Project Management Value Measurement Process

Value management is a process which will have to be used throughout the project.  The  different  tools  and  techniques are available  which  will  be applied at different stages to meet the specific requirements of that stage. The value management at this stage is more concerned with giving the client's statement of need.

The value management process will directly map onto the project management process. The value management is undertaken as a sequence of workshops which can be considered as the intervention points at some strategic points in the life of a project. The number and the right timing of intervention points will also depend upon the project, and the workshops can be combined where needed. The typical deliverables from the workshops are as shown below:

Figure : PM value measurement process

VM 1: It is one of the prime purposes of the workshop and this stage is used to present the clear and objective terms of the mission of the project and also its strategic fit with the corporate goal of the client organisation.

VM 2: It is the goal of the workshop to convert the output from VM1 into the project scope document which will define and also specify the performance of the elements of the project

VM 3: Once the scope has been defined, the project team will begin to test the different design options against the agreed criteria and also determine the most appropriate solution.

VM 4: It is the workshop which can act as the catch-all refining the final stages of the concurrently designed elements or dealing with the changes in the project requirements.

The VM3 and the VM4 workshops are often referred to as the value engineering  exercises.  The  typical  value  management workshop  will consists of the five step process which is referred to as the job plan. The general outputs of each of the steps for the early stages of the project are given in the table below. In utilising, the value management for the early stages of the project, the main technique which is being used is that of the facilitated decision making within the workshop environment. The five step process can be used to structure the agenda for each of the workshop and depending on the stage of the project and the required output; the different tools and techniques might be used in each of the steps.

Table : Generic outputs for the value measurement workshop

Step 1 - Information

In order to define the project's requirements a clear understanding of the problem which has to be solved is necessary.

There are many questions which the client might want to ask, to explore, and then to brief the project team accordingly. The value management is also used to allow the client a forum for giving the answers to some of the questions that require asking.

At the early stages of the project the information is typically not held in the documents but is held in the minds of the people. The complicated issues which give rise to the need for a project may be often locked up in the minds of the people who are running the different functional departments within the organisation. To get the actual picture of the problem this information needs to  be extracted  and  also  documented  in  such a  fashion  which  can  be available to the project team.

The most appropriate method to get to the base information is to use the facilitated workshop. The facilitated workshop will bring together the whole key stakeholders from within the client organisation and the project team and at this stage in the project life-cycle would be a VM1. This kind of workshop will typically last for two days and can be used as a forum for getting the core information which will form the client's statement of need. But, the facilitator is not a member of the project team. This person is usually an expert in the value management process and will focus on managing the process of the workshop but not its content. This facilitator will give a structure which the stakeholders can discuss the main elements of the  problem  for  which  the  potential  project  is  aimed  at  solving.  To commence the workshop, the facilitator will have to ask each of the stakeholders to outline the objectives, the constraints and the risks for the project.

The  basic  information  will  then  be  used  as  the  starting  point  for  the facilitated discussion. The first workshop will have be the first time that the main stakeholders would have all met at the same time to discuss the project. The workshop gives the time required to discuss the project properly. It is usually the case that the senior executives are not prepared to take the time out of their busy schedule to discuss the project which could have been important for the future well-being of the organisation. They may be forced to make time later on if the project goes wrong. Once the objectives, the constraints and the risks of the project have been discussed, the next phase is to organise the information into a graphical representation which is called a value tree.

The value tree is a way of organising the data in such a manner which would allow the people to visualise the most vital elements of the project and the other main feature of the value tree is the ability to show the scope of the project. Often there are elements of the project upon which the client will not be able to decide until some of the initial design and the costs work has been undertaken. By making the areas explicit which the client may like to  include but are presently considered to be outside the scope of  the project, the design teams will have a clearer responsibility upon which to work.

During the later stages of the project where the VM2 or the VM3 workshop is held a variation of the value tree are used called as the Function Analysis and Systems Technique (FAST). The concept in the FAST diagrams is similar to that of the value trees but more emphasis is given in defining the functions.

Step 2 - Speculation

During this step the team focuses on generating the ideas as to how to give the main elements recognised in the previous step. For example, are the 5 consulting rooms adequate or should 4 be given and should the provision be made to give a fifth at a later date? The main feature of the speculation step is to stimulate the creativity. There are four golden rules which govern this stage are:

1.  In suspended judgment: Here, there is no criticism or evaluation about what comes during the next step.

2.  In freewheel the more unique the ideas the better.

3.  In quantity the more ideas the better.

4.  In cross-fertilise the ideas of others are combined and improved.

The main technique used in the speculation workshop is the brainstorming technique, where the team develops the ideas, which are written onto the flip charts. Creative thinking is important to this step if the situation where the same old ideas are used to solve design the problem has to be avoided. Therefore  it  is  necessary  to  make  sure  that  the  opposite  environment prevails once the ideas for giving the main elements have been generated. The next step is to evaluate them.

Step 3 - Evaluation

During this step, the ideas are shifted to identify those which might be worth investigating further. It will take the time and the money to create the ideas and therefore only the most promising can be taken. During the speculation step, it is very easy to develop as many as 200 ideas; these might now be pruned down to about 20 which will be developed further. Here, justification is the keyword of the evaluation step. The exercise will have to focus on justifying why an idea will have to be developed and, if no justification can be found, then it can also be rejected. This process makes sure that the ideas are not dismissed because they will not work so the dismissal should be justified by the rational explanation of why they may not work.

Step 4 - Development

During this step, the ideas which would have survived the evaluation step are developed further. The sufficient development work will have to be done to refine the potential solutions to the point where they can be rejected or taken further and perhaps also be incorporated into the client's brief. The amount of time and effort finished on any one proposal is sufficient only to allow the client to decide what that brief might contain.

Step 5 - Recommendations or Implementation

During the final level of the five step job plan, the findings of the value management exercise will have to be written up in a formal report for the presentation to the client. The intention of this report is to give an accurate record of the exercise for any future reference. The report will often have to form the basis of the client's statement of requirements and therefore the accuracy is paramount. This report can then be used in later VM studies to make sure the consistency of the decisions and act as an audit trail. The five step job plan will allow the client to state the project in such a manner as to make sure that there is little room left for any kind of ambiguity during the later phases of the project. It is this structure of the five step process which will make sure that all the decisions are made in the consensus manner and also against agreed common criteria.