Implementing Value Management for Enhanced Project Outcomes

Coursework 1

Value Management In Project Success

The University Learning Development Centre

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Executive Summary

The present report is concerned about the potential importance and outcomes of value management within a project, where it is identified that value management can be applied in different fields based on the requirement, but it has better applicability in the projects. Furthermore, it identified the projects, programs, and strategies that have some basic differences, where the project has distinct approaches in terms of the start date, end date, and a set of strategies to complete within a specific time. The program has no such approach, and the benefits of the program are strategy-oriented. However, strategic planning has importance in these two aspects. Further, the report identifies that public clients are not coherent, which impacts the decision-making of the project managers regarding the demand of clients. However, due to the context of public fund expenditure, the public projects consider the business case. Lastly, the project confirms that value management approaches deliver positive outcomes to the business operation in terms of the strategic planning and CVS approach, where the value for money context is also discussed.

Table of Contents

1. Introduction 4

1.1 Aim 4

1.2 Background 4

1.3 Scope 4

2. Part 1 4

2.1 Value Management in the Project 4

2.2 Differences between Strategy, Program, and Projects 6

3. Part 2 7

3. 1Public Sector Clients and Value system 7

4. Part 3 8

4.1 Decision Making of Public Agencies 8

4.2 Relevance of Value Management Activity 9

5. Conclusion 10

6. References 11

1. Introduction

1.1 Aim

Value management and offering values to the clients is a process to ensure effective business operation. The aim of the present report is to understand the different aspects of the value propositions and value management in different contexts along with consideration of public service clients.

1.2 Background

Investment in a project or in an organization is subject to the consideration of the outcome of the project. It is observed that an organization can maximize its performance through customer satisfaction with the assessment of its decisions regarding the new projects and procedures. Babar et al. (2017) opine that the value management approach of an organization influences success. It further opines that value management is an approach to constitute a satisfying need for a project and selection of requisite resources to achieve those goals. The value management process is formed with the different steps and processes, which are a preliminary phase for client briefing to fix the strategic diagnosis (Nathan, 2017). Finally, the auditing process offers scope for debriefing to meet the desired goals and objectives.

1.3 Scope

The scope of the project is to understand the value management process within a project along with the identification of differences between the strategy, program, and projects. Furthermore, it investigates the value system of public sector organizations and their decision-making skill. Lastly, the report focussed on the relevance of value management activities for the concerned business case.

2. Part 1

2.1 Value Management in the project

Nathan (2017) opines that team decisions are the crucial aspects for project management as it is the insightful analysis for the activity allocation between the teams in terms of the knowledge, skills, and competencies to handle the project issues. Kineber et al. (2020) define that value management principles are only applicable in the projects during the phase activities. It further identifies that the application of the value management (VM) tools in projects enhances the return of investment from a project. The literature supports this claim with the evidence that the cost of the project can be minimized with greater efficiency in project management. Quality controlling and identification of standard of operation for the business project can be achieved with the VM tool. Kineber et al. (2020) further argue that VM is a collaborative approach for teamwork, where operational methods and systematic processes of project management are analyzed for the promotion of value-oriented customers or clients to attain their projected goal. Forouzanpour et al. (2016) indicate another aspect of the VM tool, where the earned VM tool is effective for the measurement of project progress with the integration of managerial efficiency in terms of the three most important elements, cost, scope, and schedule.

Figure 1 Value balance

(Source: Kineber et al., 2020)

Barquín Gil et al. (2017) capacity-based support scheme is important for the minimization of market distortions and maximization of values from the project. This aspect of project management draws the attention of VM tools as this tool has effectiveness in balancing the Value For Money approach of a project. The VM tool is applicable for the balancing values of a project and maintains a balance between the cost and functionality of the project elements (Babar et al., 2017). Consideration of the organizational environment within the project for the value management of a project identifies the essence of a VM tool is a project. Forouzanpour et al. (2016) argue that the VM tool is applicable to projects with the integration of development plans and workshops along with the project activities. Depending on the procurement route, the Value management approaches vary. It has general applicability in project management, while the aspects of value management can also be applied to the other organizational aspects and ar5eas depending on resource planning and program design process (Constructing Excellence.org.uk. 2021).

