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ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE

ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE. Michael Thompson for Martyn Phillips The TEAM FOCUS Group. Purpose.

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ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE

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  1. ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE Michael Thompson for Martyn Phillips The TEAM FOCUS Group Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  2. Purpose • To encourage use of Value Management as a systematic long-term process of analytical and innovative explorations that culminate in firm, tested proposals for business improvement. • To describe a VALUE ASSURANCE approach to achieving high performance and value Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  3. Topics of Discussion • Need for Change • Background • Context • Performance and Value • Different VM Approaches • Value Assurance • Conclusion Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  4. Questions • How many value practitioners find themselves being involved in a project from cradle to grave? • How many project teams consider it necessary to involve an external party to assist them with ensuring that high performance is achieved? Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  5. Need for Change • Alternative needed to “Get Fixed Quick” • “Continuum” approach rather than “Intervention” Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  6. Background • Management staff trapped in a world of tight timelines and high expectations • Dealing with fuzziness and uncertainty of needs and costs • Value supposedly built in – no formal processes • No universal agreement on value delivery Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  7. Context • Stakeholders • Widely differing needs and expectations • Return on investment and expected value not in line with business case • Project Team • Well intentioned undertakings often lead to costly overruns, disruptions to service • Often unaware of value expected from them Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  8. Context • Some examples of where it can go wrong: • Business people often absent during project development • Return on Investment criteria not evident, and therefore not necessarily attained • Key knowledgeable people are lost to the next critical project • Information may not be passed on and many assumptions may have to be made by the next wave of project personnel (no continuity) Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  9. Performance & Value Value determined not solely by the producer / promoter, but in concert with the customer / user. Not solely money Value includes: Aesthetics Functionality Ease of O&M Fastest time to market Sustainability Clients seeking to buy overall performance improvement, not just sequence of traditionally practiced project development activities Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  10. Performance & Value Receptive to new ideas Less defensive, broader thinking Think outside comfort zone End result not just more of the same Ownership to ensure change process delivers expected results Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  11. Different VM Approaches • There is often confusion over the several, various value terms, e.g. • It is of no surprise that expectations of value improvement and what it can do can differ considerably • The traditional VM process does not always fit comfortably within the mode of operation of 21st century business activities Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  12. Focus • Quite often, a key piece is missing but the project proceeds regardless…….. Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  13. Focus Selecting most appropriate concept Unambiguous strategic direction Optimising functionality Assuring best value, managed risk and value improvement Reducing development time Balancing capital and whole life costs Optimising ongoing process Rescuing stalled project / program Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  14. Value Engineering Management Levels Technical Levels Strategic Planning Concept/ Feasibility Outline Design Detailed Design Construction & Commissioning Close Out Operations & Maintenance Needs Assessment On-Time, On Budget, Delivery Functionality / Fit for Purpose Continuing Improvement Concept Engineering Risk & Value Management Value Engineering is a very powerful tool – But it floats in space! Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  15. Value Assurance VALUE ASSURANCE PROGRAM Pro-active and holistic approach Ensures expectations / results gap closed The umbrella term that ensures and demonstrates the effectiveness of many other management processes Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  16. Value Assurance • Stage I – Initiation & Analysis • Mandate, Scope, Opportunity etc. • Stakeholder Expectations and Criteria, Needs Assessment, Communications Plan • Project Metrics and Base Case Performance vs. Requirements • Stage II – Exploration & Potential Options • Input Summaries, Innovation & Judgement • Development & Testing Proposals • Selection, Integration & Planning • Stage III – Consultation & Approval to Implement • Interim Read-out & Feedback • Broad Stakeholder Consultation & Fine Tuning of Proposals • Recommendations & Approvals • Stage IV – Manage the Change • Familiarization of Implementers / Training of Users; Handover Package • Briefing of other Parties and “Buy-in”. • Implementation, Monitoring, Reporting & Adjustment Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  17. Conclusion • The outcomes of programs, project, products and services vary significantly • Success is a relative term and its measurement varies greatly • Dictating factors include: • Overall management approach • Culture of an organization • Most value enhancement gains are made through strategic decisions, in conjunction with stakeholder input Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  18. Conclusion • A holistic Value Assurance approach can address the various issues through a comprehensive, integrated guiding approach to derive optimal performance • Maximum effectiveness requires completion of the whole program, rather than the commonly observed ad hoc “interventions” • To attain these benefits, diligent planning, senior managerial support and follow-through are required Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  19. Real Life • We were recently invited to undertake a 3-day VE study for a high profile multi-storey building (not in the UK) including all preparation time, workshop time and presentation time • Objectives were to reduce capital costs by 35% • We considered it impractical to address a job of that magnitude adequately in such a short time scale • We declined! • We also find there is a high demand for “tick in the box” exercises which we prefer not to conduct Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  20. What It All Means Get away from what we have always done in the past Use a holistic approach throughout the life of a project Pay diligent attention to the 4 Stages and 12 Themes Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  21. A Final Thought • What if we had a smart system that: • Captures key learnings and project problems? • Allows corporate feedback to be incorporated in future planning? • Avoids the necessity of every generation to learn the hard way? • Avoids repeated costs for organisations and for Society? Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  22. We have! Value Assurance and Continuing Performance Improvement Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

  23. Questions • Feedback The TEAM FOCUS Group www.teamfocus.org Martyn Phillips 46 Pineridge Crescent St Albert Alberta, T8N 4P4 Canada Tel: +1 (780) 460 – 1625 Email: mphillips@teamfocus.org Michael Thompson 44 Hardy Lane Chorlton Manchester, M21 7LA United Kingdom Tel: +44 20 7871 4568 Email: mthompson@teamfocus.org Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada

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