Systematic Approach for Making the Scottish Courts Service Value System - Case Study Example

Value Management Name: Course: Lecturer: Date: Value Management Introduction According to Kelly, Male & Graham (2004, p.206), value is a relation between quality and cost. Value must incorporate the dimension of time because time and cost work hand in hand in most projects. Value management in engineering is essential in obtaining good value out of investing in a project. Use of value management in engineering contributes in the elimination of waste, which reduces the overall costs. Value management defines the value of meeting the perceived need of the organization. Normally, value management takes place at the start of a project and determines a clear consensus regarding the project objectives and the way of achieving them. Value management is an organized effort that aims at analyzing functions of systems, facilities, equipments, supplies and services to achieve essential function. In addition, value management aims at achieving the objective at the lowest cost consistent, while being consistent with the necessary performance, reliability, quality, and safety. Thus, value management is vital in the overall project delivery and not a different entity. The responsibility of a project director is to ensure that effective value management gets implemented (Smith, Merna, & Jobling, 2006 p.52). Executive summary Various phases offer guidance in determining high cost areas in design and developing alternative solutions for consideration. These phases include information phase, function analysis phase, creative phase, evaluation phase, development phase, and presentation phase. The information phase offers information relevant to the study. The information is collected, disseminated, and analyzed as needed. In value management, the team has to provide a design review of various systems and it includes an overview of the project together with its operational requirements. This further enhances value management knowledge and comprehension of the project. Function analysis separates value management from other improvement practices. In this phase, functions get identified and classified as basic or secondary. Components are then scrutinized in terms of function, and results created by function analysis are assigned cost and other measurement criteria. Components that have the potential of adding value are identified for consideration in the creative phase (Kelly, Morledge, & Wilkinson, 2002, p.35). In creative phase, a team develops and lists creative ideas for executing each function for the study. Participants in the project identify concepts that are capable of offering the required functionality. Within the evaluation phase, there is a systematic reduction of ideas from the creative phase to few concepts that can meet the project objectives. Potential alternatives then get evaluated according to their perceived advantages, benefits and risks. A weighed criterion gets developed to assess the potential alternatives with each idea given a rating number. In the development phase, there is selection and preparation of the best alternatives capable of improving value. These alternatives are built up to viable, cost-effective and efficient proposals. In the presentation phase, the team presents its recommendations to the management of Scottish Courts Service (SCS) (Dallas, 2006, p.1). Opportunities of Value Management in the development of the project Since the Scottish Courts have numerous policies and directorates, there is a vast opportunity to enhance value management by focusing on the role of these policies and directorates. The Scottish Courts services values commitment, professionalism, provision of quality service, integrity, impartiality and effective use of resources. This is a clear match with the objectives of value management. Therefore, all programs and projects undertaken to enhance value management can benefit from these values. Such values present an opportunity for value management because they act as a way of fostering quality within in the actions of the court directorates. The presence of the strategy and infrastructure directorate presents an opportunity for value management. This is because this directorate aids in performing information advice, monitoring legislative developments, managing programs, corporate planning, developing and maintaining Information Technology solutions. Such functions are essential in the development of programs and projects that encompass value management. Underlying value management is the principle that there are always many ways of achieving project objectives and examination of alternatives produces the most suitable conclusion. Central to value management is the analysis of functions from the perspective of a whole system. Function analysis identifies functions of components, and essentially what the components have to do to attain the required objectives. Through analysis of functions, duplication, wastage, and unnecessary expenditure get identified; thus, increasing the opportunity for improving value. Functional analysis not only allows value management to investigate the project brief but also it tests the assumptions and needs perceived. Taking a system wide view is particularly relevant in the construction industry, which has compartmentalised approach to design of facilities. The notion of value used in value management distinguishes the method from common methods of cost review. The concept achieves this through the consideration of relationship between cost, function, and worth (Smith, Merna, & Jobling, 2006 p.36). At a project level, value