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 VM addresses the value process during the

concept, definition, implementation and
operation phases of a project i.e. the
systematic and logical procedures and
techniques that enhance project value
through the life of the facility. VM is the
management of a process to obtain
maximum value on a scale determined by the
client; therefore it centres on the
identification of the requirements. Here the
maximum value is obtained from a required
level of quality at least cost; OR the highest
level of quality for a given cost; OR from an
optimum compromise between the two.
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 Note that VM is about enhancing value and
cutting the cost is just a by-product but not
the main aim. VM thus aims to maximise
project value (stakeholder value for money
by achieving balance between cost and
function) within time and cost constraints
without detriment to function, performance,
reliability and quality. It is structured,
auditable, accountable, multi-disciplinary,
and seeks to maximise the creative
potential of all project participants. This
may however initially require extra
expenditure.

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 Valueplanning – value techniques
applied during the concept or
planning phase of a project to ensure
that value is planned into the whole
project from its inception. It is done
by addressing and ranking
stakeholders requirements in order of
importance i.e. define project concept,
objective, feasibility and approach

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 Valueengineering – value
techniques applied during the
design or engineering phase – it
investigates, analyses, compares
and selects amongst the various
options those that will meet the
value requirements of
stakeholders i.e. develop design
and details, construction

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 Value analysis or reviewing – value
techniques applied retrospectively to
completed projects to analyse or to
audit the projects performance and
compare a completed or nearly
completed design or project against
predetermined expectations –
conducted in the post-construction
period as part of a post-occupancy
evaluation exercise i.e. operation and
decommissioning.

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 Concept stage – help identify the need for a
project, its key objectives and constraints
 Feasibility stage – evaluate broad project
approach and evaluate developing design
proposals
 Detailed design – to review and evaluate key
design decisions as design progresses
 Construction stage – to reduce costs, improve
buildability and functionality
 Operation stage – to improve possible
malfunctions or deficiencies
 Decommissioning – to learn lessons for
future projects.
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 Functional analysis – a technique designed
to help the appraisal of value by a careful
analysis of function i.e. the fundamental
reason why the project element or
component exists or is being designed –
ask the questions
◦ What is it
◦ What does it do
◦ What does it cost
◦ How valuable is it
◦ What else can do the job
◦ What will that cost

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 The process is designed to identify
alternatives more valuable and/or cost
effective ways to achieve the key functional
requirements. Functional analysis is thus
more suited to analysis of the detailed
design of specific components or elements
of a project.
 Usually it entails use of a job plan which is

a logical and sequential approach to

problem solving where multi-disciplinary
groups use creative techniques to establish
comparative cost in relation to function

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 Orientation – identification or definition of
what has to be achieved and what are the
key project requirements, priorities, and
desirable characteristics
 Information – gathering relevant data about
needs, wants, values, costs, risks, time
scale and other project constraints
 Speculation or brainstorming – generation
of alternative options for the achievement
of client needs within the stated
requirements i.e. identify options for
resolving the requirements. This is a crucial
step as the quality of ideas generated
determines the worth of the approach

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 Evaluation – of the alternative options
identified in the speculation stage
 Development – of the most promising

options and their more detailed

appraisal
 Recommendation for action – select

the option with the greatest potential

 Implementation and feedback –

examination of how the

recommendations were implemented
to provide lessons for future projects.

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a structured approach used to address
all elements of cost of ownership
based on the anticipated life span of a
project. In construction the following
categories are considered;
◦ Investment or capital cost: site costs,
design fees, legal fees, construction
costs, tax allowances, and
development fees

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◦ Operation and maintenance costs:
letting fees, maintenance costs
(cleaning and servicing), repair costs,
security, insurance, caretaker
◦ Replacement of components –
planned replacement
◦ Residual or terminal credits – NB:
constructed facilities depreciate until
they become economically or
structurally redundant whereas land
appreciates in value.

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 Projectssuffer from poor
definition because of inadequate
time and thought given in earlier
stages; and poor analysis of needs
(ambiguous brief)– these results
in cost and time overruns, claims,
user dissatisfaction and excessive
operating costs.
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 There are elements in a project that
contribute to poor value including;
◦ Inadequate time
◦ Habitual thinking/tradition
◦ Conservatism and inertia
◦ Attitudes and influences of
stakeholders
◦ Lack of or poor communication
◦ Lack of coordination between the
designer and operator
◦ Lack of relationship between design
and construction methods

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◦ Outdated standards or specifications
◦ Absence of state of the art technology
◦ Honest false beliefs/honest
misconceptions
◦ Prejudicial thinking
◦ Lack of needed experts
◦ Lack of ideas
◦ Unnecessarily restrictive design criteria
◦ Restricted design fee
◦ Temporary decisions that become
permanent
◦ Scope of changes for missing items
◦ Lack of needed information
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 The needs of a project is always
verified and supported by data
 Project objectives are openly discussed

and clearly identified

 Key decisions are rational, explicit and

accountable
 The design evolves within an agreed

framework of project objectives

 Alternative options are always

considered

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 Outline design proposals are carefully
evaluated and selected on basis of defined
performance criteria
 It improves communication and teamwork
by involving all the stakeholders including
investors, end-users, consultants,
constructors, clients and specialist
suppliers
 Enhanced shared understanding among
key participants
 Better quality project definition
 Increased innovations
 Elimination of unnecessary cost

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 Provides a forum for all parties in a
project development
 Provides review of entire project
 Identifies project constraints and

challenges
 Identifies and prioritise project

objectives
 Improves quality definition

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 Evaluates means of achieving project
objectives
 Remedies project deficiencies, omissions

and superfluous items

 Ensure design is most effective for the

purpose
 Identifies and eliminates unnecessary

costs
 Provides management/client with the

information to make informed decisions

 Enhances return on investment
 Promotes innovation.

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