MoV® Management of Value Foundation Exam Simulator

Rationale: Value Engineering (VE) is applied to ensure the delivery of maximum value to the stakeholders of a project. The primary aim of VE is to examine and analyze the key factors that contribute to project value, including function, cost, time, and quality, and to create value-improving proposals that optimize these factors. VE provides a systematic process to identify areas where value can be improved and resources can be saved, and it is used to achieve better results within the constraints of a project's schedule and budget. VE helps to foster creativity and innovation within a project team by encouraging the exploration of new ideas and approaches. The proposals developed through VE are not only implemented by the project team but they are also subjected to a rigorous process of measuring and auditing to ensure that optimal value is achieved.

Quotes:

• "When selecting value-improving proposals for implementation, it is not normally necessary to have completely accurate cost estimates for either the benefits or implementation costs to make a decision as to whether or not to implement."
• "A key output from an MoV study is the acceptance of value-improving proposals for implementation into the project under study."

References:

• MoV Handbook, pages: 40, 55.

Rationale: The consideration of staff availability can be critical in implementing MoV best practices, as these methods require trained and experienced staff to execute. Staff who are already stretched thin or lack the relevant skills can impede the effectiveness of MoV activities, thus making it important to consider their availability at the outset. Nevertheless, MoV activities should be tailored to reflect the size, complexity, and strategic importance of the programme or project, ensuring that staff who are assigned to MoV activities have the requisite experience and skills for that stage of the project. However, MoV policies and practices can be adapted to meet varying project needs and improve operational performance, thus requiring that management engage in a critical assessment of the organization’s strategic goals, resource availability, and team capabilities to ensure successful implementation of the MoV framework.

References:

• MoV Handbook, pages: 21, 22, 93.

Rationale: Organizations resort to an MoV study to get the maximum value from their investment, which entails delivering the expected benefits in the most cost-effective way possible. Therefore, to judge the return on investment of a MoV study, it is essential to ensure that the MoV processes are followed. MoV processes refer to the logical sequence of procedures and techniques that should be applied to take a team through an MoV study to improve benefits and minimize resource utilization. Following these processes can lead to optimized performance and a robust audit trail that showcases the achievement of optimal value from the investment.

References:

• MoV Handbook, pages: 30, 127.

Rationale: Facilitating optimal balance between investment and long-term operating expenditure is a key aspect of MoV. By taking a structured, rigorous approach to the decision-making process, MoV provides a means to identify opportunities to increase benefits and performance while reducing the use of resources. This is particularly important for organizations operating under budget constraints or other resource limitations. Additionally, MoV encourages effective consultation and engagement with stakeholders and supports sustainable decision-making by considering both monetary and non-monetary factors. These benefits have been demonstrated across multiple sectors, including public and private organizations, and implementation of MoV has proven to be a wise investment with substantial returns in terms of cost savings and enhanced performance.

Quotes:

• "Facilitates optimal balance between investment and long-term operating expenditure."

References:

• MoV Handbook, page: 6.

Rationale: When it comes to determining what should be included in a value profile, it's important to ensure that all stakeholders have a say. This includes those who use the product or service (End Users), as well as those who are responsible for the programme or project (Programme owners or Project Sponsors). While the project team may play a role in the assessment process, the key stakeholders must be the driving force here. By involving them in the decision-making process, you are more likely to arrive at a balanced value profile that accurately reflects the priorities of the stakeholders involved. Functional experts and MoV Study Teams can certainly play a role in developing the value profile; however, they should not be solely responsible for determining value priorities. Ultimately, involving the right stakeholders and adopting a collaborative approach will produce the best results when creating a value profile.

References:

• MoV Handbook, page: 50.

Rationale: The MoV guide explains the seven groups of processes used to deliver MoV in programs or projects. The seven processes are "Frame the program or project", "Gather Information", "Analyze Information", "Process Information", "Evaluate and Select", "Develop Value-Improving Proposals", and "Implement and Share Outputs". Among these processes, Framing the program or project is the first process on the list. It examines how MoV informs the business case, therefore supplementing existing information through specialist techniques. This process is essential because it sets the foundation for each of the succeeding processes. By selecting this process, the MoV team can align the project with the goals of the program or the organization.

Quotes:

• "Frame the programme or project This examines how MoV informs the business case, supplementing existing information via specialist techniques."

References:

• MoV Handbook, pages: 13, 27.

Rationale: Cost-benefit analysis (CBA) is an important tool in MoV studies, as it allows practitioners to assess the costs and benefits of potential proposals over the long term. By evaluating the value improvement opportunities that have been identified through option selection and process mapping exercises, CBA helps to highlight those options that are most likely to deliver significant benefits to the organization. Moreover, CBA is often used in combination with other tools, such as discounted cash flow analyses, to create more robust business cases for individual proposals by incorporating financial risk assessments. Overall, CBA contributes significantly to an MoV study's overall goal of maximizing value by ensuring that proposed improvements are evaluated objectively and rigorously.

