AS 4183—2007
Australian Standard®
Value Management
AS
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This Australian Standard® was prepared by Committee OB-006, Value Management. It was approved on behalf of the Council of Standards Australia on 13 November 2006. This Standard was published on 14 February 2007.
The following are represented on Committee OB-006:
• Australian Health Industry Inc • Australian Institute of Project Management • Australian Institute of Quantity Surveyors • The Institution of Engineers Australia • The Institute of Value Management, Australia • The Royal Australian Institute of Architects • University of Canberra
This Standard was issued in draft form for comment as DR 04443. Standards Australia wishes to acknowledge the participation of the expert individuals that contributed to the development of this Standard through their representation on the Committee and through public comment period.
Keeping Standards upKeeping Standards upKeeping Standards upKeeping Standards up----totototo----datedatedatedate Australian Standards® are living documents that reflect progress in science, technology and systems. To maintain their currency, all Standards are periodically reviewed, and new editions are published. Between editions, amendments may be issued. Standards may also be withdrawn. It is important that readers assure themselves they are using a current Standard, which should include any amendments that may have been published since the Standard was published. Detailed information about Australian Standards, drafts, amendments and new projects can be found by visiting www.standards.org.auwww.standards.org.auwww.standards.org.auwww.standards.org.au Standards Australia welcomes suggestions for improvements, and encourages readers to notify us immediately of any apparent inaccuracies or ambiguities. Contact us via email at [email protected]@[email protected]@standards.org.au, or write to Standards Australia, GPO Box 476, Sydney, NSW 2001.
AS 4183—2007
Australian Standard®
Value Management
Originated as AS/NZS 4183:1994. Revised and designated as AS 4183—2007.
COPYRIGHT
© Standards Australia
All rights are reserved. No part of this work may be reproduced or copied in any form or by
any means, electronic or mechanical, including photocopying, without the written
permission of the publisher.
Published by Standards Australia, GPO Box 476, Sydney, NSW 2001, Australia
ISBN 0 7337 8026 1
AS 4183—2007 ii
Preface This Standard was prepared by the Standards Australia Committee
OB-006, Value Management to supersede AS/NZS 4183:1994.
The objective of this Standard is to provide guidelines for the
application of Value Management to products, processes, services,
systems and organizations.
This Standard defines terms, establishes the essential elements of
Value Management and clarifies roles and responsibilities, but is not
specifically intended to be a handbook or training manual. A Value
Management Application Guide is being prepared for this purpose.
Where a Value Management Study is to be carried out in accordance
with this Standard, such a Study should be carried out by multi-
disciplinary groups with an independent Value Management Study
Facilitator. This Standard can however also be applied by individuals
in the normal course of their work.
NOTE: This Standard distinguishes between the terms 'Value Management'
and 'Value Management Study'.
iii AS 4183—2007
Contents
Page
Foreword.................................................................................iv
1 Scope and definitions
1.1 Scope............................................................................ 1
1.2 Definitions ..................................................................... 1
1.3 Applications of value management................................ 3
1.4 Links to other systems and processes .......................... 5
2 Guiding principles ................................................................... 6
3 Value management studies
3.1 Introduction ................................................................. 11
3.2 Prescribed work plan................................................... 11
3.3 Appropriate mix and commitment of group members .. 16
3.4 Management of value management studies................ 17
3.5 Senior management commitment and support ............ 17
3.6 Effective facilitation ..................................................... 17
4 Value analysts
4.1 Application .................................................................. 18
4.2 Prescribed work plan................................................... 18
4.3 Activities...................................................................... 19
4.4 Interface with value management studies ................... 20
5 Embedding value management
5.1 Organizational culture and processes ......................... 21
5.2 Enhancing value management culture ........................ 21
5.3 Building on existing practices ...................................... 21
AS 4183—2007 iv
Foreword Value Management is a structured and analytical process in which a
prescribed Work Plan is followed to achieve best value and, where
appropriate, best value for money in products, processes, services,
systems and organizations. The process may be applied to
management decision-making at any level of an organization and is
equally appropriate for public and private sector applications.
