AS 4183-2007 Value Management · AS 4183—2007 ii Preface This Standard was prepared by the...

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 Standards may also be withdrawn.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

1 AS 4183—2007

www.standards.org.au Standards Australia

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.

AS 4183—2007 2

Standards Australia www.standards.org.au

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.

3 AS 4183—2007


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.

AS 4183—2007 4


• 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;

5 AS 4183—2007


• 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.

AS 4183—2007 6


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'.

7 AS 4183—2007


(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.

AS 4183—2007 8


(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.

9 AS 4183—2007


(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.

AS 4183—2007 10


Where appropriate,implement decisions and

recommendations

Fa

cil

ita

te s

tak

eh

old

er

inv

olv

em

en

t a

nd

le

arn

ing

Fe

ed

-ba

ck

lo

op

fo

r c

on

tin

uo

us

im

pro

ve

me

nt

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.

11 AS 4183—2007


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.

AS 4183—2007 12


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.

13 AS 4183—2007


(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.

AS 4183—2007 14


(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.

15 AS 4183—2007


(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.

AS 4183—2007 16


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.

17 AS 4183—2007


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.

AS 4183—2007 18


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


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


• 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


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.

AS 4183—2007 22


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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