Value Management

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Running Head: VALUE MANAGEMENT
Value management
Student’s Name
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VALUE MANAGEMENT
Summary
Value for money is the measure for the cost of goods and services in terms of monetary
value against their benefits and quality, this is done when subjective factors are taken into
account which includes fitness for the product or service purpose, whole of life cost which are
installation cost, training cost, disposal, wastage and maintenance costs. In public procurement,
value for money isn’t viewed as the means of achieving the lowest initial costs of goods and
services. Besides, value for money is referred to as the optimal combination of the price and
quality of the product or a function as a whole. Several factors exist which are much influential
in the lack of value for money in the public procurement including, lack of a reliable source of
critical financial management and procurement information, lack of strategic approach,
neglecting of E-commerce among others. Remedy to this factors includes; introduction of
government procurement cards, developing a procurement plan and supplier evaluation.
Introduction
Value for money can be defined as the measure for the cost of goods and services in
terms of monetary value against their benefits and quality, this is done when subjective factors
are taken into account which includes fitness for the product or service purpose, whole of life
cost which are installation cost, training cost, disposal, wastage and maintenance costs. In the
day to day activity, this concept can be easily understood as paying more cash for services and
goods which their quality does not rhyme. According to the public sector, the value for money is
recognized as a concern to the cost minimization or the economy, output maximization or the
efficiency and finally as the full attainment of the intended result or the effectiveness

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VALUE MANAGEMENT
(Glendinning, 2018). In public procurement sector, the concept of value for money is a very
critical aspect which helps the organization to achieve their set objectives and targets.
Public procurement of all goods and services which includes works is always and must
consider the value for money with due regards to regularity and other properties. In public
procurement, value for money isn’t viewed as the means of achieving the lowest initial costs of
goods and services. Besides, value for money is referred to as the optimal combination of the
price and quality of the product or a function as a whole. The public sector procurement indicates
that all goods and services should always be acquired with competition (Raymond, 2008). This
should not apply only if there is an existence of a convincing reason for not competitively
purchasing the services and goods. The form of this competition is defined to be appropriate to
the complexity and the value appropriateness of t6he procurement process. Furthermore, the
competition should also be necessary for the barriers to the involvement of all suppliers to be
removed.
Better value for money in the public departments of procurement can be achieved by
different ways including;
 Having an increase in the product quality as well as the increase in the price at the
same time. Secondly, through the avoidance of unnecessary purchases which will
lead to the erosion of the public money, making sure that the user departments or
individual s are well met to the optimum but not exceeded.
 The fourth way is through the specification of the requirements of the purchase in
terms of output; this will help the suppliers to provide recommendations of
solutions which are cost-effective and innovative to meet the said needs.