Value and Risk Management – A Guide to Best Practice

<p>Foreword xi</p>
<p>Preface xiii</p>
<p>About the Author xvii</p>
<p>Acknowledgements xviii</p>
<p>1 Key features and benefits 1</p>
<p>1.1 Why successful projects need value and risk management 1</p>
<p>1.2 Delivering success 1</p>
<p>1.3 Summary 7</p>
<p>2 Principles of value management 9</p>
<p>2.1 Essential attributes 10</p>
<p>2.2 A brief history 11</p>
<p>2.3 Language 13</p>
<p>2.4 Concepts 13</p>
<p>2.5 The family 15</p>
<p>2.6 Value management through the project cycle 17</p>
<p>2.7 The generic process 19</p>
<p>2.8 Value or cost balancing benefits and investment 22</p>
<p>2.9 The value of time 25</p>
<p>2.10 Quality 26</p>
<p>2.11 Measuring value 29</p>
<p>3 Principles of risk management 33</p>
<p>3.1 Essential attributes 34</p>
<p>3.2 Evolution 35</p>
<p>3.3 Language 37</p>
<p>3.4 Concepts 37</p>
<p>3.5 The family 40</p>
<p>3.6 Risk management cycle 41</p>
<p>3.7 A generic risk management process 41</p>
<p>3.8 Risk to quality 43</p>
<p>3.9 Measuring risk 44</p>
<p>3.10 Contingency management 49</p>
<p>3.11 Time risk 49</p>
<p>4 An integrated approach to value and risk management 52</p>
<p>4.1 Why integrate? 53</p>
<p>4.2 The integrated process 57</p>
<p>4.3 Timing 58</p>
<p>4.4 Project stages and study types 61</p>
<p>4.5 Understanding the client s business 66</p>
<p>4.6 Programmes of projects 69</p>
<p>4.7 Project launch studies 70</p>
<p>4.8 Summary of value and risk study types 72</p>
<p>4.9 Critical success factors 76</p>
<p>4.10 A framework for introducing value and risk management into an organisation 77</p>
<p>4.11 Embedding value and risk management in an organisation 81</p>
<p>4.12 Drawing on experience 83</p>
<p>4.13 Selecting the appropriate level of activity 86</p>
<p>5 People 88</p>
<p>5.1 The people and their roles 89</p>
<p>5.2 Collaboration versus confrontation 89</p>
<p>5.3 Stakeholder analysis and management 91</p>
<p>5.4 Team building 92</p>
<p>5.5 Partnering 92</p>
<p>5.6 Communications 95</p>
<p>5.7 The supply chain 97</p>
<p>5.8 Selecting the study team 100</p>
<p>5.9 The study leader 103</p>
<p>5.10 Styles of leadership 105</p>
<p>5.11 A study structure based on logic 105</p>
<p>5.12 Overcoming difficulties 107</p>
<p>5.13 Using conflict to advantage 110</p>
<p>5.14 Gaining consensus 111</p>
<p>5.15 Developing value and risk culture 112</p>
<p>5.16 Language 114</p>
<p>6 Concepts, standards and qualifications 117</p>
<p>6.1 Understanding value and risk 118</p>
<p>6.2 Understanding value 119</p>
<p>6.3 Understanding risk 140</p>
<p>6.4 Training and certification systems 150</p>
<p>7 Learning from others 154</p>
<p>7.1 Practice in other sectors 154</p>
<p>7.2 A value and risk approach to project development 155</p>
<p>7.3 Soft value management 161</p>
<p>7.4 Value management in manufacturing 164</p>
<p>7.5 Value management for public services 168</p>
<p>7.6 Risk and enterprise 174</p>
<p>7.7 The impact of partnering on value and risk 183</p>
<p>7.8 Just how mature are your organisation s processes? 188</p>
<p>8 Study types 193</p>
<p>8.1 Types of study 194</p>
<p>8.2 Value management studies 194</p>
<p>8.3 Risk management studies 218</p>
<p>8.4 Combining value and risk reviews 226</p>
<p>8.5 Project reviews 227</p>
<p>8.6 European practice 230</p>
<p>8.7 The project cycle 230</p>
<p>8.8 Building on experience 231</p>
<p>9 Techniques for value and risk 234</p>
<p>9.1 The need for techniques 235</p>
<p>9.2 Preparation before a study 235</p>
<p>9.3 Invitation to participate 244</p>
<p>9.4 The workshop 245</p>
<p>9.5 Recording 250</p>
<p>9.6 The wrap–up meeting 250</p>
<p>9.7 Reporting 251</p>
<p>9.8 Reviewing progress 252</p>
<p>9.9 Whole–life costing 254</p>
<p>9.10 Stakeholder analysis 259</p>
<p>9.11 Partnering 263</p>
<p>9.12 Mind mapping 269</p>
<p>9.13 The Delphi technique 269</p>
<p>10 Value management techniques 271</p>
<p>10.1 Value management techniques 271</p>
<p>10.2 Function analysis 272</p>
<p>10.3 Function analysis system technique 274</p>
<p>10.4 Cost/worth 282</p>
<p>10.5 Multifunctionality 284</p>
<p>10.6 SMART methodology 285</p>
<p>10.7 Value drivers 287</p>
<p>10.8 Value profiling (or value benchmarking) 291</p>
<p>10.9 Option selection 292</p>
<p>10.10 Weighting techniques 293</p>
<p>10.11 Generating ideas for adding value (creative techniques) 295</p>
<p>10.12 Selecting the best ideas (evaluation) 300</p>
<p>10.13 Developing implementation proposals 305</p>
<p>10.14 Scenarios 306</p>
<p>10.15 Target costing 307</p>
<p>10.16 Function performance specification 308</p>
<p>11 Risk management techniques 311</p>
<p>11.1 Risk management techniques 311</p>
<p>11.2 Risk analysis and management 311</p>
<p>11.3 Identifying risks 314</p>
<p>11.4 Assessing risk 319</p>
<p>11.5 Managing risk 326</p>
<p>11.6 Optimism bias 335</p>
<p>11.7 Construction, design and management regulations 338</p>
<p>11.8 Risk breakdown structures 338</p>
<p>11.9 Failure modes and effects analysis 340</p>
<p>11.10 Hazard and operational studies (HAZOP) 341</p>
<p>12 Toolbox checklists, forms and tables 343</p>
<p>12.1 Toolbox summary 343</p>
<p>12.2 Briefing checklist 343</p>
<p>12.3 Information checklist 344</p>
<p>12.4 Study toolkit 345</p>
<p>12.5 Workshop invitation 346</p>
<p>12.6 Recording information generated during the workshop 346</p>
<p>12.7 Reports 348</p>
<p>12.8 Value management categories/prompt list 349</p>
<p>12.9 Risk identification prompt list 351</p>
<p>12.10 Value profiling proforma 354</p>
<p>12.11 Option evaluation matrix 355</p>
<p>12.12 Weighting tool 355</p>
<p>12.13 Paired comparison proforma 355</p>
<p>12.14 Proforma for whole–life cost estimating 356</p>
<p>12.15 Scenario building form 357</p>
<p>12.16 Whole–life cost checklist 357</p>
<p>12.17 HAZOP analysis sheet 357</p>
<p>12.18 Room layouts 358</p>
<p>Appendix A: Bibliography 362</p>
<p>Appendix B: Glossary 365</p>
<p>Index 376</p>