Management of Value

Description

MoV is the core guidance for people who are responsible for maximizing the resources invested to get the best financial and non-financial benefits from programmes and projects This guidance is aimed at those with responsibility for directing programmes and projects and managing them through to delivery. Management of Value Contents List of figures List of tables Foreword Acknowledgements 1 Introduction Figure 1.1 Structure of Chapter 1 1.1 Purpose of this guide 1.2 What is value? Figure 1.2 The value ratio. In the equation, theterm ‘needs’ includes what is necessaryand desired by the user 1.3 What is management of value? 1.3.1 How does it do this? 1.4 Why is MoV important? 1.4.1 Maximizing return on investment 1.4.2 Customer satisfaction 1.4.3 Risk management 1.4.4 Maximizing people’s contribution 1.5 Where and when should MoV be used? Figure 1.3 Timing 1.6 MoV in relation to other Best Management Practice guidance Figure 1.4 MoV’s relationship with other Best Management Practice guides 1.6.1 Management of Portfolios 1.6.2 Managing Successful Programmes Figure 1.5 Comparison of PRINCE2, MoV and MSP principles 1.6.3 Managing Successful Projects with PRINCE2 1.6.4 ITIL® Service Management Practices 1.6.5 Management of Risk Figure 1.6 The structure of this guide 1.6.6 Portfolio, Programme and Project Offices 1.6.7 Relationship with PRINCE2 and MSP 1.7 The structure of this guide 1.7.1 Principles (Chapter 2) 1.7.2 Processes (Chapter 3) 1.7.3 Techniques (Chapter 4) 1.7.4 Approach to implementation (Chapter 5) 1.7.5 Environment: responding to external and internal influences (Chapter 6) 1.7.6 Embedding MoV into an organization (Chapter 7) 1.7.7 Appendices 2 Principles Figure 2.1 Structure of Chapter 2 2.1 Align with organizational objectives 2.2 Focus on functions and required outcomes 2.2.1 Functions 2.2.2 Value drivers 2.2.3 Function diagrams 2.2.4 Value profile Figure 2.2 The principles of function diagrams 2.3 Balance the variables to maximize alue 2.3.1 Engagement of stakeholders 2.3.2 Reducing subjectivity Figure 2.3 Programme or project stakeholders 2.3.3 Balancing the use of resources 2.3.4 Balancing benefits realized against use of resources 2.4 Apply MoV through out the investment decision 2.5 Tailor MoV activity to suit the subject 2.6 Learn from experience and improve 2.6.1 Individual improvement 2.6.2 Process improvement 2.6.3 Organizational maturity improvement 2.7 Assign clear roles and responsibilities and build a supportive culture 3 Processes Figure 3.1 Structure of Chapter 3 3.1 Frame the programmeor project 3.1.1 Initial briefing meeting 3.1.2 Informing the business case 3.1.3 Stakeholder analysis 3.1.4 Use of a value profile to inform programme and project objectives 3.1.5 Developing the MoV project plan 3.1.6 Responding to changes in the business case 3.1.7 Specialist applications 3.2 Gather information 3.2.1 Briefing meeting 3.2.2 Team selection 3.2.3 Consulting with stakeholders 3.2.4 Research and precedent 3.2.5 Scoping 3.3 Analyse information 3.3.1 Function analysis 3.3.2 Resource analysis Figure 3.2 Example of a cost distribution histogram Figure 3.3 Example of an end-to-end project schedule 3.3.3 Function cost analysis 3.3.4 Benchmark analysis 3.4 Process information 3.4.1 Preparation 3.4.2 Facilitation 3.4.3 Creativity and innovation 3.5 Evaluate and select 3.5.1 Idea selection 3.5.2 Option selection 3.5.3 Cost benefit analysis 3.6 Develop value-improving proposals 3.6.1 Proposal development formats 3.6.2 Peer review 3.6.3 Balancing the benefits and use of resources Figure 3.4 Balancing the variables to maximize value 3.6.4 Value metrics 3.6.5 Cost estimation 3.6.6 Assessing time impact 3.6.7 Assessing performance impact 3.6.8 Scenario building 3.6.9 Specialist applications 3.7 Implement and share outputs 3.7.1 Developing the proposal implementation plan 3.7.2 Incentivizing delivery of value 3.7.3 Monitoring progress 3.7.4 Reporting 4 Techniques Figure 4.1 Structure of Chapter 4 4.1 Function analysis 4.1.1 Function Analysis Systems Technique (FAST) Figure 4.2 A customer FAST diagram Figure 4.3 ‘When?’, ‘And’ ‘Or’ FAST diagram connections Figure 4.4 Function diagram for a government ministry contract (see example in text) 4.1.2 Value trees and useful derivatives Figure 4.5 Value tree for a new hospital (simplified) Figure 4.6 Value profile (for the same hospital as Figure 4.5) Table 4.1 Value index (for the same hospital as in Figure 4.5) Table 4.2 The value for money ratio (for the same hospital as in Figure 4.5) 4.2 Function cost analysis 4.2.1 Cost/worth 4.3 Value engineering/analysis Figure 4.7 The value engineering job plan 4.3.1 Information phase 4.3.2 Analysis phase 4.3.3 Creative (or speculation) phase 4.3.4 