Quotes:

• "Normally used in conjunction with discounted cash flow, it assists business case decisions. Often used in MoV in studies of process or procedure, it can be combined with many other tools, e.g. process mapping and option selection."

References:

• MoV Handbook, pages: 38, 61.

Rationale: MoV uses several techniques to articulate value, but function analysis is one of the most important. By breaking down ideas into their functions, rather than simply looking at what they are, MoV practitioners can identify where value is being created and where improvements can be made. Function analysis helps teams to focus on customer needs and wants, and to identify different ways of performing identified functions. It also encourages creativity and clarity of understanding of project aims. Cost analysis, risk analysis, and benefit analysis are other techniques used by MoV in identifying and articulating value.

References:

• MoV Handbook, pages: 19, 32, 45.

Rationale: To select the most appropriate actions to be taken, it is necessary to evaluate many alternatives and ideas, with a focus on the factors that will positively impact the objectives of the project or business. The idea selection is a critical step that starts with generating value-adding ideas from the team, stakeholders, and the market environment and moves to evaluate each idea by using different criteria, such as feasibility, risks, benefits, impacts, and alignment with the organization's objectives. After that, the top ideas will be shortlisted, and an expert team will work on developing them into full proposals, which will be presented to a decision-making panel for approval and implementation plan agreement. Idea selection is essential for effective decision-making and value realization, increasing project success rate, minimizing risks, and enhancing stakeholder satisfaction and confidence.

Quotes:

• "It is the responsibility of the owner of each selected idea or option (allocated during the selection process) to develop each proposal."

References:

• MoV Handbook, page: 37.

Rationale: Caution should be used in deciding whether to apply MoV to short-term, low-value projects, or in cases where the costs of MoV activities would be disproportionate to the expected benefits. While the process applies to almost any type of activity, the extent to which it will be useful in a given situation is likely to depend upon a variety of different factors. MoV should be applied throughout the whole life of an investment decision, from start-up to retirement of any resulting assets or services, and is especially useful in projects with visible and tangible outputs, such as those in construction, as well as softer projects such as organizing large public events. However, success with MoV may also depend on the specific context and stakeholder priorities involved in a given project or decision. As such, careful consideration should be given to the applicability of MoV in any given situation, including consideration of specific organizational and contextual factors, to determine if it is likely to be effective. "These include projects with visible and tangible outputs, such as those in construction, as well as softer projects such as organizing large public events or lobbying for support."

References:

• MoV Handbook, page: 53.

Rationale: The brainstorming technique generates a large number of ideas during the creative sessions, regardless of their merits, by temporarily suspending criticism, evaluation, and analysis of the ideas. Participants are encouraged to come up with as many ideas as possible, even far-fetched or highly improbable ones, with the emphasis being on the rapid generation of ideas. These ideas may have variable merit, and this diversity is seen as an advantage of the technique, as it helps the team generate a greater range of creative solutions and promotes a more inclusive approach. These ideas are recorded for future evaluation and analysis. Brainstorming is an important technique for identifying opportunities and creative solutions to problems and can complement other techniques in generating innovative ideas for improving value.

References:

• MoV Handbook, page: 58.

Rationale: Function Analysis is a technique used in MoV to understand the key drivers of value and help to identify investment opportunities for improvement. While brainstorming can be used to generate new ideas, it is not a specific method of Function Analysis. On the other hand, both Value-Improving Proposal and Discounted Cash Flow are techniques used to evaluate investment opportunities, but they are not specifically methods of Function Analysis. In contrast, Value Tree is a main method of Function Analysis that can be used to break down a complex problem or goal into a hierarchy of parts that can be analyzed and optimized for value. Therefore, the most appropriate answer to the question is option "Value Tree".

References:

• MoV Handbook, pages: 19, 49.

Rationale: "Minimizing capital cost" does not align with the values the hospital is offering to society (according to the sample Value profile provided in the MoV manual). Hospitals are focused on delivering high-quality care to patients and ensuring their satisfaction, which may require investment in capital and resources. Therefore, minimizing capital cost would not be a key driver of value in a hospital's value profile and would not be included in the value index. The other options listed – optimizing performance, satisfying third-party requirements, and attracting and retaining top staff – are all factors that would be prioritized in a hospital's value profile and would contribute to its overall value index.

References:

• MoV Handbook, page: 51.

