Sometimes, surprises can be exciting, but unplanned work in a project seldom yields positive outcomes. Adding free features and extra functionality doesn’t always benefit the recipient, who may not appreciate receiving something he didn’t ask for. Moreover, ‘bonus work’ contradicts fundamental project management principles designed to keep work on track. Deciding to go beyond the scope of work without informing the client—though often well-intentioned—can lead to unforeseen issues with the project. This practice, gold plating, is actively discouraged in IT work.

What is gold plating?

Gold plating occurs when a team member goes beyond the project’s initial scope and includes extra features or functionality. For instance, an IT service team member might finish an API integration ahead of schedule and use the extra time to improve the client’s CRM setup. However, if the client did not ask for this enhancement, they may not appreciate it. On the other hand, gold plating can set unrealistic expectations for future deliverables, where clients may anticipate additional features without corresponding adjustments in budget or schedule.

Although “going above and beyond” is often praised, gold plating can negatively affect IT projects. Outcomes of gold plating include scope creep, scheduling delays, increased costs, reputational damage, and other unintended consequences. Clients may have reasons for excluding specific work from the project. Also, by adding unwanted features, you can consume time without adding meaningful value and risk losing potential revenue when team members donate time to free work instead of focusing on paid and scoped deliverables.

If the client does not like the extra work, it can damage your reputation because the client may feel the project agreement wasn’t respected. You and your team would then need to spend additional time removing the bonus feature, compounding the issue with further delays and inefficiencies. 

Why does gold plating happen?

There are several reasons why gold plating tends to crop up on projects, even if unintentionally:

1. Desire to impress the client 

Project teams may believe adding extra features will impress the client and increase their satisfaction.

2. Lack of clear requirements

When the project scope and requirements are not clearly defined and documented upfront, ambiguity arises about what is actually in scope versus out-of-scope, leading to unnecessary work. 

3. Misunderstanding the actual needs

A team member on the project may have made incorrect assumptions about what the client truly needed or wanted, leading them to go overboard.

4. Technician’s mentality

Technical experts often strongly desire to do things “the right way” from a technical standpoint. However, this can cause scope creep if their definition of “the right way” exceeds the client’s needs.

5. Demonstrate proficiency

The additional work could allow a professional to show off skills or knowledge in a particular area. This motivation can result in unnecessary work outside the project’s defined parameters.

Who is responsible for gold plating

Responsibility for gold plating can change between scenarios. Sometimes, only one person is found at fault, while other times, multiple people may be involved. 

  • A team member: The person doing the extra work is responsible for spending time and resources to add unrequested functionality to the project. 
  • Project manager: Though more accountable than responsible, the project manager should prevent gold plating by maintaining constant tracking and communication. Failing to keep track of the project’s scope can encourage this occurrence. 

Examples of gold plating in IT services 

Gold plating manifests in various forms across IT service engagements. While enhancements like a “more advanced login experience” or “additional workflows” might seem beneficial, they can throw a wrench into the resource allocation plan as time and costs accumulate. Using examples of how this can manifest within managed IT work can help illustrate why: 

1. Server migration project 

Scenario: Rather than simply transferring data, the engineers rebuild the entire architecture from scratch using newer systems.

Impact: The client did not plan to train their 500-person company to operate the newer system, as the time needed would affect their production. Instead, the client asks for data transfer to occur as initially planned. 

2. Additional integrations 

Scenario: When tasked with setting up a single Salesforce integration, the team builds out multiple additional integrations with various enterprise systems “just in case.”

Impact: The client had not planned how to structure user access to the additional integrations. They now must have internal planning meetings, which replace other work. The inconvenience damages the client’s opinion of the MSP.

3. Network configuration

Scenario: Rather than using a client’s existing network configuration, consultants fully redesign and rebuild the network topology. 

Impact: The complete redesign takes much longer than expected, with unforeseen obstacles. The team either has to redo the project using the existing network configuration or overcome the new obstacles—either way, the project takes a lot longer, pushing back deadlines. The client is unhappy that their completion date is much later than discussed and must push back some of their plans. 

