Glasgow Caledonian University: Risk & Value Management Project Report

This report provides a detailed analysis of value management (VM) within the context of project management, emphasizing its role in enhancing the value for money in projects. It differentiates between strategy, programs, and projects, highlighting that VM is specifically applicable to projects, which are defined as temporary, unique, and cross-functional endeavors. The report critically evaluates the validity of the statement that public sector clients lack a coherent value system, affecting the function of public sector buildings, arguing that while diversity exists, the function is typically tied to public needs. Furthermore, it discusses the use of business cases in public sector decision-making, particularly the strategic outline business case (SOBC), and suggests integrating VM in its development to ensure stakeholder needs are met. The report references various studies and frameworks to support its analysis and recommendations.

Value Management
By
ID:
To
DR. Malawi Ngwira (Module Leader, Department of Construction and Survey)
MODULE: RISK AND VALUE MANAGEMENT (MMK226174-23-B-GLAS)
School of engineering and built environment
Glasgow Caledonian University Scotland, UK
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Contents
Part 1................................................................................................................................................3
Part 2................................................................................................................................................5
Part 3................................................................................................................................................6
Conclusion and recommendations:................................................................................................10
References......................................................................................................................................12
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Part 1
Value Management is an organised and systematic strategy utilized to enhance the worth of
money in programs and also projects (Kelly and Male, (2003). VM includes identifying and
examining the alternatives readily available for supplying a project or program and choosing the
one that offers the most effective value for money (Male et al., 1998). The idea of VM has been
existing for many years and also is widely utilised in the building and engineering markets. Kelly
and Male, (2003) mentioned that project Management represents lots of tools and also techniques
for the monitoring of an effective project. Among one the most pertained to of these tools would
certainly be Earned Value Analysis. It seems as if this stage or the title, "Earned Value
Management" remains satisfied and addressed with dread altering to the idea of efficiency
(Thiry, 2013).Value Management applies to all stages of a project, from intending to execution
and also monitoring (Male et al., 1998). The crucial goal of VM is to guarantee that the job
provides the anticipated value for money. The process of VM involves the complying with steps:
Figure: The process of Value Management (Source: Kelly and Male, (2003)
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Define the task purposes
and also demands.
Recognize the numerous
alternatives offered for
delivering the task.
Assess the choices based
on their benefits,
expenses, as well as
threats.
Select the choice that
provides the best value
for money.
Implement the chosen
alternative.
Screen and also review
the task to make certain
that it is supplying the
anticipated worth for
money.

There is a distinction between strategy, programs as well as projects since Value Management is
only related to projects. According to the research work of Kelly and Male, (2003) there is a
distinction between strategies, programs, and also tasks, and also VM can just be put on jobs.
Consequently, understanding what comprises a job is vital.
A project stands as a temporary venture developed to achieve certain objectives within a defined
timespan and also a budget plan. project is unique and also requires a various collection of skills
and knowledge contrasted to ongoing procedures (Thiry, 2013). Tasks are characterized by the
complying with characteristics:
Temporary- Projects have a defined beginning and end day. When the project is done, the group
is dissolved.
Unique- Projects have unique characteristics, and also each project has certain requirements and
objectives (Thiry, 2013).
Cross-functional - Projects involve people from various practice areas who collaborate to
accomplish the project aims.
Risk - Projects include threats, and the project team requires to manage and alleviate these
threats.
There is a distinction between technique, programs, and tasks. Strategy links to the overarching
plan or technique that an organisation takes to attain its lasting objectives (Thiry, 2013).
Programs remain in the larger tactical objectives that an organisation sets to reach its critical
goals. Projects, on the contrary, are the on-the-ground strategic plans and also efforts made use
of to achieve program goals.
In other words, strategy is the big-picture reasoning, while programs remain in the intermediate
phase to achieving the technique, and also projects are the details actions that require to be
required to carry out the programs (Dallas, 2006). The approach is usually developed by senior
leaders or execs within an organisation, while programs, as well as projects, are implemented by
supervisors as well as staff members at different degrees (Thiry, 2013). The method can be
versatile and extremely wide, while projects and programs tend to be extra details as well as in-
depth in regards to what requires to be accomplished as well as how it will be
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done.Organizations need to comprehend the distinctions between approaches, programs, as well
as tasks to successfully plan and implement their objectives. As per the study of Kelly et al.,
(2014) without a clear knowledge of the hierarchy among the three, an organisation can have a
hard time achieving its purposes and waste sources on unnecessary jobs.