2.2 Differences between Strategy, Program, and Projects

Johnson et al. (2017) identify that when a project is designed, the decision-makers of the project specify the goals to achieve. The company adopts a strategy to achieve these gains within a specific period of time. It further identifies that strategy can be relevant to a business operation, where the profit margin and market performances are the projected goals for the strategic identification. Further, the projects can also adopt strategies for the quality requirement and better time management for the completion of a project (Johnson et al., 2017)). Hence, the strategy signs different aspects with respect to the project and program.

Figure 2 Definition of Strategy

(Source: Pollack and Anichenko, 2021)

Illustration of projects and programs can identify the similarity or the difference between these two concepts. Pollack and Anichenko (2021) opine that the project is a degenerative concept where the start date, end date, and requisite resources for completion are identified, along with the strategies for the smooth management of different activities relevant to the project. In this specific aspect. The strategy can be aligned with the project along with strategic integration of the business performance with the project activity to analyze performance is also connected to the aspect of strategy.

Figure 3 Primary Activity of Project

(Source: Walenta, 2016)

Value of the business, as well as the core business management approach, are focused on the projects where the risks relevant to the smooth integration of projects into the business develop a value stream for the client.

Walenta (2016) identifies that project and program have significant differences as the project considers a single endeavor, where the program is a collaboration of different aspects and objectives with a larger scope. It further proposes that the program can be perceived as a combination of the projects to some extent. However, it further identifies that the project has a focus on the contents, where the contextual consideration is the approach for the programs. Pollack and Anichenko (2021) argue that a specific outcome from a specific endeavor is the approach of project management, where the overall benefits that can be achieved from a business are the concern for the program management. Program and projects are connected with each other through their approach towards the execution. The project is more concerned about the technical capabilities, planning, and processes. The program is more relevant to the strategic processes (Walenta, 2016). However, the approach of the program and project both comes with a positive approach towards change as both of these two have an approach to direct towards the positive changes. The path to managing a change within value generation and value management is different in terms of these two aspects, but the approach of these two have similarities (Pollack and Anichenko, 2021).

3. Part 2

3. 1Public Sector Clients and Value system

Public sector clients are an integrated part of the country’s economy as they are considered of effective importance for the governmental service delivery processes. The public sector clients are controlled by the local, national, and state-level governments. Drevland and Tillmann (2018) define a client as a complex system where the production system or service system considers to deliver values. But the client value system of a project considers the cost efficiency, time management, estimation, as well as flexibility, and comfort. The public sector is wide, and they participated in the project in terms of financial management (Vrydagh et al., 2020). The public sector clients are the stakeholders of the public service organizations. The tax-paying population of a country usually acts as the public sector client. The demand of the public sector clients from the government varies as per the demographic change as well as the change in the social status, living environment. Krawchenko (2021) opines that the client value system focuses on the decision-making power of the clients aligned with the ranking of the items as per the requirements of the clients. The diverse nature of the public sector clients creates a non-uniformity in demand. This diverse nature of the client faces a lack of coherence. Drevland and Tillmann, 2018. The value money approach is an optimum combination of the whole life cost of a building and the quality measurement to meet the requisite parameter (Krawchenko, 2021). Due to changes in the financial stability as per the VFM or value for money approach, the project definition changes among the individuals related to a specific project. Correct project definition is a primary requirement to meet the clients’ needs. The project definition is misinterpreted and evaluated the wrong way, which reflects in the identification of the primary function of a building in public sectors (Krawchenko, 2021).

