Value and Risk Management
Value management (VM) is a management strategy applied in organisations aimed at articulating the value of a project in terms of its long term benefits and linking such benefits to the most cost effective design strategies. In simpler terms, value management may be defined as a well established method of analysing, defining and maximising the value of money invested in a given project by an organisation.
A value management study is used to evaluate projects which an organisation is planning to undertake and the effectiveness of this study is independent of the size or the time-frame of the project in question (Victor, Dieter 2004). TechWatt Corporation, a small but fast growing IT company producing both computer hardware and software systems is considering investing in a new regional HQ as part of an ambitious expansion plan, and are about to commission a major project for this.
Funds of approximately ? 5M have been allocated for this purpose. No major decisions have been made yet regarding a possible site or the specific facilities to be provided. However, TechWatt expect the proposed scheme to include the following: Office accommodation for management and administrative employees (12 staff). A workshop for hi-tech light manufacturing processes (15 staff). The ability to receive visits from clients and potential clients for meetings and to tour facilities.
The key to having a successful project first of all calls for a clear understanding of the value and what it means to the clients in order to establish the project objectives (McGeorge 2002). Specific issues to be addressed by the VM study. A value management study for TechWatt will be seeking to identify the most appropriate site for the establishment of the three projects for the proposed scheme project and the respective sizes which will fit within the limits of the given budget as well as help to determine the specific facilities to be provided by the expansion scheme once it has been implemented.
In addition, value management study will be aimed at addressing the following three specific issues: overall awareness of how much value is available for the organisation defining appropriate estimates for the value as well as closely monitoring and controlling the value of the project. Clearly understanding the objectives and the targets for the organisation before seeking appropriate solutions. Providing key strategies aimed at maximising the innovations with achieving practical outcomes.
Who should be involved in the study? The value management study should involve a design team or an external team of people who have no previous involvement in this particular project to ensure that their views on the project are unbiased. The team should comprise of: Four staff members from the client organisation three of whom should be quantity surveyors. This will serve to provide a relevant in-sight into the functions of the project and rough estimates on the expected cost of the proposed scheme.
In addition to the design team chosen to carry out the VM study, two team leaders or a facilitators will be required to lead the design team. These people must have a good and deep knowledge concerning the function analysis of the scheme, proper team building skills, a basic knowledge on the proposed project of construction and be in a position to come up with several project alternatives which will serve as backup. Two architects from the architectural consultants firm to provide proper structural design for the project.