Earlier this year, my colleague, Mark Neasbey and I conducted a particularly interesting Value Management study of proposed major new health facilities in Singapore. One thing that made the study so interesting was a proposal to spend several million dollars extra over the project budget to enable significant flexibility and change over the next 20 years or so.

Value Management and, in particular, Value Engineering, is often described as just another form of cost-cutting (which should never be the case, but sadly it sometimes is the case). I’ve written about this in other places, emphasising the fact that whether we are referring to Value Management or Value Engineering, we must always focus on value (as discussed in the three previous notes). Cost-cutting should be called for what it is – anyone can cut costs – and the world is peppered with the consequences of people cutting costs without considering value. I have seen a quotation that says of someone, “He knows the cost of everything, but the value of nothing”.

But in this case in Singapore recently, we surely put to death the argument that VM is always about cost-cutting because the strong recommendation at the end of the workshop was to spend many millions of dollars extra in order to give much better value for money in the long term.

As I reflect upon my own journey in Value Management over the last 25 years or so, I know that, in my early days, I would have considered a recommendation to spend many millions of dollars extra over the budget a complete failure in Value Management terms. My colleague, Ross Prestipino tells the story about a Value Engineering conference that he attended in the USA, where a Value Engineering practitioner told him that amongst her clientele, she would never get another job if she didn’t deliver cost savings for her client.

There are times when clients need to make savings and the Value Management process can certainly help them do that but it will do so only in the context of delivering best value for money – not simply reducing cost per se.

The Singapore exercise clearly demonstrated that where there is a mature client who is prepared to consider the long-term and genuinely seek best value for money, the VM process can be of enormous benefit. Bring together all of the key stakeholders into a VM workshop. Clearly define where value lies in the proposed new entity (the value statement). Consider various cost comparisons of ways to deliver that value (as described in my last three articles). Then make informed judgements as to which option will deliver best value for money. The rigour of this process provides enormous confidence in the recommendations.

There’s something to think about!