4. Part 3

4.1 Decision Making of Public Agencies

The generic approach of the project management considers the acceptance of the projects into the core business operation. In the public service section, the situation is quite different. Consideration of the service provisions for the integration of projects into the core business functions enhances the effectiveness of the operation of a business (Amos and Abbasi, 2020). Public service operations and projects relevant to the public service are structured with the public funds, where governmental agencies, the provincial government, and the national government are responsible for the selected project and the expenses relevant to it. VFM approach defines that a project has a primary requirement to meet the demand and needs of the customers and clients. Sufficient time and planning process is required for the decision making of the project (Larsen et al., 2021). When the public fund is attached to a specific project, the entities of the project should be related to the needs of the public. Furthermore, priority is also demanded in the public projects towards the private entities so that their value remains unaffected (Amos and Abbasi, 2020). Additionally, the key concepts of VFM approaches define that sustainability approach along with the need of maintenance, cost of maintenance and replacement, disposal costs are also concerned with the project. Consideration of all these aspects, along with the interest of the public and private sectors, creates numerous restrictions for public projects (Winch and Cha, 2020). A key feature of the value for money approach is to avoid conflicts, and the appointment of consultants for improved project management can ensure effective VFM outcomes.

Figure 4 Value Outcome and VM approach

(Source: Larsen et al., 2021)

The value of the project is generated through the effective prodigy strategy, project objectives. However, the final stage of the project development is concerned with the consideration of local authority aspects to the evaluation of the outcome of the project (Larsen et al., 2021). Furthermore, project functionality and project operational influence the project outcome experienced by the local authorities. The aforesaid analysis identifies that expenditure of public funds effectively with VFM approaches of government and private entities requires an expected benefit analysis along with business objective and background analysis (Winch and Cha, 2020). Hence, the consideration of the business case offers a competitive strength to make decisions regarding new projects.

4.2 Relevance of Value Management Activity

Value management activity identifies a strong relationship between the cost, time, and quality, where the cost is the identification of estimated expenditure relevant to the project. A strategic outline of a business can achieve much-needed success through a focus on the time, finance, and performance management approaches. Value is usually identified as the benefits earned in terms of the cost expenditure, where the consideration of quality aspect clarifies the strategic requirements of a firm (Barquín Gil et al., 2017).

Figure 5 Equation for Value

(Source: Ikanut, 2018)

Most commonly, it can be stated that value has a distinct relationship with the functionality and expected cost of a business defines the benefits received from it, where time is an important parameter to enhance the effectiveness (Barquín Gil et al., 2017). Quality, cost, and time triangles, as stated above, generate a general debate on the measurement of parameters relevant to a strategic project. Consideration of this triangular approach of the CVS matrix identifies the quality, time, and cost that can be better managed for the improvement of the project. As opined by Ikanut (2018) VM approach offers a space for the adoption of set measures to minimize the cost for the production of quality products with the restricted time frame.

5. Conclusion

Value management is an important approach taken by the stakeholders for the management of issues within a project, while engineering is a process to be applied for the right direction of the project activities. Review of the process and services related to a project are reviewed by the stakeholders and relevant authorities through a series of events, where the scope of the project, needs, and deliverables of the project are identified. The above analysis represents that value management offers a significant strength to the projects and sets the strategies for improved project management. However, the project and program are identified as the two distinct approaches, where the strategic moves in these two aspects value from these two can be better managed.

6. References

Amos, K. and Abbasi, A., 2020. A Selection and Prioritization Framework for Public Projects. Project Management, 7, p.4.http://unsworks.unsw.edu.au/fapi/datastream/unsworks:69186/bin7a1bbfbf-b078-4281-9b8c-3015687123b7?view=true&xy=01  

Babar, S., Thaheem, M.J. and Ayub, B., 2017. Estimated cost at completion: Integrating risk into earned value management. Journal of Construction Engineering and Management, 143(3), p.04016104. https://www.researchgate.net/profile/Muhammad-Jamaluddin-Thaheem/publication/309005845_Estimated_Cost_at_Completion_Integrating_Risk_into_Earned_Value_Management/links/59f6f159a6fdcc075ec61c2d/Estimated-Cost-at-Completion-Integrating-Risk-into-Earned-Value-Management.pdf 

Barquín Gil, J., Rodilla Rodríguez, P., Cossent Arín, R. and Batlle López, C., 2017. Obtaining best value for money in RES auctions: a capacity-based with an embedded menu of contracts approach. https://repositorio.comillas.edu/xmlui/handle/11531/23913 

Constructingexcellence.org.uk. 2021. [online] Available at: <https://constructingexcellence.org.uk/wp-content/uploads/2015/03/value.pdf>  [Accessed 1 August 2021].