Rationale: The effectiveness of a brainstorming session can be greatly enhanced by the use of a guiding model of MoV, such as function analysis, that focuses creative thinking towards specific areas. This technique not only generates more ideas but also ensures that the ideas generated are relevant and practical. Brainstorming without a guiding model may generate ideas that are unrelated or impractical, leading to wasted time and effort. By directing creative thinking towards specific areas, the brainstorming session becomes more structured and efficient, increasing the chances of generating innovative ideas. Additionally, recording and evaluating all ideas, regardless of their merits, can provide a pool of potential solutions that may not have been considered otherwise, leading to greater innovation.

References:

• MoV Handbook, pages: 37, 58, 120.

Rationale: The first step in the Generic MoV Study Plan is to define the study objectives. This is because the objectives of the study determine what should be measured and analyzed to determine whether or not those objectives have been met. Unless the objectives are clearly defined at the outset, it will be difficult to determine whether or not the study is successful or useful. By setting clear objectives, the study team can more effectively go through the remaining steps in the plan, including identifying the necessary functions, prioritizing value drivers, developing value profiles, setting targets for benefit improvement, and developing value-improving proposals.

References:

• MoV Handbook, page: 66.

Rationale: One stage in the approach to MoV implementation is to understand and articulate value. The MoV team needs to understand the organization's priorities for value and be able to articulate them. This allows the team to tailor the application of MoV according to the organization's needs. By prioritizing what aspects of value are most important, the MoV team can focus on where each will create the most benefit. Improving value comes from understanding and articulating an organization's priorities, which provides the key to identifying how value may be added. This stage helps the MoV team to properly quantify the expected improvements and monitor progress in realizing the expected added value. Lastly, MoV includes processes for learning lessons and improving individual and team performance, therefore constantly adding value to programmes and projects.

References:

• MoV Handbook, pages: 13, 65.

Rationale: The concept of the Management of Value (MoV) is to ensure that the necessary balance is achieved within budget constraints by assessing benefits in terms of financial, delivery, and non-financial. By ensuring that the value is increased, which is often related to the benefits, it is necessary to strike a balance between the resources invested and the benefits gained. Reconciling the needs and views of different stakeholders, balancing the use of resources to reflect their availability and organizational priorities and balancing the overall benefits realized against the use of resources are the three key areas where it is necessary to strike a balance to maximize value. This is particularly important when proposing projects since different stakeholders will have varying interests and the resources that are available for the project will often be limited.

References:

• MoV Handbook, pages: 20, 39.

Rationale: The Study Scope is an essential document that provides a framework for an MoV study. It defines the boundaries of the study and sets out the objectives and expectations of the study. One critical component of the Study Scope is any restrictions placed on the study. These may include things like budget constraints, time limitations, or resource availability. By identifying and recording any restrictions placed on the study, the MoV team can ensure that the study is conducted within the relevant limitations. This helps to manage expectations and avoid any misunderstandings or disagreements during the study. Therefore, it is important to document any restrictions placed on the study in the Study Scope.

Quotes:

• "Constraints: restrictions placed on the study, e.g. the outcome must conform to specific parameters. (See also "theory of constraints" in Appendix B for a slightly different interpretation.)"

References:

• MoV Handbook, pages: 101, 105.

Rationale: The brainstorming technique generates a large number of ideas during the creative sessions, regardless of their merits, by temporarily suspending criticism, evaluation, and analysis of the ideas. Participants are encouraged to come up with as many ideas as possible, even far-fetched or highly improbable ones, with the emphasis being on the rapid generation of ideas. These ideas may have variable merit, and this diversity is seen as an advantage of the technique, as it helps the team generate a greater range of creative solutions and promotes a more inclusive approach. These ideas are recorded for future evaluation and analysis. Brainstorming is an important technique for identifying opportunities and creative solutions to problems and can complement other techniques in generating innovative ideas for improving value.

Quotes:

• "Brainstorming can generate a large volume of ideas in a short period of time and will generally ensure that all parties are involved."

References:

• MoV Handbook, page: 58.

Rationale: In MoV, value-improving proposals are important outputs from the study. The responsible person for developing such proposals should have a clear understanding of the proposed solution. Assigning a proposal owner, as explained in section 3.5.1, would be the ideal option as they would be able to provide more insight into the proposal. They will be responsible for developing a detailed proposal with costs and gains tested for sensitivity. If two or more proposals compete, it will be necessary to develop scenarios combining different options to identify the package that adds the most value. Therefore, choosing the right person to be responsible will help in ensuring that the proposed solution delivers the expected value.

References:

• MoV Handbook, pages: 36, 38.

