Value Management for Efficient and Cost-Effective Refurbishment - Coursework Example

Introduction Over a long period of time, there had been a significant increase in costs construction industry such as buildings, community projects and installation of IT systems in various constructions to an extent that the cost were almost doubling. This had been attributed to increases in the prices of material, costs of labour, and advancement in technology. In order to accommodate these increases in costs the designers and owners were forced to increase their budgets in order to harbour these trends. These increases in prices have also been attributed to other factors such as loss of affordable and cheap energy due to energy crisis evidenced in the world. For project stakeholders to identify opportunities for maximization of the project’s essential elements while at the same time evaluating value, addressing issues on finance, lessening the cost of project cycle, and reducing unnecessary wastes, value management act as an effective tool. Value management which is at times referred to as value analysis involves an organised and a creative approach with the aim of optimizing the costs of the life cycle and performance of a facility, system or a building. Value can be defined in four perspectives; exchange, cost, use and esteem (Dell'Isola 2004). The Scottish courts service (SCS) is on the move to adopt a program on the entire court estate refurbishment in order to modernise the court through addressing of issue of IT. IT refurbishment involve changing some components of existing systems in IT infrastructure with an aim of improving technology and at the same time saving money through reduced costs and reduction of hazardous wastes in the environment. This calls for value management for efficient and cost effective refurbishment (Interserve 2012). Value management Most of the times the terms value management, value engineering and value analysis are used interchangeably although they slightly differs in their application. Value management involves definition of the actual meaning of a value in a certain context with a clear and steady statement of objectives while ensuring that there is consistency of the objectives with the solutions. Value engineering involves achievement of functions that are defined at minimum cost. As value management is concerned with the question on ‘why’, value engineering involves questions on ‘how’. However, these two terms are treated as similar. Value management is regarded as a distinct approach in management that brings together the following components into a single framework; the style of management, positive dynamics of human, effective tools and methods, consideration of internal and external environment (Hammersley 2002). Refurbishment of the SCS in addressing IT issues has the main aim of achievement of the best value in terms of the money used in this project. In addition there is also a need of having a modernised system with improved technology while at the same time focusing on the value of money used. This can be regarded as innovation. These factors are very essential while we consider the rising inflation and funding cuts in current world. Thus, value management and engineering are techniques that will give an insight of what is really essential in improvement of the value of SCS refurbishment (Tidd et al 2005). In the process of obtaining the value of money used and encouraging innovation at the same time, value management can be used effectively in our case in the IT refurbishment. Given that the IT systems has been existing in SCS and the main aim is modernisation, these systems cannot be disposed but they can be refurbished through addition of hardware or software that will enable the required technology such as video evi. The process of installation and control of these devices will require computers. Although there is existence of computers in SCS, they may be lacking the required hardware and software to support the information handling system. This does not mean these systems cannot be improved. To address the IT issues in a cost saving and in an efficient way, value management must be applied. This can be achieved through dealing with big player of computers such as dell, HP, Toshiba and others in order to obtain the additional specification required to address the IT issues. These players have computers or other devices to work with computers that are refurbished in a way that they support such IT requirements. This means that the players will supply the required refurbished hardware and software that will support the required modernised system in SCS. These refurbished products will serve the required purpose efficiently at lower cost but attaining the required level of technology. Through this, SCS will be able to address the issues in IT with the best value of money and by achieving their objectives through value management (Dell'Isola 1997). As SCS adopts the idea of refurbishment, it achieves a good value through value engineering techniques. This is achieved through avoidance of unnecessary cost which may result to poor value through various factors which include; lack of information, changes in the requirements of the owner which is the concerned department, lack of ideas, lack of coordination and communication, outdated specifications and standards and attitudes and habits. Lack of information in this case may refer to lack of knowledgeable people about the information of the required refurbished products and processes within the required range on cost. Also, lack of ideas may lead to failure in development of alternative solution especially in the government controlled structures like SCS which may to taking the first workable solutions of buying new products without consideration of cost (APM 2012). There are also temporary circumstances such as urgent decision making under the influence of some people in the government leading to unnecessary costs in refurbishment. In addition to decision made under influence, senior management may make decisions based on believes rather than facts such as believing the refurbished products are fake. This may also lead to unnecessary costs. Attitudes and habits make people to do things in the same manner, same thing, and in same conditions such as running the government projects the same way they were run thus wasting an opportunity for saving cost on ground of habits. Lack of coordination and communication is the key to unnecessary costs. In order to open chances such as opting for refurbishment of IT systems, value engineering will lead to opening of channels of communication and environment of listening which a the best way of providing a project based on cost reduction and innovation. Government projects have been on the forefront in using standards on construction that are way too old. With advancement of technology, and increase in expenditures there is a need to look for ways of innovation using the minimum costs possible which is enhance through such as refurbishment project. It is through the poor value that are contributed by the factors above that provide opportunities that require application of value engineering though improved decision making (Dell'Isola 2011). Value management opportunities Value engineering processes helps in identification of opportunities. Through these processes, it will