Can value engineering help balance project costs and objectives?
- Navaz Chichger
- Aug 2, 2024
- 3 min read
3 things to keep in mind if you’re thinking about applying value engineering practices to your project
No matter what project you are undertaking (whether refurbishing a heritage building, upgrading local transport infrastructure, or constructing new community facilities), you will be working with a limited budget and finding ways to boost value for money will be front of mind. Value engineering can be a helpful technique to support your efforts to optimise project value, whilst balancing quality and costs.
What is value engineering?
The Project Management Institute (PMI) defines value engineering as:
“(…) a function-oriented and multidisciplinary approach for planning building projects using a multi-disciplined team to identify and reduce unnecessary costs and poor performance, while maintaining product quality [1]”.
Value engineering is a sub-set of value management activities that take place once the major value drivers for the project have been identified and agreed upon through value planning. In essence, value engineering can help project managers to determine cost effective ways to meet project requirements without sacrificing the quality or functional or operational aspects of the job.
This principle can be applied in an urban, peri-urban or rural context, and aims to benefit people and nature simultaneously.
Thinking about applying value engineering practices to your project?
Here are 3 things to keep in mind if you are considering value engineering as part of your project planning:
1. Understand what value means for your project
Every project is different – and individual stakeholder perspectives of what is valuable often differ too. Any value engineering process should, therefore, begin with a thorough understanding of what value means to the project and the prioritisation of stakeholder needs, expectations and requirements. Having a good handle on what is valued most guides decision making, providing a firm basis for analysing and evaluating solution ideas and alternatives. A clear and aligned set of project priorities will help avoid any misapplication of value engineering, and the risk of focusing on project elements that could compromise value.
2. Apply value engineering early on to get the best results
Value engineering can be used at any stage of a project’s life cycle, from early design stages through pre-construction phases and into delivery. However, value engineering activities can be particularly effective during the early stages of planning and design. This is when the project team is working progressively to define and balance the project scope, budget and schedule in greater detail. Applying value engineering in these early stages typically allows for more flexibility and creativity in exploring alternative solutions to support decision-making. It is also often the case that there is a greater cost-benefit from the early implementation of any value engineering decisions on the project.
3. Assemble the right team and factor in time to time to properly analyse and verify application and credibility of proposed value engineering changes
Done well, value engineering needs collaboration and creative thinking from a multi-disciplinary team. It is often a good idea to get your technical or design consultants to lead, but don’t forget to bring in expertise with operations and facilities knowledge along with project cost and commercial specialists. All participants should have a sound understanding of the project, should undertake some research and thinking beforehand, and should be authorised to speak on behalf of their area of responsibility. Having the right people involved will ensure that ideas generated are properly assessed in terms of potential impact on value, balanced with cost and feasibility. Make sure you factor in time to complete necessary activities to properly analyse and verify the impact of proposed value engineering changes.
In summary
Value engineering can be of significant benefit to your project, helping to optimise value whilst balancing quality and cost. It begins with understanding what value means for your project, should be applied early to get the best results, needs the right people involved, and verifying the application and credibility of proposed value engineering changes deserves time. To find out more about value engineering methods and the benefits to successful project management see the links to useful information below.
Navaz is a Chartered Project Manager at Arup with extensive advisory and project delivery experience at both project and major programme level. Navaz is skilled at planning and managing projects and programmes for client organisations.
If you have any questions on this topic, or would like support, please contact your Delivery Associate, or email DeliveryAssociatesNetwork@Arup.com
References and Footnotes
[1] Sievert, R. W. (1991). A review of value engineering as an effective system for planning building projects. Project Management Journal, 22(1), 31–38.
Links to useful information:
RICS guidance note, UK 1st edition, January 201