Both public and private sector organizations require value for money
to be achieved in delivery of services. By way of example, the
Commonwealth Procurement Guidelines state that value for money
is the core principle underpinning Australian Government
procurement.1
While Value Management can be applied in project and general
management within any organization to achieve best value or best
value for money, it is also a powerful process that may be used to
develop agreement, understanding and commitment when applied to
the resolution or optimisation of particular issues and situations.
Value Management Studies are centred upon a participatory
workshop involving a multidisciplinary, representative group of
people who work together and follow a prescribed work plan to
achieve best value or, where appropriate, best value for money. Five
essential elements in Value Management Studies have been
identified and addressed in this Standard. These elements comprise:
• a prescribed Work Plan;
• an appropriate mix and commitment of group members;
• management of Value Management Studies;
• senior management commitment and support; and
• effective facilitation.
The Standard also provides a prescribed structure and Work Plan for
individuals when using Value Management in day-to-day work.
This Standard recognizes international practice in adopting the Miles2
'Job Plan' approach (but expanded and called the 'Work Plan' in this
Standard). The term 'Value Analysis' was used when Miles originally
developed the methodology in the design and procurement of
existing products and processes. The term 'Value Engineering' then
became widely used as the application spread into engineering
fields, particularly in the early conceptual and design stages.
1 Commonwealth Procurement Guidelines are issued by the Minister for Finance and
Administration under Regulation 7 of the Financial Management and Accountability
Regulations 1997, which includes in Section 4 of Financial Management Guidance
No 1 issued January 2005, 'The Principle of Value for Money'.
2 Value Analysis concepts were developed during World War II as a result of the
forced adoption of alternative materials and methods, often with better value. After
that war, General Electric assigned Lawrence D. Miles to develop a methodology
that would again produce the same result.
v AS 4183—2007
While the terms 'Value Analysis' and 'Value Engineering' are still in
use, this Standard uses the term 'Value Management' for the
application of the 'Work Plan' at all levels.
This Standard recognizes the technical and cost-reducing focus of
traditional Value Analysis and Value Engineering and also
recognizes the more collaborative, inclusive focus on establishing
core values and commitment to agreed outcomes.
AS 4183—2007 vi
NOTES
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1 Scope and definitions
1.1 Scope
This Standard sets requirements for the use of Value Management
independent of the specific industry or economic sector in which it is
applied. The application of Value Management will be influenced by
the varying needs of an organization, its particular objectives, its
products and services and the specific processes and systems
employed.
This Standard may be applied at any point in the life of a product,
process, service, system or organization but the maximum benefit is
usually obtained by applying Value Management as early as
possible. Often, a number of discrete Value Management Studies
are carried out at different points in the life cycle.
1.2 Definitions
For the purpose of this Standard, the definitions below apply.
NOTE: Where defined terms appear in the text, they are italicized.
1.2.1 Basic function
See essential function.
1.2.2 Entity
That product, process, service, system or organization (or part
thereof) to which Value Management is applied.
1.2.3 Essential function
What an entity must do.
NOTE: This is sometimes referred to as a basic function or primary purpose.
1.2.4 Function
What an entity does.
1.2.5 Function analysis
A structured process that identifies, describes and analyses
functions, their interrelationships and, where appropriate, total costs
or total resources used.
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1.2.6 Study
See Value Management Study.
1.2.7 Study Facilitator
See Value Management Study Facilitator.
1.2.8 Supporting function
A function that supports an essential function.
NOTE: This is sometimes referred to as a secondary function.
1.2.9 Total cost
All appropriate costs of the entity.
NOTE: These costs may include those associated with the entity's planning,
acquisition, development, operation, staffing, consumables, energy,
maintenance and disposal. (Such costs may go beyond those attributed only
to the life cycle costs of the entity.)
1.2.10 Value
An attribute of an entity determined by the entity's perceived3
usefulness4, benefits5 and importance.
1.2.11 Value Analyst
A person who:
• is suitably experienced and competent in the principles and
practices of Value Management;
• applies Value Management in decision-making as an individual
in the normal course of day-to-day work; and
• has sufficient specialist knowledge and skills to analyse the
entity.
1.2.12 Value for money6
A measure used for comparing alternatives based on the relationship
between value and total cost.
