Value Management in Design and Construction - Case Study Example

Introduction The aim of this study is to identify and realize the authenti and appropriateness of the new construction proposal submitted by TechWatt Corporation. As a fast growing IT company dealing with the software and hardware systems, TechWatt Corporation has been looking forwards for some expansion lately in the regional grounds. For the same reason, TechWatt Corporation has proposed to establish a new regional Headquarters, funds for which, of about '5M, have already been allocated. With this in mind, here is an endeavor to assess the whole project with the view point of the value management, while also reassessing with the risk management point of view. Principal Details The company would be required to present before the attendees of this workshop with the bits of details about the project, such as the budget, pre-requisites, aims and the likes of it. This will help the attendees to understand the following arguments and requirements for the success of the project in a much better and elaborated manner. While the site for the same is yet to be decided, taking a peep at the various factors that might, in effect, make for the success of this project will help understand the project better. The project is targeted, apart from enhancing its regional presence, to make it easier for the customers and clients to approach the company. The project is focused at incorporating some of the important features like tour facilities for the prospective clients, giving a peek view into the kind of services and technology employed by the company. Secondly, the headquarters would provide office accommodation to over 12 staff members, recruiting the same for management and administrative purposes. Thirdly, it will also have an inbuilt workshop for the hi-tech light manufacturing processes, which will have another of 15 or more staff members recruited under head. Study 1 Value Management and the Project While the foundations of the project do aim at solving the purpose behind the formulation of regional head quarters, it is essential here to examine a few factors that might help enhance the project and its establishment even better. The project has been allotted a set amount of funds. For the project to succeed, while the deadline is important, it is also of value for the project to remain within the boundaries of the set budget. In order to do the same, scoping of the whole project comes in handy, and that is what we will be doing here, as a part of the value management service. It needs to be seen if the project being offered by the company will in truth be able to come to terms with the reasons being cited for the project. Secondly, it also needs to be ascertained, if there are ample resources that can make the project successful in terms of requirements. To do the same, there is a "Job Plan" that will exploit various aspects involved in the project that are required to be referenced when discussing the project in general. Job Plan Dividing the whole process of value management to identify the strengths or weaknesses of the project will help the reader gain a better grounding of the whole scenario. Further, in this pre stage, the company managers would be required to understand, identify and explain to all involved the importance of the project, along with the aims that the project is trying to achieve. With detailed information and analysis, the people involved will be able to get a brief idea of the way project is to proceed, hence, enhancing the general output by those involved in the project. The Job Plan can be divided into four main stages - information gathering, alternative generation, evaluation and conclusion. Information Gathering In this first step, the need to identify all the requirements for the project will be looked into. Before beginning with the project, the company would be required to identify a location or site, keeping in mind the budget for the project. Once the site for the headquarters is identified, the next process of building the project would begin. This next process would require a few more materials for the proceedings of the project, such as the construction materials. A set of specialized workforce will be imperative in order to combine the concept with the deed, to bring forth the building of the headquarters altogether. Starting from the design or conceptualization to the last bit of interiors, the work force and materials required for all would be accounted for here. Alternative Generation While the essentials for the project are identified, what is to be ascertained is if the TechWatt Corporation is in need of this project or not. Why should the company go ahead with the building of another regional headquarter' What are the alternatives for the suggested project' What alternative materials can be used in the project' Alternative 1 - An alternative to the present situation is to expand the company's functions in its present area of residence itself. Alternative 2 - Making full use of the resources for the project, multi-tasking for the people and labor involved are a few other factors that will add value to the project. Evaluation The project has been assigned '5M. If the company arranges to go for an alternative option, that of expanding its functions in the present workplace, instead of building a new headquarters in a new region, it will definitely help save the company with lots of funds. However, in such a scenario, the whole point of establishing itself in the region in question will get completely lost. This might also affect the company's market share, by reducing the number of clients that the company might have bagged by establishing themselves in the region of consideration. The company's coverage area will be confined that might risk reaching a saturation point after some time, even after the company expands. On the other hand, if the company furthers with the project in question, it is sure to become a success, entitling the company with better services and management. It will be able to provide its services to the new clients from around the region (of consideration), increasing their market share. In addition to this all, the clients will have a better outlook of the company and the services offered (due to the presence of workshop of services offered by the company in the new headquarters). The whole project, if conducted well, will surely be an absolute success. Secondly, making use of the alternative 2 will help the company keep the budget for the project under wraps, getting the work done for ten people by five. Findings and Discussion From the above evaluation and consideration, we come to a conclusion that the project offered by the company will be the best option for the company to explore at the moment. The materials to be used in the building should be used with utmost care and be given under the management of the manager well versed and practiced in Resource Management. However, only the value management will not help the project substantiate for itself. There is also a need for risk management to evaluate the whole project in order to realize whether the project, once initiated will have a scope for development and success. It is important to identify the threats that await the project and charting out the strategies