Strategic Asset Management Framework

GUIDELINE

Value Management

Value management can assist agencies to make good decisions on the planning, management
and use of building assets. The Australian Standard 4183-2007: Value Management defines
value management as a structured and analytical process which follows a prescribed work
plan to achieve best value or, where appropriate, best value for money. Value for money in
the context of this definition is a measure used for comparing alternatives based on the
relationship between value and total cost.
Value management has the following key characteristics:

follows a specific methodology

is based upon a creative problem solving approach

involves key stakeholders in a managed team approach (e.g. a workshop)

considers functions and their interrelationships

focuses on achieving value-added solutions.

The concepts contained in this guideline are consistent with the requirements in the Capital
Works Management Framework (Department of Housing and Public Works) and the Project
Assurance Framework (Queensland Treasury and Trade).
Agencies may find value management particularly useful when:

determining and prioritising needs

testing and validating planning assumptions

enhancing the performance of assets

securing the commitment of stakeholders to outcomes through structured

participation

ensuring that a project or program is cost effective

improving value through reduced costs while maintaining required standards

identifying alternative solutions to achieve agreed objectives and outcomes.

Department of Housing and Public Works

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Benefits
A well-managed value management process can facilitate:

clarification of stakeholder needs and user requirements

better definition and understanding of the project objectives leading to an improved

client brief

saving money, time and resources

generation of alternative ideas, options and solutions

identification of innovative service delivery processes

increased operational efficiencies

enhanced communication, teamwork and cooperation

wider ownership of project outcomes and a commitment to implementation.

assessment of risk.

Risks
Potential risks associated with not undertaking value management include:

outcomes that represent poor value for money

inappropriate strategies for meeting service needs

inadequate definition of service needs

an imbalance between capital, operating and maintenance expenditure

an asset that does not support service delivery

ineffective communication among stakeholders

deficient project briefs

lack of project ownership by end users.

1.0 Value management study

A value management study usually:

entails a participatory workshop involving a multidisciplinary representative group of

people who work together and follow a prescribed work plan

affects everyone associated with the project, for example:

o

clients who are interested in achieving the best value for money

users who want the project to meet their needs as effectively as possible

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designers who are keen to meet the expectations of the client and users and
to ensure that the planning and design principles and performance
requirements for the project 1 are understood, evaluated and appropriately
applied

project directors and project managers seeking to ensure that the project is
managed within time, quality and budgetary constraints

contractors aiming to provide services in such a way that they receive an

adequate profit.

While a value management study generally returns savings in excess of the cost of
conducting it, the following expenses should nevertheless be recognised and taken into
consideration prior to commissioning the study:

engaging a facilitator or team (if required)

each participants attendance

venue hire (if applicable)

administrative support.

The decision to conduct a value management study may be influenced by the following
factors:

perceived potential for cost savings or improved outcomes

a desire to overcome a difficult or multi-faceted problem

the need to provide rigorous review or audit

the need to optimise the balance between capital, operating and maintenance
expenditure

the requirement to accelerate a project

the complex, high cost or innovative nature of a project

a large number of stakeholder interfaces.

When a decision is made to conduct a value management study, a skilled value management
facilitator (or facilitation team) should manage the process. The choice of facilitator is
fundamental to the success of a value management study. The decision to use an in-house
facilitator, a consultant facilitator or a facilitation team should consider the nature of the
study, the complexity of the task and the likely number of stakeholders involved in the
workshop.
When selecting a facilitator, agencies should consider their:

competence in the principles and practices of value management

experience with group facilitation of similar projects

Guidance related to planning and design principles and performance requirements in the context of preparing a project brief is
available in the Capital Works Management Framework guideline: Project Definition.

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knowledge of and willingness/ability to comply with the Australian Standard 41832007: Value Management (to confirm the facilitators suitability it may be useful to
undertake referee checks and examine any supporting documents with respect to a
particular value management commissions previously conducted)

professional qualifications relevant to the building industry and/or eligibility for

registration as a Value Management Facilitator by the Institute of Value Management
Australia.