Drevland, F. and Tillmann, P.A., 2018. Value for whom?. In Proceedings of The 26th Annual Conference of the International Group for Lean Construction. IGLC. https://ntnuopen.ntnu.no/ntnu-xmlui/bitstream/handle/11250/2582188/Drevland+and+Tillmann+2018+-+Value+for+Whom_.pdf?sequence=1 

Forouzanpour, H., Mirzazadeh, A. and Nodoust, S., 2016. An evidential reasoning approach for the earned value management. Scientia Iranica, 23(2), pp.685-700. http://scientiairanica.sharif.edu/article_3855_1bb07001100e09c98ad33e1e43accf6e.pdf 

Ikanut, P.M., 2018. The state of practice of value engineering and its relevance to Uganda’s Construction Industry (Doctoral dissertation, Makerere University).http://196.43.133.120/bitstream/handle/20.500.12281/5855/Ikanut-CEDAT-Undergrad.pdf?sequence=3&isAllowed=y 

Johnson, G., Scholes, K., Whittington, R., Regn_r, P. and Angwin, D., 2017. Fundamentals of strategy. Pearson UK. https://books.google.com/books?hl=en&lr=&id=rvJFDwAAQBAJ&oi=fnd&pg=PT14&dq=what+is+Strategy&ots=yxJ45putdk&sig=TNl3EviZX1lAZvu94FkZmpqZLWw 

Khodeir, L.M. and El Ghandour, A., 2019. Examining the role of value management in controlling cost overrun [application on residential construction projects in Egypt]. Ain Shams Engineering Journal, 10(3), pp.471-479. https://www.sciencedirect.com/science/article/pii/S2090447919300310 

Kineber, A.F., Othman, I., Oke, A.E., Chileshe, N. and Alsolami, B., 2020. Critical Value Management Activities in Building Projects: A Case of Egypt. Buildings, 10(12), p.239. https://www.mdpi.com/2075-5309/10/12/239/pdf  

Krawchenko, T., 2021. Public Sector and Productivity: Governing at the Right Scale. In Background paper for the OECD-EC High-Level Expert Workshop Series “Productivity Policy for Places”, April (pp. 18-19).https://www.researchgate.net/profile/Tamara-Krawchenko/publication/353195171_Public_sector_and_productivity_Governance_at_the_right_scale_OECD-EC_high-level_expert_workshop_Productivity_Policy_for_Places/links/60ec760016f9f313007c0467/Public-sector-and-productivity-Governance-at-the-right-scale-OECD-EC-high-level-expert-workshop-Productivity-Policy-for-Places.pdf 

Larsen, A.S.A., Volden, G.H. and Andersen, B., 2021. Project Governance in State-Owned Enterprises: The Case of Major Public Projects’ Governance Arrangements and Quality Assurance Schemes. Administrative Sciences, 11(3), p.66. https://www.mdpi.com/2076-3387/11/3/66/pdf 

Nathan, W.T., 2017. Value management in healthcare: How to establish a value management office to support value-based outcomes in healthcare. Productivity Press. https://www.taylorfrancis.com/books/mono/10.1201/9781315102245/value-management-healthcare-william-tierney-nathan 

Pollack, J. and Anichenko, E., 2021. The Ten Differences Between Programs and Projects, and the Problems They Cause. Engineering Management Journal, pp.1-15. https://www.tandfonline.com/doi/abs/10.1080/10429247.2021.1900661 

Vrydagh, J., Devillers, S. and Reuchamps, M., 2020. The integration of deliberative mini-publics in collaborative governance through the perspectives of citizens and stakeholders: The case of the education reform in French-speaking Belgium. Representation, pp.1-22. https://dial.uclouvain.be/pr/boreal/object/boreal%3A240268/datastream/PDF_01/view 

Walenta, T., 2016. Projects & programs are two different animals, don’t underestimate the gap. Procedia-Social and Behavioral Sciences, 226, pp.365-371. https://www.sciencedirect.com/science/article/pii/S1877042816308862 

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