In summary, strategy, programs, and tasks are very important elements of an organisation's goal-
setting and accomplishment process. Recognizing the distinctions among these three terms is
essential for the effective planning and also implementation of business objectives (Dallas,
2006). VM is a powerful device for boosting the worth of money of tasks. While VM may only
be implied to projects, understanding what constitutes a job is important. It is for that reason
important to understand the features of a job to apply VM successfully.
Part 2
According to the declaration of Kelly et al. (2014b), the make-up of public market customers is
different and also does not have a coherent value system, resulting in trouble in determining the
key function of some public industry buildings, and questions about the efficiency as well as the
function of public market facilities. To seriously analyse the validity of this declaration, it is
needed to consider the variables that add to the make-up of public market clients as well as the
role that worth systems play in figuring out the function of public field structures (Dallas, 2006).
It is vital to note of the public field encompasses a vast range of organizations and also
establishments, consisting of government firms, non-profit organizations, and public energies.
The varied nature of these bodies can cause a lack of comprehensibility regarding their values
and purposes, which consequently can influence the feature of public field buildings (Kelly et al.,
(2014b). Nevertheless, it is also vital to identify that many public field companies are assisted by
specific mandates and objectives that notify their decision-making as well as operations.
Additionally, the main feature of public field buildings is typically identified by their intended
use as well as the requirements of the social context they serve. A public set-up might be made to
advertise literacy as well as access to info, while a public clinic may be created to offer clinical
treatment as well as support to people (Dallas, 2006). While the worths, as well as priorities of
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specific public industry clients, may differ, the feature of their structures is normally linked to
certain public needs and also priorities.
To conclude, while it holds that the make-up of public industry clients can differ plus do not
have a meaningful value system, this doesn't undoubtedly imply that the main feature of public
field structures is unclear. Instead, the diverse feature of public industry organisations and also
the special demands of the areas they offer can add to a variety of features and also concerns for
the public framework (Dallas, 2006). Ultimately, the efficiency and function of public industry
buildings need to be assessed based on their capability to meet the requirements of the
neighbourhoods they offer, instead of on the comprehensibility of the value systems of private
public market customers.
Part 3
To boost the procurement process and also lower expenses, the United States government has
executed the Challenge.gov system, which permits federal companies to welcome firms as well
as citizens to submit propositions for difficulties (Kelly et al., 2014b). By functioning this way,
agencies can get innovative ideas and also services that can help them accomplish their
objectives while likewise reducing expenses. In addition to utilising systems like Challenge.gov,
public field firms can also use different tools and also techniques to develop company situations
for proposed campaigns. They can perform cost-benefit evaluations to examine the potential
economic impact of a proposed effort, or they can utilize threat management frameworks to
determine as well as minimize possible dangers. In general, considering a service instance is an
essential element of decision-making in the general public sector, and firms can make use of a
selection of strategies and also devices to create a detailed analysis of recommended initiatives
(Kelly et al., 2014b). In this way, they can make certain that they are making educated decisions
that remain in the very best rate of interest of their stakeholders. Using an organisation case is a
typical method in public field firms for decision-making concerning new jobs or programs. A
company case is a detailed file that details the recommended job or program, its potential
advantages, expenses, threats, and feasibility (Dallas, 2006). The function of a company situation
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is to give decision-makers the required info to make informed choices on whether to wage the
proposed initiative or not.
