The Government of Malaysia is applying the value management in public management. In relation, UTM is initiating various initiatives in value management. For more information, please read below.
Compiled and distributed by the UTM Office of Corporate Affairs for reference by heads
of PTJs, April, 12 2011.
FAQs ON VALUE MANAGEMENT
Background
In general, Value management is a structured approach to defining what value means to the organisation and the project. (www.apm.org.uk/Definitions.asp) A 2009 study on the impact of Value Management implementation in Malaysia revealed that construction projects in the country that applied the concept had recorded savings on the initial project cost by between 10 per cent and 30 per percent, said Datuk Seri Najib Tun Razak.
The Prime Minister said, however, the industry, including the private sector had not been as quick to adopt the concept comprehensively and institutionalise it within the system. Industry experts and observers laud the Government’s move to require value management analysis for public service projects and programmes costing over RM50mil under the 10th Malaysia Plan (10MP).
However, they also feel that the value management analysis should be for all projects and programmes. (Bernama) In tandem with the call by the Government to implement Value Management in development projects and programmes, the UTM Management Committee (JPU) has decided to consolidate all current efforts which already incorporate elements of value management practice in PTJs and further address this for university-wide implementation beginning 2011. All major PTJs are required to submit a report on implementation of value management for at least one project which has been completed.
The following FAQs are prepared based on compilation of information from various sources including the Internet to provide some general understanding to all PTJ leaders on Value Management.
What is Value Management?
Value management has been defined in various ways and from different perspectives. From one angle, Value Management can be seen as a structured team based approach to identify functional requirements of projects/contracts to achieve Optimum Function for Minimum Cost. (Institute of Value Management UK) Value management is also seen as a combination of planning tools and methods to find the optimum balance of project benefits in relation to project costs and risks. The concept of value as used in Value Management distinguishes this method from conventional methods of cost review. It achieves this by considering the relationship between function, cost, and worth. Value Management can also be defined as the process of planning, assessing and developing the project in order to make the right decisions about the optimized balance of project benefits, risks and costs. It involves representatives of key stakeholders in a facilitated workshop. It can be referred to as a team based creative approach to problem solving and systematic analysis of functions that sets Value Management apart from other management tools.
What are the key characteristics of Value Management?
Value Management has the following key characteristics (Department of Housing and Works, Government of Western Australia : Value Management Guidelines) :
• a specific methodology
• based upon a creative problem solving approach
• involves key stakeholders in a managed team approach
• focuses on function ie. what it must do, not what it is
• focuses on achieving value-added solutions
• based on integration
• focuses on project learning
What are the techniques used for Value Management?
Value Management uses a unique combination of concepts and methods to create sustainable value for both organisations and their stakeholders. Some tools and techniques are specific to Value Management and others are generic tools that many organisations and individuals use.
What are the general applications of Value Management? Value Management studies should be scheduled at optimal points in the project lifecycle and structured to meet the objectives relevant to the particular stage of the project.Applications of Value Management to government projects include but are not restricted to:
• establishing and verifying project objective analysing project briefs
• optimising design solutions
• resolving conflicts and improving communication and
• creating and analysing a range of options for executive consideration.
What are the aims of Value Management?
Value Management aims to produce solutions creatively and economically by:
• identifying unnecessary expenditure
• challenging assumptions
• generating alternative ideas
• promoting innovation
• optimising resources
• saving time, money and energy
• simplifying methods and procedures
• eliminating redundant items
• updating standards, criteria and objectives.(Department of Housing and Works, Government of Western Australia : Value Management Guidelines)
What are the benefits of Value Management?
(Department of Housing and Works, Government of Western Australia : Value Management Guidelines)
• a better understanding of needs and the functions necessary to meet those needs
• a better definition of program or project objectives
• a better definition of quality and performance standards
• clearer briefs
• reduced wastage of resources
• capital funds savings
• improved operational efficiencies
• team building and strategies which
• create a climate of shared understanding
• reduce conflict and risks
• foster joint ownership of problems and solutions
• create new ideas for improved outcomes
• enhance the skills of the participants
• save on project development time and ultimate service delivery to the community
What are the general steps in the Value Management process?
(Institute of Value Management UK)
a) InformationIdentification and testing of program or project rationale from the perspective of stakeholders’ positions e.g. alignment with Corporate Objectives and/or Service Strategies.
b) Function analysisIdentification and ranking of primary and secondary functions and their associated cost and worth relationship.
c) Ideas generationGeneration of value improvement options through innovation and alternate means of achieving the required function.
d) EvaluationSorting and prioritising value improvement options to identify viable alternatives. Evaluation of options may continue beyond the Value Management Study.
e) Action planIdentification of actions/strategies required to achieve Value Study outcomes and to provide ongoing management framework for project progression.
f) Analysis and reportingFinal reporting includes a description of outcomes and documentation of rationale to ensure appropriate focus is maintained through the project development stages.
Is there any standard on Value Management?
There is one from British Standard Institution: Guidelines to BS EN 12973 Value management – practical guidance to its use and intent. There are also other standard and guidelines from other sources.
What is expected from government departments in Value Management?
Using Value Management throughout the development of a project is a requirement for all Government agencies and departments (see PM’s speech). This requirement applies particularly to the early development stages including:
• Establishing project objectives
• Preparing project brief, and
• Considering concept and design options.
Government agencies and departments responsible for the delivery of services are responsible for the effective management of their assets/resources to a standard that is appropriate for effective achievement of its corporate goals.
Every agency/department is expected to:
• have in place an effective planning process for when and how Value Management will be used
• demonstrate compliance with government’s policy in relation to the use of Value Management when applying for the funding of significant projects.