CSVA 2006 – Improved Value and Decision Making
ACHIEVING HIGH VALUE
PROGRAMS AND PROJECTS
BY MANAGING THE WHOLE
VALUE IMPROVEMENT CYCLE
Michael Thompson
for Martyn Phillips
The TEAM FOCUS Group
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
1
CSVA 2006 – Improved Value and Decision Making
Purpose
 To encourage use of Value Management as
a systematic long-term process of
analytical and innovative explorations that
culminate in firm, tested proposals for
business improvement.
 To describe a VALUE ASSURANCE
approach to achieving high performance
and value
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Topics of Discussion


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

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
Need for Change
Background
Context
Performance and Value
Different VM Approaches
Value Assurance
Conclusion
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Questions
 How many value practitioners
find themselves being involved
in a project from cradle to grave?
 How many project teams
consider it necessary to involve
an external party to assist them
with ensuring that high
performance is achieved?
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Need for Change
 Alternative needed
to “Get Fixed
Quick”
 “Continuum”
approach rather
than “Intervention”
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Background
 Management staff trapped in
a world of tight timelines
and high expectations
 Dealing with fuzziness and
uncertainty of needs and
costs
 Value supposedly built in –
no formal processes
 No universal agreement on
value delivery
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Context
Stakeholders
•Widely differing needs
and expectations
•Return on investment
and expected value not
in line with business
case
Project Team
•Well intentioned
undertakings often lead
to costly overruns,
disruptions to service
•Often unaware of
value expected from
them
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Context
 Some examples of
where it can go
wrong:
 Business people
often absent during
project development
 Return on Investment
criteria not evident,
and therefore not
necessarily attained
 Key knowledgeable
people are lost to the
next critical project
 Information may not be
passed on and many
assumptions may have
to be made by the next
wave of project
personnel (no
continuity)
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Performance & Value
 Value determined not
solely by the producer
/ promoter, but in
concert with the
customer / user.
 Not solely money
 Value includes:





Aesthetics
Functionality
Ease of O&M
Fastest time to market
Sustainability
 Clients seeking to buy
overall performance
improvement, not just
sequence of
traditionally practiced
project development
activities
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Performance & Value
Think
outside
comfort
zone
Receptive
to new
ideas
Less
defensive,
broader
thinking
End result
not just
more of the
same
Ownership to
ensure change
process delivers
expected results
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Different VM Approaches
 There is often confusion over the several,
various value terms, e.g.
Value Analysis
Value Assurance
Value Control
Value Engineering
Value Improvement
Value Planning
 It is of no surprise that expectations of value
improvement and what it can do can differ
considerably
 The traditional VM process does not always fit
comfortably within the mode of operation of
21st century business activities
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Focus
 Quite often, a key piece is missing but the
project proceeds regardless……..
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Focus
Unambiguous
strategic
direction
Selecting most
appropriate
concept
Assuring best
value, managed
risk and value
improvement
Optimising
functionality
Reducing
development
time
Optimising
ongoing process
Rescuing stalled
project / program
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
Balancing capital
and whole life
costs
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CSVA 2006 – Improved Value and Decision Making
Management Levels
Value Engineering
Needs
Assessment
Concept
Engineering
Technical Levels
On-Time,
On Budget,
Delivery
Functionalit
y / Fit for
Purpose
Risk & Value
Managemen
t
Continuing
Improvemen
t
Value Engineering is a very powerful tool –
But it floats in space!
Strategic
Planning
Concept/
Feasibility
Outline
Design
Detailed
Design
Construction &
Commissioning
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
Close
Out
Operations &
Maintenance
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CSVA 2006 – Improved Value and Decision Making
Pro-active
and holistic
approach
Value Assurance
Ensures
expectation
s / results
gap closed
VALUE ASSURANCE
PROGRAM
The umbrella term that ensures and demonstrates the
effectiveness of many other management processes
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Value Assurance
1.
2.
3.
Stage I – Initiation & Analysis
Mandate, Scope, Opportunity etc.
Stakeholder Expectations and Criteria,
Needs Assessment, Communications
Plan
Project Metrics and Base Case
Performance vs. Requirements
Stage IV – Manage the Change
10. Familiarization of Implementers /
Training of Users; Handover Package
11. Briefing of other Parties and “Buy-in”.
12. Implementation, Monitoring, Reporting
& Adjustment
Stage II – Exploration & Potential
Options
4.
Input Summaries, Innovation &
Judgement
5.
Development & Testing Proposals
6.
Selection, Integration & Planning
Stage III – Consultation & Approval to
Implement
7.
Interim Read-out & Feedback
8.
Broad Stakeholder Consultation & Fine
Tuning of Proposals
9.
Recommendations & Approvals
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Conclusion
 The outcomes of programs, project,
products and services vary significantly
 Success is a relative term and its
measurement varies greatly
 Dictating factors include:
 Overall management approach
 Culture of an organization
 Most value enhancement gains are made
through strategic decisions, in conjunction
with stakeholder input
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Conclusion
 A holistic Value Assurance approach can
address the various issues through a
comprehensive, integrated guiding
approach to derive optimal performance
 Maximum effectiveness requires
completion of the whole program, rather
than the commonly observed ad hoc
“interventions”
 To attain these benefits, diligent planning,
senior managerial support and followthrough are required
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
Real Life
 We were recently invited to undertake
a 3-day VE study for a high profile
multi-storey building (not in the UK)
including all preparation time,
workshop time and presentation time
 Objectives were to reduce capital
costs by 35%
 We considered it impractical to
address a job of that magnitude
adequately in such a short time scale
 We declined!
 We also find there is a high demand
for “tick in the box” exercises which
we prefer not to conduct
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
What It All Means
Get away from what
we have always done
in the past
Use a holistic
approach throughout
the life of a project
Pay diligent attention
to the 4 Stages and 12
Themes
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
A Final Thought
 What if we had a smart system that:
 Captures key learnings and project problems?
 Allows corporate feedback to be incorporated
in future planning?
 Avoids the necessity of every generation to
learn the hard way?
 Avoids repeated costs for organisations and for
Society?
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
We have!
Value Assurance
and Continuing Performance
Improvement
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
 Questions
 Feedback
The TEAM FOCUS Group
www.teamfocus.org
Martyn Phillips
46 Pineridge Crescent
St Albert
Alberta, T8N 4P4
Canada
Tel: +1 (780) 460 – 1625
Email: [email protected]
Michael Thompson
44 Hardy Lane
Chorlton
Manchester, M21 7LA
United Kingdom
Tel: +44 20 7871 4568
Email: [email protected]
Improved Value & Decision
Making: CSVA Conference 2006,
Toronto, Canada
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