Optimizing Value Management
The Saybrook Value Management process seeks to optimize your investment by ensuring that the highest value – not just lowest cost – results from your investment. Because the capital cost component of a project is usually the smallest over the design life-cycle, our approach to Value Analysis focuses on Total Costs and Life-cycle costs in comparing ‘apparent savings’ with ‘real savings’. We believe that Value is defined by Output or Benefit per Unit of Cost – rather than Cost per Unit of Input. Value decisions that are good for the project might not be so for the Program or long-term interests of the owner. As such while a Value analysis might lead to savings by eliminating unneeded components or processes, it might equally demonstrate options for greater overall return through increased initial costs. Our role helps ensure that Value is maintained or increased and that savings are not the result of compromised or decreased project functionality. Always distinguish between Value and Cost.
- Establish a value hierarchy for the project as well as for the Program or Corporation.
- Identify processes and components that are critical to the functionality and benefits promised by the Project business case.
- Examine current work processes and identify opportunities for improvement.
- Identify scope or processes that are overpriced for the value they provide.
- Identify opportunities for achieving greater Value at the same – or even at higher costs.
Focus upon optimization of life cycle costs – not only one time costs.