The facilitator should be objective, have no vested interest or any other involvement with the
project, be familiar with the design and construction process, and with the roles of the
members of the design team.
The four stages of the value management study (which are consistent with the Australian
Standard 4183-2007: Value Management) are explained below:

1.1

Pre-workshop

The facilitator and the sponsor of the study should work collaboratively to:

establish and document the objectives and scope of the study

determine the venue, format and duration of the workshop

identify key stakeholders including technical experts, end users, decision-makers and
others

invite participants

produce a facilitation strategy and workshop agenda

prepare and distribute background material.

1.2

Workshop

The workshop is the main element of the value management study. It provides the means for
bringing key stakeholders together in a forum which:

maximises their contribution

draws on the combined knowledge, technical expertise and experience of people from
a variety of disciplines

takes advantage of group dynamics rather than relying on input from individuals in
isolation

helps to bring into perspective the project as a whole, rather than as a collection of
independent elements

ensures the most cost effective use is made of participants time by concentrating
their contribution into a short duration workshop.

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During this stage, the facilitator focuses more on process than content as they guide
workshop participants through the following activities:

confirming the objectives and scope of the value management study

building knowledge and understanding by:

o

identifying essential functions e.g. givens (budgets, project inclusions,

relevant legislation and policies) and key issues and concerns

analysing essential and supporting functions, together with their

interrelationships, costs and resources

generating alternatives which are the most likely to achieve best value for money

evaluating ideas

developing options and proposals considered to have the most potential

making recommendations

preparing an action plan.

The action plan:

consolidates the outcomes of the workshop

represents the consensus of views of the workshop participants

highlights ideas that show the greatest potential for value improvement

identifies:

1.3

issues that may need to be addressed after the workshop

ideas that require further evaluation and resolution

actions needed to implement the recommendations arising from the workshop

persons responsible for implementation actions and associated timeframes for

completion

resources required for implementation.

Post-workshop

During this stage, a report is prepared which documents the process, proceedings and
outcomes of the workshop. The report should provide a clear and comprehensive record of
events and justifications that led to the development of recommendations and actions.
The report will generally include:

an executive summary

an overview of the workshop

study findings and value improvement options

a list of actions and recommendations.

The report should be distributed to workshop participants/stakeholders before being

submitted to management for acceptance of its recommendations.

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Some form of evaluation is advisable to confirm that the value management process has
achieved its objectives in a cost-effective manner.

1.4

Post-study

The implementation of the studys recommendations and decisions depends on the:

allocation of appropriate resources and sufficient time for assessing and

implementing the recommendations

establishment of management controls to achieve the agreed objectives and

outcomes.

The success of a value management study depends upon the five essential elements:

a prescribed work plan that clearly outlines the stages and associated activities

an appropriate mix of participants who are committed to participate in the workshop

efficient management of the study from inception to completion

support of senior management

effective facilitation of the workshop.

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The suite of guidelines which comprise the Strategic Asset Management Framework
(available online at www.hpw.qld.gov.au) is organised under the following categories:
1.

Overview - explains the principles and concepts of strategic asset management as

they apply to buildings.

2.

Guidelines - expand on key aspects of strategic asset management to inform

decisions over the entire life-cycle of the asset.

3.

Decision-making methodologies and guidelines - support agencies to implement

best practice strategic management of buildings.

Value Management
Second Edition
First Edition published as Value Management (ISBN 0 7242 6959 2) in the Strategic Asset
Management - Best Practice Guidelines
Queensland Department of Housing and Public Works
December 2010
(includes minor updates as at January 2013)
ISBN 978-1-921670-16-9
The State of Queensland
(Department of Housing and Public Works)

Enquiries should be directed to:

The Principal Policy Manager
Building Policy Unit
Strategic Asset Management
Department of Housing and Public Works
GPO Box 2457
Brisbane Qld 4001
bpu@publicworks.qld.gov.au