Cost and Value Management in Projects, 2nd Edition

Chapter 8Value Management

Learning Objectives

After completing this lesson, you should be able to:

• Define value and discuss concepts of in managing projects.
• Discuss the various dimensions and measures of value.
• Define value management (VM) and its key principles and attributes.
• Discuss the techniques of value planning, value engineering, and value analysis.
• Know the reasons for using value management in projects.
• Explain the three components of the value management approach.
• Discuss the five key elements of the value management process.
• List the benefits of using value management in projects.
• List some of the important additional requirements for a successful VM implementation.
• Discuss the seven stages of VM reviews.
• Explain the relationship between project value and project risk.
• Discuss how value management can be used in project risk assessment.
• Discuss the essential features of project benefits management.

When an organization formulates new strategy, one of its key considerations is its ability to exploit opportunities in the external or internal environment. This includes initiating projects that enable the organization to achieve some well-defined goals or objectives—in other words, projects that add value. Creating and enhancing project value while managing project costs to achieve cost reduction is a significant harbinger of project success. The two coextensive elements—creating and enhancing project value—enable project stakeholders to understand the expenditures ...