1.2.13 Value Management
A structured and analytical process which follows a prescribed Work
Plan to achieve best value or, where appropriate, best value for
money.
3 The term ‘perceived’ is used here to emphasize that value will differ from person to
person, place to place, organization to organization and time to time.
4 The term ‘usefulness’ refers to the purposes fulfilled and functions performed.
5 The term ‘benefits’ refers to the advantages gained or enhanced well-being.
6 Value for money relates to total cost and is in common use. However, value for
money is just one measure of 'value for resources used'. Other resources could
include energy, time, natural resources, etc. Cost in money terms is only one such
resource.
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1.2.14 Value Management brief
A statement, endorsed by the client or its representative, which
establishes the objectives and scope of a Value Management Study.
1.2.15 Value Management Study (or Study)
The application of Value Management by a multidisciplinary group7
comprising:
• a number of technical specialists;
• a diverse group comprising stakeholders, end-users and
decision-makers; or
• a combination of these.
1.2.16 Value Management Study Facilitator (or Study Facilitator)
A person who:
• is suitably experienced and competent in both the principles and
practices of Value Management and group facilitation;
• has no vested interest in the outcome of the Study; and
• helps the Value Management Study group work efficiently and
effectively.
1.2.17 Work Plan
A sequential approach to implementing Value Management
(identified, as appropriate, in Table 3.1 or 4.1).
NOTE: The term Work Plan is used in this Standard in preference to the
more narrowly interpreted term 'Job Plan'.
1.2.18 Worth
A benchmark or target determined by the lowest cost to perform the
essential or supporting functions.
1.3 Applications of value management
Value Management may be applied at any level of an organization
and in a wide range of situations. While best applied as early as
possible to the planning, acquisition, development, operation,
maintenance and disposal of an entity, it may be applied beneficially
at any time.
Value Management can be applied across the full range of public
and private sector industry classifications8 as follows:
• agriculture, forestry and fishing;
7 The multidisciplinary group follows a prescribed work plan to achieve best value or
best value for money by collaborating to build shared knowledge and understanding
of individual and collective values and requirements. Further, the group makes
commitments to outcomes on which it reaches agreement.
8
The classifications are taken from Australian Bureau of Statistics Australian and New
Zealand Standard Industrial Classification (ANZSIC) 1993.
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• mining;
• manufacturing;
• electricity, gas and water supply;
• construction;
• wholesale trade;
• retail trade;
• accommodation, cafes and restaurants;
• transport and storage;
• communication services;
• finance and insurance;
• property and business services;
• government, administration and defence;
• education;
• health and community services;
• cultural and recreational services; and
• professional and other services.
Examples of situations in which Value Management may be applied
include but are not limited to:
• policy formulation;
• program development;
• project scoping;
• planning;
• budgeting;
• asset management;
• development of client briefs;
• project feasibility;
• development and use of information technology;
• site selection;
• procurement;
• administration;
• organizational design and development,
• life cycle costing;
• product, process, service and system design;
• marketing;
• material selection;
• construction and manufacturing;
• monitoring;
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• operation and maintenance;
• disposal;
• problem solving;
• conflict resolution;
• strategic planning;
• role definition and development;
• community consultation and participation; and
• development of performance/assessment advice.
1.4 Links to other systems and processes
Value Management may also be applied in association with, or as
part of, other management systems. These can include but are not
limited to the following:
• quality management and the continuous improvement process;
• risk management;
• procurement and purchasing;
• project management;
• incentive schemes;
• gateway review processes;
• change management; and
• business excellence and award systems.
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2 Guiding principles
The following guiding principles apply to Value Management.
(a) The term value is sometimes used as an abbreviation for value
for money, monetary value or economic value. For the purpose
of this Standard, value has been defined in a particular way. It is
important to make explicit this definition of value during the
application of Value Management.
(b) The perceived usefulness, benefits and importance of an entity
(i.e. those factors that determine its value) are interrelated and
work in combination with each other, as illustrated in Figure 2.1.
ENTITY
The purposes fulfilled
and functions performed
by the entity
BENEFITS IMPORTANCE
USEFULNESS
The advantages gained
or enhanced well-being
from the entity
Other characteristics of the entity
that are seen to be of particular
significance or consequence
FIGURE 2.1 VALUE OF AN ENTITY
(c) It is usual in Value Management to express functions in terms of
active verbs and measurable nouns9.
