Project Value Management (PVM) Dr Jim Young. Jim Young. Lives in Lower Hutt. A ttended Duntroon Military College (Australia) and spent 18 years as officer in NZ Army. Regional Manager Transpac Ltd (road transport), then went back to university, and qualified as a project manager.
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To familiarise you with the principles and process of project value management (PVM)
you the use of some tools
This presentation will take about one hour.
Presentation slides and a “white paper” on the topic will be available on your university website.
The PVM concept was born with General Electric during World War Two when there were severe shortages of labour, materials and component parts.
The company looked for new methods and substituted local materials and components that would perform the same function.
PVM is the formal and systematic study of a project to identify ways to achieve the functions involved and resolve issues at lowest cost without loss of performance.
Some equivalent expressions are Value methodology, Value Analysis, Value Engineering and Value Optimisation.
The earlier that PVM intervention occurs during the life of the project, the greater is the potential for added value.
Value-adding options are:
To ensure that the benefits of applying PVM are justified, the cost of the following items needs to be considered:
project purpose, goal, objectives, assumptions, success criteria, feasibility study, business case, charter, designs, drawings, specifications, work breakdown structure, estimates, risk and issues logs, project plan, budget and schedule, and progress reports if project already underway.
PVM participants attend a one or two day workshop where:
Having clarified the issues and need for selected functions, alternative solutions are then sought typically through group brainstorming for issue resolution, improved functionality and cost reduction. Such ideas must not impair project performance. The usual rules for brainstorming apply:
Options are now evaluated in against pre-determined and weighted-attributes such as:
Some tools and techniques that might be used to evaluate and decide best options to improve the project’s functionality and/or cost and resolve issues are:
A process can usually be broken down into tasks that may be undertaken either concurrently or sequentially.
Suppose Victoria University commissions a project to provide students with free footwear. First the decision-makers identify appropriate criteria or attributes to assess shortlisted suitable footwear options and prioritise these using a paired-comparison’s technique:
Next the prioritised attributes go into a decision matrix. We give each attribute a weight (from say 1 to 10) that represents its relative importance, and then evaluate each option against each attribute, scoring them (where say excellent is 5, satisfactory is 3, and adequate is 1). In this instance Option B scores highest.
PVM is a powerful strategy that focuses on delivering better project value.
Bring these essentials together and PVM will payback as a positive intervention.
And many thanks and good luck with your studies!