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CSVA 2006 – Improved Value and Decision Making Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada 1 ACHIEVING HIGH VALUE PROGRAMS.

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Presentation on theme: "CSVA 2006 – Improved Value and Decision Making Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada 1 ACHIEVING HIGH VALUE PROGRAMS."— Presentation transcript:

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

2 CSVA 2006 – Improved Value and Decision Making 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

3 CSVA 2006 – Improved Value and Decision Making 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

4 CSVA 2006 – Improved Value and Decision Making 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?

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

6 CSVA 2006 – Improved Value and Decision Making 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

7 CSVA 2006 – Improved Value and Decision Making 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

8 CSVA 2006 – Improved Value and Decision Making Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada 8 Context 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)  Some examples of where it can go wrong: Business people often absent during project development

9 CSVA 2006 – Improved Value and Decision Making 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

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

11 CSVA 2006 – Improved Value and Decision Making 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 21 st century business activities Value Analysis Value Assurance Value Control Value Engineering Value Improvement Value Planning

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

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

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

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

16 CSVA 2006 – Improved Value and Decision Making Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada 16 Value Assurance Stage I – Initiation & Analysis 1.Mandate, Scope, Opportunity etc. 2.Stakeholder Expectations and Criteria, Needs Assessment, Communications Plan 3.Project Metrics and Base Case Performance vs. Requirements Stage II – Exploration & Potential Options 4.Input Summaries, Innovation & Judgement 5.Development & Testing Proposals 6.Selection, Integration & Planning Stage III – Consultation & Approval to Implement 7.Interim Read-out & Feedback 8.Broad Stakeholder Consultation & Fine Tuning of Proposals 9.Recommendations & Approvals Stage IV – Manage the Change 10.Familiarization of Implementers / Training of Users; Handover Package 11.Briefing of other Parties and “Buy-in”. 12.Implementation, Monitoring, Reporting & Adjustment

17 CSVA 2006 – Improved Value and Decision Making 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

18 CSVA 2006 – Improved Value and Decision Making 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

19 CSVA 2006 – Improved Value and Decision Making 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

20 CSVA 2006 – Improved Value and Decision Making 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

21 CSVA 2006 – Improved Value and Decision Making 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?

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

23 CSVA 2006 – Improved Value and Decision Making Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada 23  Questions  Feedback The TEAM FOCUS Group Martyn Phillips 46 Pineridge Crescent St Albert Alberta, T8N 4P4 Canada Tel: +1 (780) 460 – Michael Thompson 44 Hardy Lane Chorlton Manchester, M21 7LA United Kingdom Tel:


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