9 This is to provide clarity of meaning and avoid misinterpretation. These verb-noun
statements are made within the context of Value Management and should be
understood in that light. Examples of verb-noun statements are: 'transfer energy',
'teach children', 'enable access', 'contain liquid', 'direct traffic', 'shape metal', 'coach
netballers', 'enhance image' and 'boost self-confidence'.
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(d) When comparing alternatives, value for money may be
expressed as the relationship between
A measure of the of the
A measure of the of the
value entity
total cost entity
(e) Value for money may be improved in a number of ways, as
indicated in Figure 2.2.
Value Money
MoneyValue
MoneyValue
MoneyValue
Increasing the usefulness, benefi ts and importance of the enti tywhile reducing the total cost .
Increasing the usefulness, benefi ts and importance of the enti tywithout changing the total cost .
Preserving the usefulness, benefi ts and importance of the enti tywhile reducing the total cost .
Marginally reducing the usefulness, benefi ts and importance of the enti tywhile substantially reducing the total cost .
Substantially increasing the usefulness, benefi ts and importance of the enti tywhile marginally increasing the total cost .
MoneyValue
FIGURE 2.2 IMPROVED VALUE FOR MONEY10
10
The format for this Figure has been adapted from BS EN 12973: 2000.
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(f) In determining value for money, it is usual to address the
following questions.
• What does the entity do?
• What is the entity’s total cost?
• What is the assessed worth?
• What are the essential functions of the entity?
• What alternatives will deliver these essential functions?
• What is the total cost of these alternatives?
• Which alternative achieves best value for money?
(g) A range of measures is available for both value and value for
money. Particular measures should be selected on the basis of
their appropriateness to the situation being considered. Both
quantitative and qualitative measures should be considered.
(h) Before a Value Management Study is commenced, a Value
Management brief is required.
(i) The number and mix of group members in a Value Management
Study should be determined by the Study objectives, specifically
in terms of:
• the knowledge and experience that needs to be shared;
• appropriate representation of those most affected;
• the decisions that need to be taken; and
• the desired extent of ownership and commitment to
outcomes.
(j) A Value Management Study should take place at the earliest
practicable opportunity and further studies undertaken, if and
when required, at appropriate subsequent times during the life
cycle of the entity.
(k) The duration of a Value Management Study or its workshop
should be determined in advance by the estimated time required
to achieve the Study objectives. Where a specific time limit (for
example, two days) is given for a Study workshop, objectives
should be set such that the Work Plan can be effectively
addressed within that time limit.
Where appropriate, a Study may continue over an extended
period of time, particularly where actions are required before
going onto the next phase.
(l) A facilitation strategy needs to be prepared for each Study. The
role of the Study Facilitator is crucial in creating a collaborative
learning environment in:
• structuring Study activities in accordance with the Work Plan;
• providing guidance, direction and counselling to the group;
• framing the problem situation;
• bringing about consensus; and
• modelling appropriate behaviour.
(m) Assumptions made by Study group members about the entity
need to be made explicit and tested for compatibility and validity.
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(n) Within any group there are likely to be multiple perceptions of
what is useful, beneficial and important about the subject of the
Study. These multiple perceptions need to be recognized and
captured in determining value.
(o) Viewing an entity in the context of a broader system and
exploring interrelationships may have substantial bearing upon
the way in which the value of the entity is perceived and
interpreted by stakeholders.
(p) In a Value Management Study or when a Value Analyst is acting
alone, information and decision-making processes should be
recorded in an auditable and measurable way. Particular care
should be taken to ensure evidence of integrity and
transparency at all times.
(q) Value Management Studies are usually discrete events in the
life of an entity when there are particular issues requiring
resolution or optimisation. The work of a Value Analyst, on the
other hand, is carried out on a day-to-day basis in the normal
course of work.
(r) Value Management Studies depend upon specialists and others
working together as a group, thereby gaining their collective
knowledge, technical expertise and experience, plus the
substantial additional advantages arising from their interaction
and group dynamics. Value Management may also be applied
beneficially by Value Analysts using their individual technical
expertise in the normal course of work.
