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Value Management is all about: Organisational Improvement, setting clear goals, improving productivity, creativity and return on investment.
Value can be different depending on the individual or group of individuals whose needs are to be satisfied. For example, let’s take a bottle of water and explore what needs it may be aiming to satisfy. For some it may be as basic as helping to sustain life, for others it might be to avoid contamination (for example in some countries where water supplies are not as safe), enabling portability, providing refreshment etc.
In terms of Value Management, the concept of Value is based on the relationship between satisfying needs and objectives and the resources required to achieve them. The aim of Value Management is to reconcile all stakeholders’ views and to achieve the best balance between satisfied needs and resources.
Value Management is an underlining concept applied within existing management systems and approaches based on value and function-orientated thinking, behaviours and methods, particularly dedicated to motivating people, developing skills, promoting synergies and innovation, with the aim of maximising the overall performance of an organisation.
Value Management can reap huge rewards if it is applied robustly. Value Management is concerned with the creation of sustainable value, either at project, product, process, organisational or social level.
It is concerned with improving and sustaining a desirable balance between the needs and wants of stakeholders and the resources needed to satisfy them. Stakeholder value judgements vary, and Value Management reconciles differing priorities to deliver optimum value for all stakeholders.
Value Management is based on defining and adding measurable value, focusing on functional drivers and objectives before finding solutions, with the aim of enhancing overall innovation. It has four principles being; strengthening value orientation; applying function thinking; applying a structured holistic approach; and managing complexity, risk and uncertainty. These principles are supported by four drivers (levers) being; a collaborative style of managing; motivating positive human dynamics; considering both internal and external environments; and applying proven methods and tools.
Benefits of Value Management
Value Management can reap huge rewards as a concept, if the approach, related principles and drivers (levers) and proven methods and tools are applied robustly. Value Management is concerned with the creation of sustainable value, either at project, portfolio, programme, product, process, service, organisational or social level.
Value Management can, if applied effectively, deliver the following benefits:
- Value Improvements, in excess of 20%, including savings between 10 to 25%.
- Tangible returns on investment of between 20 and 40 times the resource commitment are not untypical.
- Significant benefits in terms of improved working relationships and organisational learning.
- Better business decisions, “right first time”, which can be supported by customers, users and other stakeholders by providing decision-makers with a sound, transparent basis for their decisions.
- Increased effectiveness by organising and using funds, time and resources to best effect, delivering better environmental, social, economic and financial outcomes.
- Enhanced competitiveness by facilitating technical and organisational innovation and resource efficiency.
- Enhancing communication and efficiency through multi-disciplinary and multi-task teamwork and focused collaboration.