management is useful in resolving problems, generating stakeholder commitment, clarifying the cost of the whole life cycle, and aligning project functions to resources (Smith, Merna, & Jobling, 2006 p.57). Value management at a project level is planned on an integrated basis. This application offers a structure for identifying appropriate concept and design solution that reveals best value for money. This includes project activity stages and the expected value study outcome for the stages involved in the project. Value management offers the opportunity of understanding the needs and functions necessary in meeting those needs, and provides an increased definition of performance and quality standards. Moreover, value management reduces wastage of resources and improves operational efficiencies. Value management employs the unique combination of methods and concepts in creating sustainable value for organizations and their stakeholders (Kelly, Male, & Graham, 2004, p.3&4). Systematic approach for making the SCS value system Information phase Value management is a means of resolving problems. The activities in this phase fall into 2 categories, scope and logistics. Scope associates with the establishment of focus and bounds in value management. According to Kelly, Male & Graham (2004, p.207), the time, cost and quality triangle is a critical tool in value management workshops. It helps to elicit the value criteria of the client. In the information gathering phase, the value manager ought to elicit consensus from the team. This enables the value manager to assess the team’s value criteria in respect to cost, time and quality. It is extremely critical to assess which element (time, cost and quality) is most critical for the project to meet its outlined objectives. A value management workshop is vital in this stage in order to agree about the value of the system or project. The value ought to be sufficiently explicit for the design team to understand its meaning (Kelly, Male & Graham (2004, p.207). The value manager must play a key role in bring the team into line with respect to a common perception of a client’s value system. Paired comparison can be a useful technique for differentiating between the variables. The team must identify the components of a full value system which include time, capital cost, and operating cost, and environment, monetary value of project, flexibility, esteem, comfort and politics. Core activities in logistics involve identifying and gaining commitment of stakeholders, arranging venue and distributing consolidated background material. The information phase offers the opportunity of exploring the project rationale, scrutinised from a functional point, with the intention of searching for substitute solutions to offer the best value for money to the client (Kelly, Morledge, & Wilkinson, 2002, p.40). Function analysis phase In this phase, functions are identified and analysed and concentrates on function, cost and worth of the functions. There are developed techniques for identifying and analysing functions such as functional hierarchies and function Analysis System Technique. The techniques begin with a global function of the system and then extend to certain functions of individual components. The techniques offer basis where alternatives are generated and evaluated to eradicate, or combine functions in order to ensure compatibility between the whole system and functions in the system. Since the project entails building an IT system that comprises many parts that serve a common function in SCS. In the building there are various sub-systems (Smith, Merna, & Jobling, 2006 p.43). Ideas/options phase Value study produces alternative ideas for achieving value improvement. This phase encourages lateral thinking to produce many possible ideas. There are various ways for facilitating idea generation and the methods rely on the number of people and nature of the project. In project terms, several parts of the project need to be specifically targeted for idea generation such as the space in buildings and security systems (Kelly, Morledge, & Wilkinson, 2002, p.41). Evaluation phase Each generated idea requires thorough consideration by the group and decisions taken regarding the ideas to be evaluated in depth. Ideas are to be evaluated based on of advantages and disadvantages they offer the project with regard to value improvement. Since time in the project is critical, it may be late in the development process to execute change. Normally, majority of ideas are retained for a thorough evaluation. A range of evaluation tools assist in the process of evaluation. For instance, evaluation matrices are useful in determining the relative priorities in a list of goals or project criteria. The matrices are crucial in considering issues and objectives in early stages of project development. The ideas with the highest potential are developed to prove if they can work. The extent of option development relies on the duration of the workshop. For instance, a 3-day workshop may allow the team to make final decisions regarding the adoption of the available options (Kelly, Male, & Graham, 2004 p.147). Action plan The action plan offers a consensus of views of the participants and points out ideas that represent highest prospect for value improvement. Usually, action plan is the subject of presentation to the client including senior management. The plan identifies targets for every item and appoints people responsible for pursuing the items and reporting. Ultimate success relies on the effort of used in pursuit of the action plan. The action plan includes elements such as the list of activities to