The application of Value Management through Value Management
Study groups and individual Value Analysts is described in
Sections 3 and 4 respectively. Figure 2.3 presents a simplified
framework for both ways of applying Value Management.
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Where appropriate,implement decisions and
recommendations
Fa
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tak
eh
old
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inv
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em
en
t a
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le
arn
ing
Fe
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-ba
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on
tin
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Document key steps anddecisions taken
Prepare an action plan
Make recommendationsand, where appropriate,
take decisions
Develop best value andvalue for money al ternatives
Evaluate ideas againstsuccess cri teria
Generate mult iple ideasaimed at achieving best value
Build knowledge andunderstanding of theenti ty and establ ish
success cri teria
Develop scopeand identi fystakeholders
FIGURE 2.3 VALUE MANAGEMENT FRAMEWORK11
11 Applicable to both Value Management Studies and the work of Value Analysts.
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3 Value management
studies
3.1 Introduction
In Value Management Studies, substantial advantages arise from the
interaction of group members and the overlap of their knowledge and
experience.
The success of Value Management Studies depends upon the
appropriate application of the following five essential elements:
• a prescribed Work Plan;
• the mix and commitment of group members;
• management of Value Management Studies;
• senior management commitment and support; and
• effective facilitation.
3.2 Prescribed work plan
3.2.1 General
The typical stages and activities of the Work Plan for a Value
Management Study are shown in Table 3.1. Within that Work Plan,
the stages and activities are carried out sequentially with a workshop
stage that may extend over several days.
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TABLE 3.1
WORK PLAN FOR A VALUE MANAGEMENT STUDY
Stage Activity
Prepare/review Value Management brief
Select Study group members
Organize a venue
Gather and distribute relevant information
Prepare facilitation strategy and agenda
Pre-workshop
planning
Brief Study group members
Confirm Study objectives
Confirm scope
Build knowledge and understanding of the entity and its
context (including the elements of value) and establish
success criteria
Generate multiple ideas to achieve best value and, where
appropriate, best value for money of the entity
Evaluate ideas against success criteria
Develop options and proposals
Make recommendations and, where appropriate, decisions
Workshop
Prepare an action plan
Post workshop Prepare Study report
Post Study Implement decisions and recommendations
The Work Plan is flexible and adaptable to a wide and extensive
range of applications. The Value Management Study proceeds
systematically through the following stages.
3.2.2 Pre-workshop planning
A number of activities are generally necessary prior to the workshop
stage of a Study. Responsibility for these, including the activities
listed below, should be clearly assigned.
(a) Preparation or review of the Value Management brief with the
client representative.
(b) Preparation of a brief for the Study Facilitator.
(c) Determination of a format for the Study’s workshop stage.
(d) Confirmation of workshop venue and dates.
(e) Identification of technical experts, end users, decision-makers
and other stakeholders to comprise the Study group.
(f) Clarification of objectives of the Value Management Study
(including the basis of agreement with client).
(g) Agreement about the total cost appropriate to the particular
Value Management Study.
(h) Selection and invitation of Study group members.
(i) Preparation and distribution of necessary briefing information
prior to the workshop stage.
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(j) Personal preparation by Study group members.
(k) Research and preparation of material that is to be presented in
the workshop stage.
(l) Development of an agenda for the workshop stage.
(m) Briefing Study group members.
3.2.3 Workshop
Workshops can be conducted in a variety of styles best suited to the
culture of the individual organizations and the entity under review.
The following elements need to be addressed in all Value
Management Studies.
(a) Confirm Study objectives.
The Study Facilitator should seek confirmation from the Study
group that the workshop objectives (distributed to all members
prior to the workshop) are understood and that the group is
willing to work collaboratively to achieve them.
Where appropriate, the objectives may need to be modified in
light of questions or statements from the Study group. In these
cases, it is essential to ensure that the modified objectives are
achievable within the time allowed for the Study, that the
expertise needed to address the modified objectives either
exists in or is available to the Study group and that the Study
group as a whole accepts the modifications.
(b) Confirm scope.
