Procore was as much about people and process as it was about software. Zafros used the “technology adoption curve” from Everett Rogers’ Diffusion of Innovations as his guide, recognizing that different team members would adopt the new system at different rates and through different motivations.
The implementation strategy was built around a “knowledge cascade” approach. Rather than training everyone at once or focusing first on the most resistant users, Zafros identified the “Innovators” — employees who enjoyed trying new technology for its own sake. These early learners mastered the system first, then cascaded their knowledge to “Early Adopters,” who were more selective but well-respected within the organization.
The Five Adopter Groups in Construction Technology Deployment
Understanding the characteristics of each adopter group helps construction leaders tailor their training and communication strategies:
| Adopter Group | Percentage of Workforce | Motivation | Best Training Approach |
|---|---|---|---|
| Innovators | 2.5% | Enjoy novelty and exploration | Give them early access and freedom to experiment |
| Early Adopters | 13.5% | Respected opinion leaders | Train them after Innovators, leverage their credibility |
| Early Majority | 34% | Practical benefits and peer validation | Show proven results and peer success stories |
| Late Majority | 34% | Pressure from peers and necessity | Provide structured training and clear expectations |
| Laggards | 16% | Tradition and resistance to change | Offer individual support and demonstrate necessity |
As Zafros explained, “I think that, many times, people get focused on the hardest part first — that’s not always the best way to roll out new software and changes. You want to focus on getting some victories and prove value and you have to remember that every person is different. If we treated everybody the same, we were not going to have the success we wanted.”
Focusing on Field-Centric Capabilities First
EYA’s implementation manager from Procore helped determine which system tools would deliver the quickest “time to value.” Rather than attempting to deploy every feature at once, the team focused on field-centric capabilities first — drawings, RFIs (requests for information), and specifications. The goal was to ensure that field crews had the proper information to construct buildings correctly the first time.
Within just a couple of months, field crews became comfortable accessing key project information on their iPads and iPhones. The payback was immediate. Fewer RFIs meant less disruption to workflow. Better access to current drawings reduced the likelihood of construction errors that would require change orders to fix. By the end of the first year, the system was fully incorporated into daily operations.
Lessons for Construction Firms Adopting New Technology
- Start with the willing: Train the most motivated users first and let them become champions who can train others. This builds momentum and creates internal credibility.
- Focus on quick wins: Deploy features that deliver immediate value, such as mobile access to drawings, before tackling more complex workflows.
- Respect different learning styles: Not everyone adopts technology at the same pace. Tailor training approaches to each adopter group.
- Prove value early: Early successes build confidence and generate word-of-mouth adoption that formal training cannot replicate.
- Integrate systems thoughtfully: The full value of project management software is realized when it connects with accounting and ERP systems.
By taking this phased, people-centric approach, EYA achieved full system adoption within one year. The key was not forcing change from the top down, but creating an environment where adoption happened organically through peer influence and demonstrated value.
For additional guidance on managing disputes that arise from project changes, read Resolving Construction Disputes Specifications Change Orders Cost Overruns and explore Change Orders in Construction Contracts Types Features and.
The case of EYA demonstrates that change orders do not have to be inevitable. By combining integrated project management and accounting systems with change-event categorization and a people-first implementation strategy, construction firms can reduce unnecessary changes, protect profit margins, and deliver projects more predictably. The key is recognizing that change orders are symptoms of deeper issues and that the right data can help eliminate those issues at their source.