be performed, indication of time frame, identification of people responsible for every activity, and specifying the finalisation date. In this phase, involvement of the client in co-ordination activities is crucial (Kelly, Morledge, & Wilkinson, 2002, p.42). Analysis and reporting Reporting requirements vary considerably according to project stage, where the value management study is undertaken. Since the value management is to be undertaken early in the project, the requirement for reporting will be substantial. The rationale behind this is illustrated by examining 2 common phases where studies of project-based value management are undertaken. One such study is the strategic or concept study that deals with multiple factors and issues. This study establishes the project framework, direction and rationale; thus, reporting has to document relevant issues in the project. The relevance period of the reports, equate to benchmark, which continually monitors the project accomplishment of its objectives. The other study is the 30%-35% design development studies that are concerned with design performance. The study identifies various options for meeting the functional requirements (Kelly, Morledge, & Wilkinson, 2002, p.43). Relevance of value management activity Strategic outline establishes the case for change and the necessity to invest and provide a suggested way forward. Consequently, it offers initial agreement for proceeding with the scheme. The preferred way forward in a strategic outline case is not similar to the preferred option in outline business case. In strategic outline case, the preferred way offers management the recommended direction of travel. The preferred option in outline business case is the recommended choice after detailed appraisal. Strategic outline case states the necessity of the project and comprises of an introduction to the circumstances that pave way for the project, identification of stakeholders and criteria for assessing the project upon completion. Strategic outline business case determines if an investment is necessary either now or in future. It demonstrates the case for change, which includes a clear rationale for investment and how the investment furthers the objectives of an organization. Strategic case offer emphasis for proceeding with the project at early stages, as well as short listing options. Strategic case specifies the need for a business to accept a project. Moreover, it states the needs to be met by the project. These are often put in a context through examination of existing arrangements, which are used to draw the investment aims. Then the investment aims are assessed against the necessity of the organization and what it needs to achieve. Establishing the case for change, as well as strategic fit is an iterative process that is always supported by strong evidence like the identification of risks and constraints. Consultation with main stakeholders is essential in identifying the aims (Kelly, Morledge & Wilkinson, 2002 p.34). Opportunities of value management When value management is done properly, it can achieve the most cost effective alternative. Value management is the best way to achieve both performance and capabilities at an optimum price; even though, it does not always mean cost reduction. Value management develops conceptual alternatives during design or cost reduction efforts. The use of value management is essential in meeting statutes and regulations. Value management efforts can result in cost saving, which makes it possible to use the saved resources in a good way. Moreover, value management offer support to management, since it represents an investment for the future because benefits of value management may not be realised immediately. In addition, value management establishes management structures for providing continuity (Smith, Merna & Jobling, 2006 p.52). Recommendation Value management has the potential of improving value for money in infrastructure projects. Adoption and acceptance of value management approach largely influences the degree of success. According to Male, Kelly et al (2004), there are 6 possible intervention points on value management. Generally, early approval of the processes delivers a huge potential to benefit. However, having clients and professional advisors to comprehend this is a big challenge for the promoter of the process, especially if the individual is down the supply chain. Competition for scarce resources like time and funding at the theoretical stage necessitates the education of clients to be able to buy into value management. Many texts explain the benefits of value management. Value management is core to project procurement and focuses on shared knowledge, information, and skills to deliver excellent value outcome in the end and whole life cost (Smith, Merna, & Jobling, 2006 p.9, 10). Value management formalises business planning as well as management processes. As well, value management gets strategic issues to the open, and forms positive business and interpersonal relations. Moreover, good ideas focus on the value for money and changes preconceptions (Dallas, 2006 p.2). List of references Dallas, M. (2006). Value and risk management a guide to best practice. Oxford, Blackwell Pub. Kelly, J., Male, S., & Graham, D. (2004). Value management of construction projects. Oxford, UK, Blackwell Science. Kelly, J., Morledge, R., & Wilkinson, S. (2002). Best value in construction. Oxford, Blackwell Science. http://site.ebrary.com/id/10158553. Smith, N. J., Merna, T., & Jobling, P. (2006). Managing risk in construction projects. Oxford, Blackwell Pub. http://site.ebrary.com/id/10159088. Read More