Value Engineering


Value is to project as outcome is to idea

“We all know we are improving by doing the things we are doing: what we don’t know is are we doing the best we can?” Value Engineering client.

There is a lot of hype about Value Engineering. There is even an entry in Wikipedia for it. But what is it really?

Value Engineering is a way to help an organization identify the value that is locked up in the organization. Most organizations have inefficiencies caused through errors, duplication, poor communication, lack of controls and inadequate oversight.

This value can be calculated and assigned a dollar amount and identifying the ways to release that value are what the Value Engineer is skilled in most.

All too often organizations limp along with manual, unoptimized and repetitive activities because justifying their elimination is hard to quantify and even harder to fund. A Value Engineering Assessment will define the locked up value and offer a blue-print of how that value can be released. Often the value can be released by simple changes to processes, or by adding additional controls and sometimes by introducing new technologies.

In the end what you end up with is a business base which shows where the value is, how to release it and what the costs are to do so. A business case that is just as compelling as the ones the business puts before IT to get their projects funded.

Typically the Value Engineering Assessment is divided into three phases: Value Discovery, Value Realization and Value Optimization.

Value Discovery. This is an initial interview and data collection process. From this the Value Engineer (VE) will then develop a comprehensive findings report showing the strengths and weaknesses of the client’s use of technology in their organization.

This is followed by the Value Realization stage which begins with the VE presenting the findings report to the client’s executive management. The findings report contains the results of the interviews, analysis of the data and recommendations for management on how to achieve greater value from the investments that are being made.

If the client determines that some of those recommendations are to be followed the VE will track the progress of those projects in the Value Optimization phase. This means that the VE must be prepared to stand by their assessment and estimation of value to be realized and do everything they can to ensure that, if the recommendations are followed, those values are realized.

How does it work?

The VE will visit an organization and interview key stakeholders for 30 to 60 minutes each. Within two weeks the VE will return and present their findings.

The VE will need to be able to meet with key stakeholders for the business processes being analyzed. There must be no attempt to develop or, worse still, sell any solutions in these meetings.

Interviews, ideally, should be in person. The questions asked will elicit from the interviewees how these they view the current process, practices and procedures in their organization. In addition certain metrics will be gathered. All of this information will be held in the strictest of confidence.

Following the interviews the VE will process the data, analyze the results and develop the report. This takes about 5 days.

What is in the report?

The report is in four sections.

The Market Analysis describes key industry trends that affect the client. It contrasts and compares those to the client’s stated goals and objectives obtained from the interview process and analysis of the client’s outward facing communications. In addition this section will describe how similar sized organizations are addressing the same challenges.

In the Summary Data Analysis section of the report the key areas of strength and the key areas for concern will be identified. Once again these data will be contrasted with those of similar sized organizations and against industry data. This section of the report provides the key value to this entire process. It shows how well you are applying the current business disciplines and compares the results you are getting to those of your peers.

In addition to the summary information provided in the summary there is a full analysis of all the data in the Complete Data Analysis section of the report. This shows all the findings but does not give all the contrasts to industry and peer data. Information in this section is aggregated and anonymous.

The final part of the report is a Client Presentation, which is delivered in person, at the Value Realization Presentation. This summarizes the information in the report and focuses on the key findings and key recommendations.

The presentation and the report are left behind for the client who can then represent to their senior management if required and for further analysis of the detailed data in the findings.

About Kevin

In the past year Kevin has spoken at 20 conferences and seminars on a range of leading IT topics, including methodologies, business analysis, quality assurance techniques, governance, open source issues, tool interoperability, release management, DevOps, Agile, ITIL, from the mainframe to distributed platforms to the web, mobile, wearable and embedded systems. He is a much sought after speaker, recognized around the world for his provocative and entertaining style. Kevin is a 40 year industry veteran, holder of three technology patents and today is VP of Worldwide Marketing and Chief Evangelist at leading Application Development and Deployment vendor Serena Software. In the past decade he has been crossing the globe and has met with over 4,000 people. At Serena he works closely with industry analysts, the press, customers, partners and employees to exchange ideas about industry direction and business issues. He was born and educated in the UK and lives and works in the Bay Area, California.
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