achieving high value programs and projects by managing the whole value improvement cycle
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ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE. Michael Thompson for Martyn Phillips The TEAM FOCUS Group. Purpose. - PowerPoint PPT PresentationTRANSCRIPT
Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
Need for Change
Alternative needed to “Get Fixed Quick”
“Continuum” approach rather than “Intervention”
Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
ContextStakeholders
•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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
Value AnalysisValue AssuranceValue Control
Value EngineeringValue ImprovementValue Planning
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CSVA 2006 – Improved Value and Decision Making
Focus Quite often, a key piece is missing but the
project proceeds regardless……..
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CSVA 2006 – Improved Value and Decision Making
Focus
Unambiguous Unambiguous strategic strategic directiondirection
Selecting most Selecting most appropriate appropriate conceptconcept Optimising Optimising
functionalityfunctionality
Reducing Reducing development development timetime
Balancing capital Balancing capital and whole life and whole life costscosts
Rescuing stalled Rescuing stalled project / programproject / program
Optimising Optimising ongoing processongoing process
Assuring best Assuring best value, managed value, managed risk and value risk and value improvementimprovement
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CSVA 2006 – Improved Value and Decision Making
Needs Assessment
Needs Assessment
Value Engineering
StrategicPlanning
Concept/Feasibility
Outline Design
Detailed Design
Construction & Commissioning
Close Out
Operations & Maintenance
Tech
nic
al Le
vels
Man
ag
em
ent
Levels
Concept Engineering
Concept Engineering
Functionality / Fit for Purpose
Functionality / Fit for Purpose
Risk & Value Management
Risk & Value Management
On-Time, On Budget, Delivery
On-Time, On Budget, Delivery
Continuing Improvement
Continuing Improvement
Value Engineering is a very powerful tool –But it floats in space!
Improved Value & Decision Making: CSVA Conference 2006, Toronto, Canada
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CSVA 2006 – Improved Value and Decision Making
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 expectations / results gap closed
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CSVA 2006 – Improved Value and Decision Making
Value AssuranceStage 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 Proposals6. Selection, Integration & Planning
Stage III – Consultation & Approval to Implement
7. Interim Read-out & Feedback8. Broad Stakeholder Consultation &
Fine Tuning of Proposals9. Recommendations & Approvals
Stage IV – Manage the Change10. Familiarization of Implementers /
Training of Users; Handover Package11. Briefing of other Parties and “Buy-
in”.12. Implementation, Monitoring,
Reporting & Adjustment
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
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
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CSVA 2006 – Improved Value and Decision Making
What It All MeansGet 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
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CSVA 2006 – Improved Value and Decision Making
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?
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CSVA 2006 – Improved Value and Decision Making
We have!
Value Assurance and Continuing Performance
Improvement
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CSVA 2006 – Improved Value and Decision Making
Questions
Feedback
The TEAM FOCUS Groupwww.teamfocus.org
Martyn Phillips46 Pineridge Crescent St AlbertAlberta, T8N 4P4CanadaTel: +1 (780) 460 – 1625Email: [email protected]
Michael Thompson44 Hardy Lane ChorltonManchester, M21 7LAUnited KingdomTel: +44 20 7871 4568Email: [email protected]