The Study Facilitator should seek confirmation from the Study
group that the scope of the Study is understood. The scope will
usually be defined in terms of a boundary drawn around the
entity being examined. Examples could include a new policy,
one stage of a project, part of a large machine, one building
from a hospital campus, a section of road pavement, a tourism
strategy or a new model vehicle. In some Studies, the scope
may be further refined during the workshop itself following the
analysis of functions. In these cases, certain functions may be
identified as collectively describing the scope of the Study.
(c) Build knowledge and understanding.
This is the foundational part of the workshop where shared
knowledge and understanding are established within the Study
group about all factors relevant to the Study, including the
systemic context in which the entity is situated.
While each Study should be planned individually and conducted
in response to specific needs, it is usual to adopt a systematic,
sequential approach to building knowledge and understanding.
The following sequence of activities represents one such
approach. It is not intended as a prescriptive formula.
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(i) Identify value elements and establish success criteria.
Work together as a group to capture the elements of value
of the entity, expressed as the essential functions, what is
important about them and the ensuing benefits. Collaborate
to identify and agree on the criteria that will be used to
determine success.
In this way, knowledge and understanding of value of the
entity is established early in the workshop. It is likely that
group members will collectively bring various perceptions of
usefulness, benefits and importance about the entity and
what will make it successful. Facilitated processes need to
be used to capture these perceptions from a whole-group
perspective.
(ii) Identify 'givens'.
'Givens' are the aspects of the entity or its situation that are
reasonable to accept without challenge. Examples could
include budgets, project inclusions, starting and finishing
times for the construction of new facilities, demographics,
policies, location and regulations. 'Givens' need to be
identified and accepted by members of the Study group.
(iii) Analyse essential and supporting functions.
Identify, describe and analyse the essential and supporting
functions of the entity, together with their interrelationships
and, where appropriate, costs or resources used.
In carrying out the function analysis, modelling processes
such as purpose-means models, function hierarchies, or
FAST diagrams12 assist in analysing the purposes and
functions.
In addition to demonstrating relationships between
functions, the models provide a vehicle to identify areas for
potential improvement in value or value for money.
The function analysis process may, in some cases, lead to
modification of the scope of the Study.
(d) Generate ideas.
The Study group generates ideas having the potential to
achieve best value or value for money. It is usual to use creative
thinking and group-techniques to aid the generation of ideas. A
large number of ideas should be generated and recorded at this
stage, without judgement or criticism.
12 The FAST diagram (Function Analysis Systems Technique) was developed by
Charles Bytheway of Sperry Rand Corporation. This technique is reviewed in most
texts on Value Management.
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(e) Evaluate ideas.
The ideas generated should then be evaluated against
previously agreed success criteria. From the large number of
ideas, select those that perform best against the agreed
success criteria. Apart from any case-specific criteria, ideas are
usually selected based on their potential to:
(i) achieve best value by increasing the extent of usefulness,
benefits or importance of the entity; and
(ii) achieve best value for money by:
• reducing costs while maintaining the extent of
usefulness, benefit or importance of the entity;
• keeping costs constant while increasing the extent of
usefulness, benefit or importance of the entity; or
• a combination of these.
(f) Develop options and proposals.
Those ideas that have progressed through the previous
evaluation activity are then further developed into working
proposals.
(g) Make recommendations and, where appropriate, take decisions.
Consider the proposals that have emerged from the
development phase and use analytical judgement to make
recommendations and/or take decisions as the case may be.
(h) Prepare an action plan.
An action plan should be prepared to:
(i) identify any issues to be resolved post workshop;
(ii) list ideas that require further evaluation and resolution;
(iii) identify actions needed to implement the recommendations;
(iv) show who is responsible to carry out the implementation
actions;
(v) show when these actions should be carried out; and
(vi) show what resources are required for this implementation.
3.2.4 Post workshop
Write and distribute a Study report providing a record of process,
proceedings and outcomes. The report shall be auditable against this
Standard.
The extent of detail to be included in such a report will be determined
by the client, based on the intended use of the report. In some
cases, a detailed record of the justification for each proposal will be
required, whereas in other cases it will suffice to provide a brief
summary of the process followed, plus a list of recommendations
and actions.
The client representative (with assistance, as appropriate, from the
Study Facilitator) should ensure the Study report is appropriately
accepted by client management.
