Value pic 2.jpg
Adapted from Source: Dale Olson Consluting (2009)

Alternative name(s)

At times it can be confused with Value Engineering.

Description


Customer value frequently can be seen as subjective; each stakeholder will have a different perception of value in every project. Project success is dependent on whether a given criteria is met; having specific and detailed requirements is needed and recorded, which is done through a process (Sacandi, 2012). ‍From this value management can be described as the maximizing of value in relation to the stakeholders and the overall project objectives, functions and performance (Dallas, 2011;Stevens, 2012). A famous practice through which Value Management is delivered in projects is "implement and share outputs"; creating a strategy for executing established value improvement proposals and monitoring progress, this relies heavily on customer feedback and stakeholder satisfaction. ‍Value management must aim to find common ground between all stakeholders to avoid conflicts and tensions between the stakeholder group involved in the project.

Agile values


Value Management is supported by the values of agile project management. In particularly customer collaboration over contract negotiation; the client will be an active participant during the project for the reason that the value criteria will be composed using their requirements. Agile project management is carried out in iterations meaning that as one value is created plans for another will begin resulting in the client being involved throughout the project and providing the team with feedback (Hass, 2007). However, if contracts were used there will be minimal feedback from the client and value will have to be stated before the project can begin. This reduces the chances of value creation, however reduces the degree of risk in relation to the contractor.

In addition the value proposition involves the agile value known as individuals and interactions over processes and tools. After an increment is completed the project team will engage in meetings in order to study customer feedback. This provides the ideal environment for brainstorming in order to bring forth concentration on value for investment and business applicability. Furthermore, in agile project management planning occurs throughout the process; meaning that participation of an efficient team, customer or product owner is necessary.


Agile principles



Value Management can be related to Agile manifesto principles, which gives highest priority to satisfy and to involve the customer by working together throughout the project. Value Management carries along key stakeholders; by integrating their objectives so that there is balance between the project output against the overall resources used thereby maximizing value. It also aims at involving the user and the supplier's interest on the business, in order to achieve a value adding culture
Another Value Management practice suggests learning from experience and constantly improving on the deliverable. Value management takes into consideration experiences from past projects and improves on them. This relates to the Agile principle about reflecting on how to become more effective and adjusting behaviors accordingly. In Value management roles and responsibilities are clearly defined in order to build a supportive culture, which can also be seen in Agile Project Management, where team members are supported in their needs.
The manifesto states that Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain constant pace indefinitely. This relates to value management as sustainable development increases business value.

Agile practices

Bringing together ideas learned and sharing with others in the organization for continuous improvement can be linked to the Agile practice of the "Daily Standup" meeting as it appears to be a very efficient way to share ideas with other members.
‍Value Management practice which involves obtaining data related to the project, gathering the outcomes expected after the Value Management study, recognizing the appropriate Value Management team members, making sure that the stakeholders needs and other project related information are properly identified and understood, these are practices that define value management.‍ This practice can be linked to the Agile's"Release Planning" (Cohn, 2009), ‍where technical and business decisions are made.
‍Another Value Management practice is "process information", which comprises in working together with the Value ‍Management team to use the already gathered and analyzed information to develop innovative and value improving proposals‍. In fact this practices can be related to the Agile practice called "Iteration planning" this is also known as "Spring planning" in Scrum, where at the beginning of each iteration the team meets to produce an iteration plan of development tasks.

Discussion

Value management in a traditional operating organization will be a function/ plan driven approach; it look to constrain project cost and time. The scope and quality is usually agreed and presented with contracts; allowing for clear goals and objectives. However this leaves little room for change, customer feedback, improvement and further value creation (Hass, 2007). Traditionally the customer may not see or experience the product until the end. This eliminates the agile values associated with value management. Agile Project Management takes time and cost first and drives itself with value and vision. This makes for continuous value development which will achieve optimal advantages for the initial investment, which may result in a greater level of customer satisfaction.
In agile project management planning take place throughout the project life cycle. However, value management in an agile context will have to take place throughout the process to get feedback after every iteration,‍ to ensure product owner and client satisfaction. The product owner will have assumptions and decisions on the acceptance criteria of each user story, this probes conversations with the customer, this also provides a minimal requirement of the user story once development takes place. (Cohn, 2006).


Links from this KA to other KAs


Value Management can be easily related to Stakeholder management and Resource management. First of all it focuses on the need to identify, improve and achieve a balance between the needs and the requirements of stakeholders involved in the project. Second of all, value management looks into the resources needed to achieve this. It can be argued that risk management and value management are linked because eliminating risk tends to add value, furthermore, increasing the value in relation to stakeholder requirements decreases the uncertainty for product owner and client, ensuring project deliverable being accepted. Value management is also related to value stream mapping, value management can be improved by using value stream mapping practices. Focus on customer value management can also increase customer values in the project.

References


Cohn, M. (2006) Writing Contracts for Agile Development. [Online] Available at:
http://www.mountaingoatsoftware.com/articles/writing-contracts-for-agile-development [Accessed: 21 February, 2013].

Cohn. M. (2006) Why Do Release Planning? [Online] Available at:
http://www.mountaingoatsoftware.com/blog/why-do-release-planning [Accessed: 21 February, 2013].

‍Dale Olson Consulting: Project Management & IT Leadership (2009) Waterfall vs Agile: The Paradigm Shift. [Online] Available at:
http://www.daleolsonconsulting.com/blog/2009/05/03/waterfall-project-management-vs-agile-project-management-the-paradigm-shift/ [Accessed: 14 February, 2013].

Hass, K.B (2007) 'Tips and Techniques: The Blending of Traditional and Agile Project Management' PM World Today. 9(5) May. pp. 1-8. [Online] Available at:
http://www6.conestogac.on.ca/~set/courses/year2/sq-i/documents/BlendedAgileTraditionalPM.pdf [Accessed: 8 February, 2013].

Michael Dallas (2001) Best Management Practice: Management of Value. Available at http://www.best-management-practice.com/gempdf/MoV_Mini_Brochure.pdf [Accessed: 11 February, 2013]

Sancardi. P (2012) Value Management and Value Engineering for Any Project. Available at
http://projectmanager.com.au/managing/cost/value-management-and-value-engineering-for-any-project/ [Accessed: 8 February, 2013].

Steven, D.& Hastie, S. (2012) Dennis Stevens on Value Management in Agile Projects. InfoQ. Availiable at:
http://www.infoq.com/interviews/dennis-stevens-value-management [Accessed: 13 February, 2013].






External links


Read in another language


‍<If available, include links to pages with translations to other languages>

v