Value Management and Value Engineering

' Look at the essence of a thing, whether it be a point of doctrine, of practice, or of interpretation'.

Marcus Aurelius

Introduction

Value Management (VM) and Value Engineering (VE) is a structured and systematic approach to improving value from a project by establishing clear views and consensus among key stakeholders:

• About the nature of the problem or opportunity to be addressed and hence the project objectives.
• That the proposed solution represents the best possible response.
• That the scope of the solution encompasses only those functions that are necessary to satisfy the defined problem or opportunity.

Value Management as a methodology is of major importance as it enables an organisation to avoid unnecessary expenditure by helping to ensure that:

• Capital is only expended on demonstrated needs.
• The consequent investment delivers the required objectives at the lowest whole-life cost without detriment to quality, performance and reliability.

Value Management is a fundamental 'state of mind' that should be applied by project managers and project teams in concept terms to all projects, regardless of size, complexity or novelty. However, for larger and more complex projects the approach is formalised. Its scope can be best understood in terms of a number of distinct steps known as the 'job plan' through which it is classically undertaken.

Value Management by Value Solutions Ltd

Value Solutions have carried out in excess of 500 Value Management and Value Engineering studies with more than 60 client organisations across the UK. The way in which we conduct Value Management is essentially:

• Utilising multi-disciplinary teams to analyse and solve problems. This may be carried out in workshops, via the internet (eVM), or through a Value Manager (who may be an appropriately trained Project Manager) interacting with project and client teams on a more individual basis.
• Using structured problem solving.
• Analysing problems by Diagnosing Purpose using a range of methods, tools and techniques.

Structured problem solving involves analysing problems in an organised manner, through a series of distinct steps:

1. Information - establishing, analysing and prioritising information that is relevant to the problem under investigation.
2. Diagnosing Purpose - establishing and prioritising what the needs, wants and requirements of a project are.
3. Innovation - generating solutions to the problem under investigation based on the analysis carried out in stages 1 and 2.
4. Evaluation and Development - analysing solutions generated to ensure they meet the Diagnosed Purpose as well as any other key criteria identified e.g. monetary, time, cost, quality, risks etc.
5. Implementation - planning for implementation of the solutions identified.

Areas where Value Management is relevant includes, but is not limited to:

• Traditional Value Management (strategic application) on projects to ensure value for money is achieved for stakeholders.
• Traditional Value Engineering (technical application) on projects to ensure value for money is achieved for stakeholders.
• Strategic studies, including Business Case development, process improvement and process rationalisation.
• Organisational change studies, including team restructuring and departmental restructuring.
• Briefing studies.
• Asset and Facilities Management.
• Project value audits.
• Procurement studies.
• Project programmes.
• Partnering studies.
• Bid conferences.

Value Management Services

Value Solutions offer traditional Value Management services, through workshop applications, and increasingly as online Electronic VM (eVM) and Autonomous Value Management interventions. The Value Management methodology is also applied as part of our other service offerings as it forms an integral part of a host of other management methods, including Strategy Formulation, Asset Management, Change Management and Risk Management, for example.

We are first in the UK to offer eVM which is a very cost and time effective way of applying Value Management. eVM was originally conceived back in 1999 by Marcus Grönqvist at the University of Leeds as a proposal for a PhD and was subsequently developed as a framework for conducting VM utilising electronic means. The framework has been developed to enable VM to be conducted by participants in disparate locations in an asynchronous manner across potentially different timezones.

A dedicated internet software package is used to manage the process as well as other web based technology such as e-mail, discussion boards, Skype and Netmeeting in conjunction with the Delphi method and an experienced Value Manager. The total package enables participants to communicate and analyse problems in a structured manner remotely i.e. reducing the need for physical meetings thereby minimising the time and costs associated with traditional Value Management interventions.

We are also increasingly implementing Autonomous VM in client organisations giving them the power to use VM on a day to day basis without the need for hiring expensive external consultants. This is a very cost effective way to maximise value for money both on individual projects and on a wider organisational level.

For more information on the services that we offer please contact us.