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3.2.5 Post Study
Client management should ensure implementation of the Study’s
recommendations and decisions, including the allocation of
appropriate resources, agreement on relevant time-frames and the
establishment and implementation of appropriate management
controls.
3.3 Appropriate mix and commitment of group members
It is essential that the Study group comprises members who:
• have the necessary breadth and depth of experience to achieve
the Study objectives;
• have appropriate responsibility and authority; and
• are committed to work collaboratively.
In selecting group members, consideration should therefore be given
to the following:�
• personal commitment to interact openly with others;
• willingness to collaborate in pursuing best value or best value for
money;
• receptiveness to new ideas;
• commitment to active participation throughout all stages of the
Study;
• technical expertise required for the kind of entity being studied;
• knowledge and experience of the context and situation of the
entity;
• appropriate responsibility and authority to make decisions
affecting the entity; and
• credible representatives of stakeholder groups.13
A Value Management Study is likely to be more successful when
group members:
• are involved throughout the whole of the Study's workshop
stage;
• accept that the Study's overall interests are more important than
sectional interests or personal concerns; and
• accept the group's commitment to the Study's objectives and
outcomes.
13 Categories of people who may be significantly impacted by the Study's outcomes
might include users, operators, suppliers and neighbours.
The appropriate stakeholder representation will depend on the Study objectives. In
some cases, particular stakeholders might not be present where the Study is of a
highly technical nature, nor technical experts be present where the Study involves
content such as community values or expectations.
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3.4 Management of value management studies
The way in which Value Management Studies are managed from
inception to completion is critical to their success.
Table 3.1 sets out the activities that need to be undertaken as part of
a Study before, during and after the Study’s workshop stage. It is
essential that an individual with knowledge of the overall Value
Management process be responsible for the effective management
of these tasks. In some cases, the Study Facilitator will have
responsibility for all such tasks. In other cases, a Study manager will
be appointed to manage all pre-workshop activities in consultation
with the Study Facilitator. The Study Facilitator should manage
activities within the workshop.
3.5 Senior management commitment and support
It is important that within the client organization, leaders and senior
managers demonstrate commitment and support of Value
Management Studies, including full and active participation, as
appropriate, in Study workshops.
3.6 Effective facilitation
Workshop facilitation plays a pivotal role in Value Management
Studies. While many facilitation skills will be common to all Value
Management Studies, other facilitation skills will only be called for in
certain situations, such as when large groups are involved.
The Study Facilitator’s primary role is to help the group increase its
effectiveness by improving its process. The Study Facilitator will
diagnose the group’s progress and intervene and provide direction
as appropriate, including adherence to the Work Plan and to time
constraints. The Study Facilitator will usually have no decision-
making authority in relation to the scope of the Study.
The Study Facilitator should demonstrate competence in a wide
range of group-facilitation skills including:
• active listening;
• interpersonal communications;
• questioning;
• lateral thinking;
• analysis, synthesis and evaluation of information and of options
developed in the workshop;
• promoting cooperative and collaborative behaviour; and
• overcoming resistance to change.
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4 Value analysts
4.1 Application
Whereas the primary focus of this Standard is the application of
Value Management by groups of people in Value Management
Studies, in which substantial advantage arises from the interaction
within the Study group, the Standard also recognizes that it is
beneficial for many individuals to apply Value Management in the
normal course of work. Examples of such individual applications
include purchasing and procurement, as well as planning and
design.
As Value Analysts generally act individually in sourcing and
analysing information, they should have sufficient specialist
knowledge and skills for the analysis being undertaken.
4.2 Prescribed work plan
The typical activities in the Work Plan for a Value Analyst are shown
in Table 4.1. This Work Plan is similar in most respects to the Work
Plan for a Value Management Study. However, the Work Plan for a
Value Analyst is intended as an ongoing process in which all of the
activities are undertaken by a Value Analyst in the normal course of
work. This will, at times, involve the Value Analyst working in
cooperation with others in seeking input and advice, including ideas
for alternative proposals.
