Value and Risk Management

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Value and Risk Management

Part 1 : A Value Management Study

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 F5M 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 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...