While nobody likes unexpected changes and change orders during a project, new research from D-Tools suggests that change orders typically result in more project topline revenues.
Specifically, change orders add an average of 2% on top of project topline revenues, and integrators are more than five times more likely to increase their revenues from change orders than they are to lose money on change orders, according to Atlanta-based D-Tools.
The integration business software provider’s 2023 D-Tools Change Order Special Report, which is based on data from actual projects built using D-Tools Cloud from June 1, 2022 to May 31, 2023, finds that more than half of all integration companies broke even on their change orders, with 49% reporting their change orders were neither a net positive nor net negative and 43% saying they use change orders to boost project revenues.
Change Orders Lead to $14K More Annual Revenue, Per D-Tools Study
Overall, change orders revenue equated to an additional 2% in revenues for the average company for the year and an additional $256 per project, according to D-Tools.
Combining data from all integrators (those who increased revenue, broke even or lost revenue), the average company earned an additional $13,394 via change orders for the 12-month period.
For those integrators that say change orders resulted in a net positive, the average annual additional revenue was nearly $34,000, according to report.
“While David Bowie said, ‘Ch-ch-ch-ch-changes, don’t want to be a richer man,’ integrators that do ch-ch-ch-change orders are indeed richer, adding an average of 2% in topline revenues to their projects,” says Jason Knott, D-Tools data solutions architect & evangelist.
“Our 2023 D-Tools Change Order Special Report digs deeper into the culture of Change Orders, addressing whether dealers should have a business model built on minimizing the number of Change Orders, or have a model that intentionally starts with a lower price point and counts on getting more Change Orders. The report also looks at the root causes of internal Change Orders that can cost dealers money.”
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