19 AS 4183—2007
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TABLE 4.1
WORK PLAN FOR A VALUE ANALYST
Identify potential opportunities for the application of
Value Management
Define the potential scope of the Value Management
activities within the resources available to the Value
Analyst
Prepare an individual strategy to apply the Work Plan
within the day-to-day activities of the Value Analyst
Build knowledge and understanding of the entity and
its context (including the elements of value and value
for money to be analysed) and establish success
criteria
Generate multiple ideas to achieve best value and,
where appropriate, best value for money of the entity
Evaluate ideas against success criteria
Develop options and proposals
Make decisions and, where appropriate,
recommendations
Record key steps and decisions taken in the process
Where appropriate, implement decisions and
recommendations
4.3 Activities
Individual Value Analysts working alone or alongside their co-
workers will not gain the benefit of group dynamics and information
generated within a Value Management Study. They will therefore
need to rely more on the use of some of the Value Management
techniques which seek to replicate the generation and analysis of
information obtained through a multidisciplinary group.
Value Analysts will therefore need to place particular emphasis on:
• using function analysis to understand and question the role and
need for the entities on which they work;
• using creative thinking techniques to help generate multiple
ideas rather than simply relying only on their past individual
experience with its unrecognized conceptual blockages.
Multidisciplinary groups provide a wider range of ideas and
experiences that can help to reveal these individual blockages;
• using the concepts of function, cost and worth in order to better
evaluate alternative ideas and help determine options to achieve
best value or best value for money; and
AS 4183—2007 20
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• documenting the key Work Plan activities carried out, and the
reasons for the decisions taken, in order to arrive at best value
or best value for money options. Without this, no one else may
know what, why or how particular decisions were made. This
information may be required for post-implementation analysis
and can also be vital for other members of the organization in
their own decision-making activities. Documentation shall also
be auditable against this Standard. It will also be used later by
the Value Analyst in considering further opportunities to achieve
best value and value for money for the organization and
customers in day-to-day work.
4.4 Interface with value management studies
In their day-to-day work, Value Analysts can help to identify
problems and opportunities that may subsequently become the
subject of Value Management Studies.
Where skills and experience are appropriate, the Value Analyst may
also participate in Value Management Studies in the role of technical
expert or stakeholder.
Value Analysts may also provide advice to Value Management Study
groups. In some circumstances, a Value Analyst might facilitate a
Value Management Study but only if the Value Analyst meets all of
the criteria for a Study Facilitator given in Clause 1.2.16.
21 AS 4183—2007
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5 Embedding value
management
5.1 Organizational culture and processes
Maximizing value or value for money is a requirement of virtually
every transaction in commerce, industry and Government.
Consequently this Standard seeks to embed Value Management in
organizational culture and processes.
To be most effective, Value Management should become part of an
organization's culture and be applied at all levels of decision-making.
5.2 Enhancing value management culture
To enhance this Value Management culture:
• individuals within the organization should develop appropriate
knowledge and skills in Value Management in addition to their
core expertise;
• the organization's senior management should actively support
the use of Value Management; and
• opportunities should be actively sought by the organization for
the application of Value Management through Value
Management Studies and the ongoing use of Value Analysts.
5.3 Building on existing practices
In most organizations there will be existing practices that aim to
achieve best value and value for money. Often, other management
systems and processes include elements of Value Management.
Some organizations may have already adopted Value Management
for particular programs intended to seek best value or best value for
money, and may wish to extend those other activities and programs
so that there is consistency of approach across the whole
organization.
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When planning the introduction and ongoing implementation of Value
Management, an organization should critically review and assess
those elements of Value Management that may already be in place.
This review should take account of the organization’s external
context as well as its goals, objectives and the nature of its business.
The review should include a structured appreciation of:
• Value Management elements that may already exist;
• the maturity, characteristics and effectiveness of those elements;
• the processes and systems that can be built on, and where they
may need to be modified or extended;
• the particular barriers and constraints that might be encountered
in the introduction of Value Management;
• Value Management approaches that have been developed by
other organizations and perhaps competitors;
• any particular legislative or compliance requirements such as
value for money that might need to be satisfied; and
• any resource constraints and imperatives.
The review should form the basis for the development of a Value
Management plan covering the development, implementation and
sustaining phases as Value Management is introduced and becomes
embedded in the organization’s culture.
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