valuemanagement

Value management is a systematic, multidisciplinary approach aimed at improving the value of a project, product, or service by optimizing function relative to cost and risk. It seeks to deliver necessary performance and quality at the lowest total lifecycle cost, without compromising core objectives.

Value management rests on analyzing the functions that a product or project must perform. Function analysis and function-cost planning, sometimes using FAST diagrams, help identify different ways to achieve required functions and generate viable alternatives. A typical value management process follows a job plan that includes information gathering, function analysis, creative generation of options, evaluation and selection, development and presentation of recommendations, and implementation with follow-up.

The approach originated in the United Kingdom in the mid-20th century through the work of Lawrence Miles and colleagues, evolving into value engineering and later spreading to construction, manufacturing, and public sector procurement worldwide.

Applications and benefits: it is used in construction, infrastructure, product development, IT systems, and facilities management. Potential advantages include lower lifecycle costs, better alignment with stakeholder needs, improved quality and performance, risk reduction, and clearer decision rationale.

Limitations and criticisms: success depends on skilled facilitation and buy-in from project teams; it can require extra up-front time and resources; there is a risk of focusing on cost cuts rather than true value if misapplied; and the benefits may be hard to quantify.

Related concepts include value engineering, function analysis, lifecycle cost, and cost-benefit analysis.