Evaluation phase 4.3.5 Development phase 4.3.6 Presentation phase Figure 4.8 Typical process step 4.3.7 Implementation phase 4.3.8 Follow-up phase 4.4 Techniques commonly used in MoV 4.4.1 Information analysis Figure 4.9 Root cause analysis 4.4.2 Idea generation 4.4.3 Evaluation and option selection Table 4.3 An example of an option evaluation matrix Figure 4.10 Idea selection matrix 4.4.4 Weighting techniques Figure 4.11 Paired comparison matrix 4.4.5 Developing value-improving proposals 4.4.6 Implementing VIPs and follow-up 5 Approach to implementation Figure 5.1 Structure of Chapter 5 5.1 Plan the MoV activities 5.1.1 The MoV project plan Figure 5.2 Generic MoV project plan Figure 5.3 Integrated programme and project plans 5.1.2 Programme or project organization 5.1.3 Integrated MoV study team Figure 5.4 Relationship between the MoV practitioners and the project team 5.1.4 Planning for use throughout the project Table 5.1 MoV at key project stages Figure 5.5 MoV applied at portfolio level 5.2 Understand and articulate value 5.2.1 Align with organizational objectives Figure 5.6 Value cascade 5.2.2 Articulate value 5.3 Prioritize value 5.4 Improve value 5.4.1 Redistributing resources to maximize value 5.4.2 Trading off 5.5 Quantify value 5.5.1 Value index 5.5.2 Value for money ratio 5.6 Monitor improvements in value 5.7 Learn lessons 6 Environment: responding to external and internal influences Figure 6.1 Structure of Chapter 6 6.1 External factors 6.1.1 Political and legal influences 6.1.2 Environmental influences Figure 6.2 Interrelationship between internal and external environments 6.1.3 Technological influences 6.1.4 Interaction with other projects 6.2 Internal factors 6.2.1 Portfolio and policy considerations 6.2.2 Alignment with organizational culture 6.2.3 Interaction with other projects 6.2.4 Integration with other processes 6.2.5 Resource and skill availability 6.3 Portfolio considerations 6.4 Programme considerations 6.4.1 Relation to other programmes 6.4.2 MoV programme plan 6.5 Project considerati ons Figure 6.3 MoV applied at programme level Figure 6.4 MoV applied at project level 6.5.1 Internal influences 6.5.2 External impacts 6.6 Operational considerations 6.6.1 Internal influences 6.6.2 External impacts 7 Embedding MoV into an organization Figure 7.1 Structure of Chapter 7 7.1 Introducing an MoV policy 7.1.1 Composition Figure 7.2 How to introduce and embed MoV 7.1.2 Multiple policies 7.2 Roles and responsibilities Figure 7.3 A suggested MoV management structure Table 7.1 Key roles 7.3 Setting up a plan for implementing the policy 7.4 Introducing training 7.5 Study leader’s handbook 7.6 Data capture and feedback 7.6.1 MoV study records 7.6.2 Effective value-improving measures 7.6.3 Trends 7.6.4 Case studies 7.6.5 Audit trail 7.6.6 Feedback for improving performance 7.7 Monitoring and measuring the benefits Figure 7.4 Feedback for improving performance 7.8 Overcoming barriers to embedding MoV 7.8.1 We do it anyway 7.8.2 It takes too much time 7.8.3 We can’t afford to make changes 7.8.4 What’s in it for me? 7.8.5 Don’t fix it if it ain’t broke 7.8.6 Fixed returns on capital investment 7.9 Avoiding failure Table 7.2 Eight common causes of project failure Appendix A: Document checklists A.1 Briefing meeting agenda A.2 Communications checklist A.3 Equipment list for an effective study/workshop A.4 Invitation to join the study team A.4.1 Pro forma invitation A.5 Option evaluati on matrix A.6 Plan the study Table A.1 An example of an option evaluation matrix A.7 Recording idea selection A.8 Reporting study outputs A.9 Scoping the study A.10 Study or work shop handbook A.11 Value-improving proposal forms A.12 Value improvement tracking report Table A.2 Example of a value improvement tracking report Appendix B: Toolbox Appendix C: Health check C.1 Purpose C.2 Process C.2.1 Preparation C.2.2 Data collection C.2.3 Data analysis C.2.4 Report and review C.2.5 Implementation C.3 Framework C.3.1 Align with organizational objectives Figure C.1 MoV maturity histogram C.3.2 Focus on function and required outcomes C.3.3 Balance the variables to maximize value C.3.4 Apply throughout the programme or project C.3.5 Tailor to suit the programme or project C.3.6 Learn from experience and improve C.3.7 Assign clear roles and responsibilities and build culture Appendix D: Maturity and competence D.1 Introduction D.2 Process improvement D.3 Definition D.4 Purpose D.5 Structure D.6 Use and deployment D.6.1 Progressing between maturity levels Figure D.1 P3M3 maturity structure Table D.1 Outline MoV maturity model D.6.2 Maintaining the highest levelof maturity D.6.3 Principal benefits D.6.4 Reasons for use D.7 Individual competence models D.7.1 Progression between levels Glossary Index