The business situation process entails analyzing and reviewing the recommended initiative's
expediency, risks, costs, as well as advantages. This evaluation assists decision-makers to
recognize the possible outcomes of the task or program and make knowledgeful decisions based
on the details supplied. Additionally, the business case procedure helps to make certain that the
suggested initiative aligns with the company's total critical objectives and objectives. A Business
Case is a device made use of by public field agencies to evaluate and choose brand-new tasks or
programs. It stands as a record that describes the benefits, prices, threats, and potential influence
of a suggested project or program (Dallas, 2006). Any Business Case is usually prepared before a
job or program is accepted to make certain that it lines up with the company's critical goals, is
monetarily viable, as well as can be finished within a practical timeframe. Norton and Mcelligott,
(1995) highlight that using a Business Case can aid public sector agencies make educated
decisions concerning brand-new jobs or programs. It offers a structure for analyzing the
expediency as well as analyzing a proposed effort, including its prospective advantages and also
costs. By evaluating the possible advantages as well as costs, the firm can establish whether the
recommended initiative is value pursuing and whether it lines up with its general goals and also
top priorities. A Business Case normally consists of several components, consisting of a recap of
the suggested initiative, an evaluation of business demand, an assessment of the advantages as
well as prices, an analysis of the dangers and also difficulties, and a suggestion on whether to go
along with the initiative (Kissi et al., 2020). The evaluation of benefits and costs is specifically
crucial, as it makes it possible for the company to identify whether the possible benefits of the
effort exceed the expenses and also whether it is financially practical. In addition to supplying a
structure for decision-making, any Business Case can likewise aid public industry companies to
interact with the reasoning behind a proposed campaign to stakeholders, including chosen
authorities, neighbourhood teams, and also the general public (Norton and Mcelligott, 1995). By
offering a clear as well as concise summary of the suggested campaign, along with an evaluation
of its possible advantages as well as costs, the company can build assistance for the initiative as
well as gain buy-in from vital stakeholders.
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Overall, the use of a Business Case is an essential device for public industry companies when
taking into consideration new projects. It offers a structured method of decision-making as well
as allows agencies to assess recommended efforts based on their possible advantages as well as
expenses (Kissi et al., 2020). By using Business Cases, firms can make educated choices that
straighten with their calculated goals and also top priorities, while also constructing support from
key stakeholders.
Kelly et al., (2014b) argued that Value Management is an organised process that aims to make
the best use of value by recognising and resolving stakeholders' requirements as well as demands
in a task or program. It involves an organized approach to knowing the project's goals, defining
the range, identifying options, examining alternatives, as well as choosing one of the most
suitable options. On the contrary, a strategic outline business case or SOBC is a paper that
describes the strategic situation for a task, laying out its objectives, prospective choices, benefits,
costs, dangers, and expediency (Thiry, 2013). It provides a base for deciding whether to go ahead
with the project, choose a choice, and also establish a full business situation. Provided the goals
of both VM plus SOBC, it's justified to recommend that VM can be linked to the growth of an
SOBC (Kissi et al., 2020). Thus, VM can aid to make certain that the SOBC determines all
appropriate stakeholders, comprehends their requirements and also requirements, and also
develops a durable case that maximizes worth. VM can aid to guarantee that the SOBC considers
all feasible choices, reviews them systematically, and also chooses the ideal alternative based on
a clear knowledge of their relative benefits, prices, and threats (Thiry, 2013). This can aid to
guarantee that the SOBC is extensive, transparent, as well as durable, giving a strong structure
for the succeeding phases of the task.
Finally, while there is no straight evidence to support the connection between VM and also the
growth of an SOBC, it's sensible to recommend that VM can be appropriate to this procedure
(Thiry, 2013). By adopting a structured and systematic approach to worth monitoring, project
supervisors can create an extra durable and also efficient SOBC that takes full advantage of
value, maximizes outcomes, as well as lessen threats.
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In the UK public market, the principle of "Value for Money" is vital in decision-making
procedures involving the allotment of public funding (Kissi et al. 2020). Value for Money or
VfM is among the essential considerations in any choice that entails pocket money in the general
public market.
Value Management (VM) is an organised technique to take full advantage of the process value of
a project or else a program, it involves identifying, evaluating, and also enhancing the value
supplied to stakeholders (Thiry, 2013). Value Management or VM is extensively relevant to the
value for money or VfM system in UK public sector jobs as it supplies a systematic method for
making sure that public funds are invested in one of the most reliable ways feasible (Miles,
2015).
Kissi et al. (2020) mentioned that VM entails a collection of tasks, including specifying goals,
assessing the requirements of stakeholders, identifying as well as examining alternatives, and
choosing the very best choice based on its capacity to deliver value. By embarking on these
activities, public field organizations can guarantee that they are utilising the highest use of the
resources and also supplying the maximum worth to their stakeholders.
Therefore, regarding to Miles, (2015) it is clear that the Value Management task is extremely
related to the Value for Money procedure in UK public industry jobs. By using VM, public field
companies can make sure that they are attaining the highest degree of VfM and offering optimal
value to their stakeholders.