be possible to identify the return estimates through consultation services, services of value study, and value method training. Identification of these opportunities will help the government, administrators, engineers, managers and various personnel to attain the refurbished project highest return. Some of these opportunities obtain from services identification include increase in profits in both the providers of the refurbished products and the government as the expenditures on costs are reduced on both side. At the same time, the efficiency of the refurbished project is increased through innovation at lowest costs possible. Refurbishment of SCS also creates a large potential return to the management with removal of communication roadblocks through resolution based on best value and technology. Through value analysis, the stakeholders such as dealers, the government and contractors have the opportunity to maximize most essential elements for the refurbishment project, lessening the costs on the life cycle of this project, addressing financial issues, reducing hazardous wastes of the computer products which have been refurbished and reduction of costs that are unnecessary. This proves the efficiency of value management in SCS refurbishment project as costs are reduced with achievement of the required technology and maintenance of environment through prevention of electronic wastes (SAMI 2010). Systematic approach value system The systematic approach to the value system of SCS is based on various key elements. Since the refurbishment of SCS is a public project, it involves the public in the program for total value management in order to focus on the value gains that are essential to the public. The initiatives of the SCS refurbishment should also result to the public’s practical benefits. Also, the approach involves consideration of various options in order to enhance value, assess the potential gains and realism in the real world and put more focus on selection of initiatives that have a significant potential of increment of value and also impact the services provided by SCS. The approach also involves evaluation and monitoring of initiative results, documentation of what is workable and what does not for the entire public to be in a condition to access the benefits associated to the value that has been added by the initiative. Through this approach, SCS is able to deliver the results that are most valuable in addition to achievement of the best services to the public (Kendrick 1996). Value analysis process is also based on application of a work plan systematically through the following steps; preparation or orientation, information, analysis, creativity or innovation, monitoring, evaluation and implementation (Dallas 2006). Relevance of VM in strategic outline case (SOC) The SOC makes the project case and considering its minimum contents it comprises of the introduction of the issues or circumstances that resulted to the need of a certain project such as modernisation in our case study. Also, SOC contains project team definition in specific the responsible senior officer and the project stakeholders identification which in our case the stakeholders for SCS refurbishment project include the public, government and the contractors. The project mission is also essential in addition to functions that are responsible for the mission support. The contents also involve criteria for project evaluation upon completion and the existing systems that have been put in place which are also relevant to the project mission. It also involves the current systems gap analysis which in our case the gap analysis is the difference between the previous IT technology in SCS and the current one under implementation. It comprises of strategic brief formalisation and parameter setting in order to understand the project’s whole life value and understanding the options of the project that needs further investigation in a study on option appraisal. On approval of the strategic outline case of a business the studying on the options generates a variety of technical solutions to the mission of the project. These solutions are enhanced through application of value management (Royal Institution of Chartered Surveyors 2012). Recommendations Problems that arise from value management application can vary in nature. It is recommended that, for you to reach a successful process completion, you have to bear the following in mind; avoid making superficial and generalizations to preciseness every moment, collection, determination, and examination of all the costs that have been involved as cost consciousness will always provide possibilities of determination of the assessed value. Finally for effectiveness in value management, ensure you use information from the possible best sources (Kwanto 2010). Conclusion Value management involves an organised and a creative approach with the aim of optimizing the costs of the life cycle and performance of a facility, system or a building. Application of value management is very essential in SCS refurbishment project on addressing issues on IT as it achieves the aim of achievement of the best value in terms of the money used in this project. In addition a modernised system with improved technology is achieved while focusing both value of money used and the technology. Through value management, the stakeholders have the opportunity to maximize most essential elements for the refurbishment project, lessening the costs on the life cycle. References APM 2012, Value Management - What it is and how does it work? - An interactive day. Accessed on 20 April 2012 from: http://www.apm.org.uk/event/value-management-what-it-and-how-does-it-work-interactive-day Dell'Isola, A. 2004, Value Engineering Fundamentals - Project Scope & Budget. Construction Oriented Value Engineering Training Course, pp. 1-23. Dell'Isola 2011, Value Engineering for Cost Control. Accessed on 20 April 2012 from: http://www.amazon.com/Value-Risk-Management-Practice-ebook/dp/B0014TS2IS Dell'Isola, A. 1997, Value Engineering: Practical Applications...for Design, Construction, Maintenance and Operations. RSMeans publishers Dallas M. F. 2006, Value and Risk Management: A Guide to Best Practice, 1st edition, Wiley-Blackwell. Hammersley, H. 2002, Value Management in Construction, Association of Local Authority Business Consultants, Pp. 1-18 Interserve 2012, Scottish Courts Service, Edinburgh: Parliament House refurbishment, Edinburgh. Accessed on 20 April 2012 from: http://www.interserve.com/about-interserve/case-studies/487/scottish-courts-service-edinburgh%3Cbr%20/%3E Kendrick, J. 1996, Total Value Management Program. Accessed on 20 April 2012 from: http://www.p2c2group.com/Docs/value.html Kwanto 2010, Phase 2: Design: Value Management. Accessed on 20 April 2012 from: http://www.kwanto.co.nz/services/phase-2-design/value-management.aspx Royal Institution of Chartered Surveyors 2012, RICS draft guidance note - Value engineering and value management. Accessed on 20 April 2012 from: https://consultations.rics.org/consult.ti/value_engineering/viewCompoundDoc?docid=863924&partid=866900 SAMI 2010, Identifying Opportunities. Accessed on 20 April 2012 from: http://www.value-eng.com/services.htm Tidd, J., Bessant, J. & Pavitt, P. 2005, managing innovations: Value Analysis. Accessed on 20 April 2012 from: www.wileyeurope.com/college/tidd Read More