What is Value Management?
Value Management is concerned with the creation of sustainable value, whether that is focused on a product, a process, a project, an organisation or on wider society issues.
It achieves such results with relatively low investment and risk to the organisation, and can and indeed should be integrated with existing management initiatives and systems. Such integration drives organisational learning and sustainable value.
The key principles
VM is founded on the concept of value and on the function based approach.
CONCEPT OF VALUE
The concept of value is based on the relationship between satisfying needs and expectations and the resources required to achieve them which may change both with context and time.
Value Management recognises that enhanced value requires change and creativity, and that a focus on function (what a product, system or service does to meet needs and wants) as the key to innovation and achieving better value.
The methods and tools associated with it, encourages new ways of seeing and understanding established products, processes and systems, and how they both generate benefit for customers, users and other stakeholders and drive out unnecessary costs. By identifying the function or purpose of a component or product one is able to secure radical design and cost improvements due to being unfettered by the way that function had been met in the past.
Understanding the balance between function benefits and costs enables new and more optimal balances to be created, as various classes of value mismatches are identified and resolved, resulting in generating high-value innovations.
The Standard EN 12973 represents a consensus of views and provides a benchmark of good practice.
HE STANDARD EN 12973
It is designed to provide flexibility and can be applied in a very wide range of circumstances. It captures the essence of Value Management and provides a framework for its application. It describes Value Management approaches and a range of methods and encourages the selection of the most appropriate methods to achieve the desired outcome.
THE STANDARD PRIMARILY ADDRESSES THE NEEDS OF THREE GROUPS:
- Senior Managers seeking to enhance value within their organisations and for their customers.
- People involved in its application.
- Those involved in training and development.
The document progresses from an introduction outlining the benefits for management, through the underlying concepts to their application. It ends with a discussion of some of the techniques which may be useful.
Requirements and guidance on functional expression of the need and functional performance specification are set out in EN 16271.
The Standard EN 16271 states the conditions for successful implementation of Functional Need Analysis, Functional Need Expression and Functional Performance Specification. It extends the generic standard on Value Management, EN 12973.
The Standard EN 1325 defines terms for Value Management (VM), to develop a consistent and common language for use in optimising performance and productivity for organizations, projects, products, and services.