that will be helpful in combating these threats. Following this is the second part of the whole study. Study 2 Risk Management Under this section, all the threats from the various segments such as environment, technology, humans, organizations or politics are to be identified, while also researching a few alternative strategies to face them. Secondly, it is also important to find out ways to minimize the affect, if any, of these threats the project might face in future. For the same, this study will be divided into four major sections - Risk Identification, Risk Assessment, Risk Abatement and Risk Avoidance. Risk Identification The project in question can face risks from any of the segments like environment, technology, humans, organizations or politics. Environment The Resource Management Act 1991 maintains that no such activity is to be undertaken by the construction managers that might cause harm to the environment in any way. This includes wasting of the resources (land, water, mineral). Technology Scenario 1 - Failure of the technological institutions at the time of the project construction might delay the whole process, eating up on valuable resources (human, time), while also overdoing the project costing. Scenario 2 - A use of wrong technology might lead to the situation where a redoing or undoing might be required. This will again, enhance the time and budget limit of the project, leading to a total management failure. Humans Any conflict that might arise amongst the human resources might add a risk to the whole project in terms of delay or further recruitment of another task force. This might affect the project in adverse. Organizations and Politics Local organizations and politics play a key role in the construction, especially large constructions, in and around the locality. For the same, these organizations, fuelled by the allegation put on the company's project by a local rivaling company, might adversely create friction. This might affect the project. A more powerful politics player can even lead to the complete shut down of the project. Risk Assessment While the risks have all been successfully identified, it is important to assess them and mark them in accordance to their severity. Politics would come as the first option in the risk factors, while technological threats will come as the next big threat to the project. Abating these two threats or finding a way to dealing with these threats when and if they arise will help any project to continue without any major problems. Next in line would be the human resource threats, launching the whole project in a fiasco if not handled properly. Lastly, the environment would be required dealing with. While the penalty is stringent when it comes to violation of the Resource Management Act 1991, the probability of the same happening is extremely low. However, one can not completely chalk out the threat from our supposing charts. Risk Abatement Now that the risks are all identified and numbered in terms of their enormity, the time is to find a solution to these, in case of stemming up. In case there arises any friction amongst the local authorities, politicians or organizations, the best way to overcome the situation is by attending to them in person, sending the best officer or manager on board, equipped with all the information about he project and the gain that the community will have. The technological issues can only be solved by keeping a regular tab on the use of technology, understanding the function of technology in question, having a complete pros and cons information on the same. While these might act as precautionary measures, once the damage has been done, it is bets to consult an expert and seek his advice as to the redoing of the damage. Careful manipulation and restructuring might help recover some of the damages. In case of the ensuing of a threat via the human means, in terms of withdrawal by the work force, friction amongst the work force as such, there would be required some excellent managerial work involving manipulation and planning to be done. For environment, paying the penalty and keeping the sections in mind for future references would be the best possible option. Risk Avoidance While we have identified and found solution to the various risks or threats to the project, it is extremely important to walk the precautionary shores from the beginning. For the same, measures like keeping the politicians updated on the project, remaining cordial relations with them will help abate the threats from the political quarter at all. Similarly, keeping an advance check on the kind of technology being used, its functions, best usage etc will inhibit the arising on situations from the technological quarters. These are some of the precautionary measures, while there can be many more. Simply keeping oneself updated about the possible threats and their precautions will save one from a lot of headache later onwards. Findings and Discussions It is extremely important to evaluate each stage and the progress in order to keep up with the schedule and the budget. It is these requisites that will make for the value of the project, fulfilling the aim of this entire study. While the project starts, optimal design should be created, keeping in view the budget, so as to not exceed the value allocated with the project. Next in line would be proper or optimal implementation and use of the resources involved in the project. Using every resource with utmost caution, while reminiscing about the ways the product can be used, will not only help minimize the overall costing of the project, but will also enhance its total project 'value' in turn. While resources do refer to materials involved, they also cover the human resources in the project. Multi-tasking will enhance the value, while cutting down on the costs elaborately. All people involved, especially the managers, in their particular set of function require analyzing their set of function and their proceedings, identifying whether they are in sync with the project stages and development or if need be, the changes required in order to improve the functioning. If all happens in accordance with these pre-defined presets, the entire project is sure to become a success. References Capital Management Branch, State of Victoria (last updated: June 8, 2007). Value Management. Extracted from: http://www.capital.dhs.vic.gov.au/capdev/PlanningEvaluation/ValueManagement/ Institute of Value Management (2001-2006). What is Value Management. Extracted from: http://www.ivm.org.uk/vm_whatis.htm John Kelly, Steven Male (1993). Value Management in Design and Construction: The Economic Management of Projects. Taylor & Francis J. Jerry Kaufman (1998).Value Management: Creating Competitive Advantage. Thomson Crisp Learning Michel Crouhy, Dan Galai, Robert Mark (2000). Risk Management. McGraw-Hill Professional Neil Crockford (1986). An Introduction to Risk Management. Woodhead-Faulkner NSW Government Asset Management Committee (GAMC). Value Management: Assessment and Decision Tools. Sydney. Extracted from: http://www.gamc.nsw.gov.au/tam/default.asp'PageID=84 Steven Male, J. Kelly, S. Fernie, M. Gronquist, Fernie Scott, G. Bowles (1998). Also Heriot Watt University. Value Management: A Good Practice Framework for Clients and Pracitioners. Thomas Telford. Read More