Best Practice Value Management

Keith Owen
In my new role as Chair of the Institute of Value Management (IVM), I am keen that clients demand best practice value management for their projects.

I am delighted to take up the Chair of the Institute of Value Management (IVM) in the UK for the next two years. The Institute draws its membership from senior professionals in industry, commerce, construction, education, manufacturing and transport, for example, with an interest in several areas including productivity, quality and value. We are a focal point for the exchange of ideas and best practice in this field. There is a global context for value management (VM), and all G8 and several G20 countries have a professional membership body.

In the UK we are now seeing greater government acknowledgement of the importance of VM.

In the UK we are now seeing greater government acknowledgement of the importance of VM. The government is seeking to drive greater value and reduce costs but in an informed way - not just cutting costs without understanding the effects on the public purse. VM can greatly support these challenges and we know it delivers. I was pleased that the government’s new Construction Advisor, Peter Hansford, has highlighted the need for public sector projects to demonstrate whole life value and he recently outlined this in an article for the IVM’s Value magazine (PDF 699.6KB).

Whether public or private sector, I find that all our clients are facing the challenge of how to be competitive and to demonstrate to their shareholders and funders they are maximising the potential of their businesses and demonstrating value for money on their projects. To help achieve this, I’d like to see more clients demanding best practice in value management, reinforced by mandatory professional accreditation.

I’d like to see more clients demanding best practice in value management, reinforced by mandatory professional accreditation.

I want to see more accurate information about VM permeating industry as a whole. There are a lot of misconceptions out there. We see clients thinking they’re getting VM, consultants claiming they ‘always do it anyway’ (which usually indicates cost cutting and nothing else) as well as general misunderstanding about what VM is and isn’t.

VM uses a combination of concepts, methods and techniques to create sustainable value for both organisations and their stakeholders. A really important point is that VM is not all about cost cutting and it’s not a project delivery tool. It’s actually a business definition tool and this is what it does:

  • VM helps clients to structure their business cases
  • Enables clients to identify, challenge and structure their objectives
  • Separates needs from wants
  • Uses tools for optioneering, maximising value and demonstrating value for money
  • Identifies benefits that improve the bottom line and deliver the business case
  • Provides lessons learned, for continual improvement.

One step that clients can take is to ask that VM practitioners are professionally qualified as Professionals in Value Management (PVM). At the moment the UK is lagging behind in demanding this. In Singapore, for example, this professional accreditation is required on public sector projects. In the UK the government currently recommends the Management of Value (MoV) course but this is a lower level qualification than the Europe-wide PVM.

Increasingly Faithful+Gould’s focus is on realising best value on a whole life value (WLV) basis...

Faithful+Gould is a corporate member of the IVM and has professionally qualified staff with the European recognised qualification in VM. We’re also active in the US, Middle East and Asia Pacific VM arenas. In the US the Faithful+Gould team includes members that are Certified Value Specialists (CVS), SAVE International qualified and some who are also PVM qualified. The Middle East demand has become much stronger in the last two years, with VM driven by project management office (PMO) requirements, where training an organisation’s staff and supply chain is a vital component, leaving a legacy of best practice. We continue to work on several such commissions.

Increasingly Faithful+Gould’s focus is on realising best value on a whole life value (WLV) basis using our VM and value engineering (VE) methodologies, integrated with strategic asset management (SAM), sustainability and knowledge management. We have managed the VM/VE process on major projects and programmes worth in excess of £16 billion and delivered savings of over £2 billion without affecting functionality. We are currently using WLV in several areas.

During my leadership of the IVM I hope to spread the word on the benefits that can be realised in both the public and private sectors through the use of effective VM. I’m also keen to gain further recognition of the Institute with the government, government bodies, educational institutions and leading private sector clients. Finally I hope to grow the IVM membership and to reinforce the Institute as the centre of excellence for all VM matters in the UK.