In each case, the IT team has invested substantially more time, effort, and cost into the engagement than initially contracted. 

Gold plating vs. out of scope

Gold plating in project management can appear similar to out-of-scope work, as both involve additional tasks not included in the original scope. However, the critical difference lies in who initiates these tasks.

Gold plating: This occurs when the internal IT team initiates project enhancements without a request from the client. 

Out of scope: This happens when the client requests additional work. If the request does not go through these processes and remains outside the bounds of the contracted work, it stays out of scope. However, if the request goes through proper change management processes, it can be added to the scope, budgeted, and scheduled. 

How gold plating is eating your margins 

Here are five key reasons why gold plating is silently eroding your project margins. This leads to a cycle of inefficiency, client dissatisfaction, and, ultimately, financial loss. Each point illustrates the hidden costs and consequences that can arise from straying beyond the agreed-upon project scope.

1. Sunk costs

All the extra time and resources invested into gold plating are sunk costs that the company cannot recoup from the client since the client never agreed to that labor. 

2. Reduced efficiency

Gold plating makes your operations less efficient and productive since projects take longer than needed. The team member involved in gold plating cannot start the next paid project, which prolongs the time before the company can bill for new work.

3. Missed deadlines

Projects frequently miss deadlines due to excessive scope creep from gold plating. Your company might feel pressured not to bill for the unrequested time, further reducing profitability.

4. Client frustration 

Clients can become frustrated if projects consistently go past timelines without their approval. The frustration may prevent them from agreeing to future work, pushing clients to take their business to a competitor.

5. Quality risks

Introducing unplanned features can compromise the quality of the original deliverables, leading to rework and increased support costs. The client might not be charged for fixing bugs and issues caused by the team, resulting in the company sacrificing its resources for free.

In professional IT work, time and effort directly translate into project pricing. IT services are not tangible products but labor-based, so the profit loss might not seem as apparent as it would if a product were given away for free. However, the impact on company profitability comes from time and potential bottlenecks caused by overdelivering for the client. 

How to avoid gold plating in the future

Implementing specific project management tactics can prevent gold plating from becoming an issue.

1. Strict scope definition

Ensure all parties agree to and sign off on the scope before the project starts. The project manager should communicate to the team that they should adhere only to deliverables in the written scope.

2. Implement change management

Add a clear change management procedure and communicate it with the team. Having a system in place will formalize discussion around any deviation from the scope. Instead of professionals taking matters into their own hands and gold plating, they can submit a change request. This ensures the team knows whether the client desires a task before work begins rather than after implementing additional functionality.

3. Engage in project tracking

Regularly track tasks and sprints to head off gold plating. Reviews and audits can ensure work is on track. It also allows the project manager a chance to catch changes early on and stop gold plating. 

4. Educate the team and communicate frequently

Train employees on gold plating, why it’s problematic, and processes to avoid scope creep.

5. Monitor deliverables 

Continuously revisit and audit work streams to ensure efforts align with contracted deliverables.

6. Use project management tools 

Automating tracking and project progression with project management tools can provide visibility into work progress, ensuring that all efforts align with the project scope. 

You can limit unnecessary gold plating by being proactive and disciplined about scoping, controlling changes, getting approvals, and educating teams. By recognizing the warning signs of gold plating, understanding its root causes, and implementing scope and change control best practices, your company can optimize operations, deliver efficiently, and protect your hard-earned profits.

How a CPQ can prevent gold plating

A CPQ tool like ScopeStack’s CPQ software for IT service providers can quickly generate detailed and accurate project scopes. Outlining the specific components and deliverables clearly from the start makes it easier for all stakeholders to agree upon the work and stay within those confines. Additionally, a CPQ can create easily digestible statement of work (SOW) documents that lay out what the client is getting. This transparency sets accurate expectations for all involved parties. Adding guard rails from the sales engagement sets the tone for the rest of the project and helps prevent gold plating. 

How can a CPQ tool built by IT professionals improve your MSP/VAR company’s margins? Contact us to learn how.

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