VALUE ASSURANCE

Value, risk, performance and quality management considerations are inextricably linked. Proper understanding of these aspects - from the outset of planning for any new venture - is required to avoid delays in funding approvals and the cost of rework due to changing expectations.


Full confidence in value, performance and risk information is essential for key decisions made by management, boards and external stakeholders.

Value is the targeted, higher order requirement and takes into account the total cost of ownership,  as well as compliance with stakeholders' requirements (e.g. implementation scheduling, sustainability issues, quality standards, reliability of performance, appropriate quality, affordability, practicality of long-term maintenance) and level of comfort with potential risk scenarios.  A substantial gap can exist between the approved business and the final outcomes of a program or projects.

Value Assurance (VA) is a pro-active process, applied before the final investment decision (pre-FID), to identify strategies, drive new initiatives and to address economic and sustainability goals, along with defined levels of business and reputational risks tolerance. VA is applied to:

a)  determine strategic choice

b)  enhance program and project value 

c)  demonstrate that optimum value has been derived.

In so doing, Value Assurance ensures, and proves to senior management / stakeholders, that the most appropriate aspects have been addressed adequately and that best value for money will be obtained within controlled risk parameters.   

Note.  Program & Project Assurance (PA) supports Value Assurance for large scale and complex endeavors, - after the final investment decision (post FID). Project Assurance reviews (PAR) ensure that the program or project(s) will perform as planned / approved and achieve the required value as specified in the business case and the approved, front-end investment decision.

          This is described further on our Team Focus website, www.teamfocus.org


Key Features of Value Assurance

Value Assurance synchronizes proceedings with the natural pace of specific organizations and projects.  Additional attributes of the process are:

•   Accelerates program / project progress 

•   Clarifies issues and available choices

•   Builds consensus amongst stakeholders on issues and areas of concern

•   Identifies & develops creative options

•   Enables informed decision-making for sustaining results

•   Improves communication between “shop floor” and the executive 

•   Provides a systematic and measured response for the choices of incremental or breakthrough performance improvement.

Approach to Assuring Value

So often, project development and / or implementation teams are unaware of the value expected from their undertakings.  For example, some issues are:

  • Return on investment (R.O.I.) criteria are not evident and therefore not necessarily attained
  • Representation from the business unit is often missing during project development
  • Key knowledgeable persons are lost to the next critical project
  • Information may not have been passed on and many assumptions may be made by the next wave of project people.
​​​​​​​​​​​​​​

The VA process promotes a balanced, “bottom-line” performance approach through equitable treatment of considerations such as:

  • Finance
  • Functionality, effectiveness and quality 
  • Output performance (budgetary and scheduling)
  • Environment
  • Social aspects 
  • Security & safety
  • Stakeholders’ needs and wishes
  • Sustainable outcomes.

The process and outputs of a value assurance program are proof to senior management and stakeholders, over the longer term, of attainment of best value at the program level, and comprise:

  • Strategic choice – the formulation of clear, unambiguous, strategic direction to enable approvals, funding and subsequent orientation of the development/implementation team 

  • Program / Project value enhancement and continuing value improvement for finessing proposals to optimum quality, functionality and cost parameters

  • Formal certification of best overall program / project value. 

image-783801-Value_Search5.png

1. Strategic Choice

The Value Assurance process is an overarching, navigational technique to ensure high value strategies and initiatives for taxpayers / shareholders through:

  • Business Process Improvement to identify strategic change mechanisms, and, 
​​​​​​​​​​​​​​
  • Strategic Performance Alignment to develop a framework and identify options for deriving balanced solutions to complex or divisive issues, - taking into account financial, legal, political, regulatory, scheduling, resourcing and technical implications.

A Value Assurance review (VAR) may highlight specific areas for attention which can lead to further review through a Performance Innovation Review, see Program/Project Enhancement below.​​​​​​​

Successful portfolios and programs require alignment of expectations, robust project management and assurance of results along with best value for shareholders/stakeholders.  ​​​​​​The process and outputs of a value assurance program are proof to senior management and stakeholders, over the longer term, of attainment of best value at the program level, and comprise:
  • Diagnosis of performance of existing operating systems and processes, along with potential for improvement

  • Strategic choice – the formulation of clear, unambiguous, strategic direction to enable approvals, funding and subsequent orientation of the development/implementation team

  • Value enhancement and continuing value improvement for finessing proposals to optimum quality, functionality and cost parameters

  • Oversight monitoring & reporting of progress to executive management
​​​​​​​​​​​​​​
​​​​​​​For a program, or large project of sub projects, a gateway review process provides for a series of short, focused, independent expert reviews, held at key decision points in lifecycle.  Gateway reviews are appraisals that highlight risks and issues, which if not addressed may threaten successful delivery. 

Reviews are conducted by experienced review personnel who typically critique a range of strategic and technical aspects. The independence of such a critique is key to delivering objective, high quality assessments and review reports to enable sound decision-making.


2. Program / Project Value Enhancement

Performance Innovation reviews are used to address critical, emerging issues and enhance delivery of 

a) existing services, and, 

b) new capital programs / projects (and are generally conducted post FID). 

Along with developing high performance teams, the multi-step, process utilizes several focusing modes following a specific sequence.  This closes the “performance gap” through a deep dive, as necessary, for assessment and resolution of concerns through:

  • Functionality & Efficiency enhancement - to increase throughput and return-on-investment of ongoing service delivery, and,​​​​​​​​​​​​​​
  • Planning & Performance optimization - to establish or improve the projected whole life performance of new capital schemes.
image-896754-Related_Tools_Techniques-45c48.jpg

Key stages involve the following activities, preferably at senior management level:

  • Conducting a strategic diagnosis and committing appropriate resources
  • Setting value standards, metrics and targets
  • Developing value profiles and integration of these to a multi-attribute, value assurance index for measuring and illustrate project performance 
  • Analyzing specific needs, exploring options and developing creative solutions to issues arising
  • Formulating sound recommendations and charting a path through the approvals process
  • Implementation and controlling of long-term outcomes
  • Monitoring overall progress and adjusting to suit changing conditions.

3. Certification of Optimum Value

Certification of best overall value assures approving authorities and stakeholders that the program or project has been developed, using the above processes and steps, through suitably qualified and experienced persons.

The certificate is signed by an accredited value assurance professional prior to the final investment decision (FID).  The certificate of best value applies only to the program project as defined at the time of recommendation for the final investment decision. As part of the subsequent project assurance process for large and complex endeavors, performance assurance reviews should be conducted to ensure compliance with the content and supporting metrics of the FID and ensure accomplishment of anticipated outcomes.

Immediately following FID approval, a comprehensive, the updated Value File is passed forward to the subsequent program/project implementation team, for guidance on expectations of value and performance. A formal value file is the anchor for ensuring optimal performance and consistency of approach, such that the forecast value is realized in due course.  Normal performance and quality certifications will be necessary during the implementation of the program / project.
© 2009 - 2019, valueassurance.org. All rights reserved.
Any actions taken as a result of information on this website or related links is strictly at your own risk. We will not be liable for any losses or damages in connection with the use of our website.