The idea of Value for Money or VfM in public costs is focused on achieving economic,
effectiveness, and efficiency (Miles, 2015). While VfM is a critical consider infrastructure
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purchase for the general public sector, its performance evaluation procedure is reportedly laden
with constraints as well as barriers as pointed out by Kissi et al. (2020). Among the main
obstacles to the VfM efficiency analysis process is the absence of standardized metrics for
calculating VfM (Miles, 2015). This can bring about problems in contrasting the value of various
projects and also can create instability in decision-making. VfM can be translated differently by
diverse stakeholders, leading to more issues in the analysis procedure. An additional constraint is
the difficulty of examining non-financial variables that affect VfM, like environmental and also
social effects. These factors might be challenging to measure as well as may not have prompt
monetary benefits, enabling them less visible and more challenging to consist of in the
assessment process (Cui et al. (2019). Furthermore, VfM assessments can be affected by political
factors, such as the need to satisfy short-term goals or achieve political benefits, which may not
straighten with the lasting value proposal of infrastructure jobs. Finally yet importantly,
restricted access to data and proficiency can prevent the evaluation procedure. VfM analyses call
for accessibility to related data, such as project expenses and benefits, which might not be readily
offered (Cui et al. (2019). Assessing VfM needs technical proficiency in locations such as
monetary evaluation as well as threat assessment, which might be doing not have in some
companies.
Finally, the VfM performance evaluation process for public market facilities procurement faces
several obstacles as well as restrictions. These include the absence of standard metrics, problems
in examining non-financial variables, political considerations, and also restricted access to data
and also competence (Cui et al. (2019). Addressing these obstacles is critical to make certain that
public facilities tasks provide ideal worth for taxpayers' money.
Conclusion and recommendations:
VM has been noted as having the potential to bring essential for projects due to its utilisation of
many knowledge resources, professional disciplines, and stakeholders, as well as its facilitated
atmosphere, smart scheduling, and effective procedures. Prior to making important decisions,
VM makes sure that sustainability is prioritised. It could lessen the competing demands of
financial concerns and social and ecological concerns. Value management is an activity that may
increase the worth of public services to get the most value. It is envisaged that this study will
highlight the benefits of utilising value management and provide a logical framework that can be
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used to comply with the statutory responsibility of Best Value. Value management is still in its
infancy in local authorities. Though VM is a potentially effective strategy for enhancing resource
efficiency, the existence of voids and impediments shows the need for assistance to fully take
advantage of this potential. It is advised to look for solutions to close these gaps and remove
these obstacles, such as by creating tools, providing instructions, enhancing expertise, etc.
Empowering project efficacy via VM will improve its standing as a value-enhancing approach
and provide it the opportunity to continue providing services at a competitive level, particularly
in terms of the calibre of recommendations made and proposals created.
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References
Cui, C., Wang, J., Liu, Y. and Coffey, V., 2019. Relationships among value-for-money drivers of
public–private partnership infrastructure projects. Journal of infrastructure systems, 25(2),
p.04019007.
Dallas, M. (2006). Value and risk management [electronic resource]. Oxford: Blackwell
Publishing.
Kelly, J. and Male, S. (2003). Value Management in Design and Construction. Routledge.
Kelly, J., Male, S. and Graham, D. (2014a). Value management of construction projects.
Chichester, West Sussex, UK: Wiley Blackwell.
Kelly, J., Male, S. and Graham, D. (2014b). Value management of construction projects.
Chichester, West Sussex, UK: Wiley Blackwell.
Kissi, E., Adjei-Kumi, T., Twum-Ampofo, S. and Debrah, C., 2020. Identifying the latent
shortcomings in achieving value for money within the Ghanaian construction industry. Journal
of Public Procurement, 20(3), pp.313-330.
Male, S., Kelly, J., Fernie, S. and Thomas Telford Ltd (1998). Value management : the value
management benchmark; a good practice framework for clients and practitioners. Thomas
Telford Publishing.
Miles, L.D. (2015). Techniques of Value Analysis and Engineering. Miles Value Foundation.
Norton, B.R. and Mcelligott, W.C. (1995). Value management in construction : a practical
guide. Basingstoke, Hampshire England: Macmillan.
Thiry, M. (2013). A Framework for Value Management Practice. Project Management Institute.
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