Rationale: The Value Engineering Job Plan is a process employed to carry out Value Engineering (VE) activities. It is comprised of eight steps or phases that must be followed sequentially. The Information phase is the starting point, and it involves carefully examining and gathering information about the project's scope, goals, and challenges. The Analysis phase is the point in the job plan where the gathered information is analyzed to identify where value mismatches occur, and a cost-benefit analysis is carried out to select the best options. The Creativity phase comes after the Analysis phase and involves brainstorming sessions to generate ideas for alternative solutions while still considering the quality and effectiveness of the output. The Development phase is the point where the selected approach is transformed into feasible and effective solutions. Lastly, the Presentation and implementation phases come after the Development phase to present the chosen solution and ensure it is well implemented.

References:

• MoV Handbook, page: 55.

Rationale: A value-improving proposal (VIP) provides a summary of the idea or option that has been selected, which will form the basis of a detailed VIP. The VIP provides all the necessary in-depth information about the selected option, including a cost-benefit analysis, so that the decision-makers, such as Senior Management, can decide whether to implement the VIP in full, partially, or not at all. The VIP includes all the information required to make an informed decision, such as an evaluation of the costs and benefits of the proposal, the potential risks, and the expected value improvements or benefits. The VIP also provides the decision-makers with a clear and comprehensive understanding of what the proposal entails, so they can make an informed decision about whether to implement it or not. Once the VIP is accepted and approved, an implementation plan can be developed, which will provide the details of how and when the VIP will be implemented and the expected value improvements.

References:

• MoV Handbook, page: 61.

Rationale: The MoV Value Engineering Job Plan contains eight phases. These phases include the familiarization with the project, its objectives and goals, establishing an MoV study team and resources, undertaking a functional analysis, creativity phase, evaluation and selection of the best value ideas, developing proposals for implementing the ideas, and finally the implementation of the proposals. The eight phases ensure that there is a systematic approach to MoV studies which guarantees the maximum benefit realization in any project or program. Thus, it is important to understand the eight phases and their associated activities to help effectively implement projects that maximize value for money.

References:

• MoV Handbook, page: 54.

Rationale: Estimating costs can be a challenging task, especially when the scope is uncertain. Nevertheless, in many cases, waiting until the scope is certain may not be an efficient approach. It can take a considerable amount of time, which can also lead to delayed decision-making processes in the organization. Instead, starting with an initial best guess estimate and updating it as more information becomes available can be a more viable option. Initially, rough estimates can always be refined as additional scope information becomes known, enabling organizations to make timely decisions. This approach can also help to identify any potential issues that may need to be addressed in the early stages of a project, contributing to a more efficient project development process.

References:

• MoV Handbook, pages: 57, 61.

Rationale: DCF involves determining the present value of projected future cash flows by discounting them by the required rate of return. Capital costs are initially incurred to establish or improve an asset's operational capacity and are eligible for capitalization. Periodic maintenance costs are typically planned and their amount known in advance, while regular operational costs are the cost for running a business's day-to-day activities. Opportunity costs are the potential benefits that are sacrificed because of a particular course of action. In the Discounted Cash Flow method, the discounted value of diverse costs must be considered such as Capital or one-off costs, Periodic maintenance costs and Regular operational costs, while opportunity costs are not typically involved in the calculation.

References:

• MoV Handbook, page: 57.

Rationale: Senior managers play a crucial role in embedding MoV in an organization. Without the support of senior management, chances are MoV implementation may never take off or succeed. Senior managers can actively engage with MoV and inspire others in the organization to seek ways to maximize value in their activities. They can help align MoV objectives with organizational objectives and ensure that adequate resources are available. With support from senior managers, other key roles like Senior MoV Practitioners and MoV Study Leaders can effectively implement MoV activities within the organization. Therefore, senior managers' support is essential for successfully embedding MoV in an organization.

Quotes:

• "MoV should be actively supported by senior management, clear roles and responsibilities, and a supportive culture throughout the organization."
• "MoV itself cannot be implemented without senior management support and leadership."

References:

• MoV Handbook, pages: 24, 68, 89, 90, 92, 98.

Rationale: The owner of the relevant idea or proposal (proposal owner) allocated during the selection process prepares each Value-Improving Proposal. This approach ensures that the person who is most familiar with the idea or proposal, and who has the expertise to develop it, is responsible for its development. The proposal owner has a deep understanding of the idea and can refine it into a well-defined proposal. By having this level of ownership, the proposal owner is likely to be committed to the proposal, and will likely put in the effort required to develop it successfully. This approach also ensures that the study leader and other stakeholders can be confident that the proposal has been developed by a knowledgeable person. MoV Study Leader will guide the study process and facilitate workshop sessions. It is also important to note that other proposals being worked on must be taken into account during the development of any given proposal. Therefore, understanding who is responsible for what is essential for the success of the proposal owner.

Quotes:

• "It is the responsibility of the owner of each selected idea or option (allocated during the selection process) to develop each proposal."

References:

• MoV Handbook, page: 61.

Rationale: The MoV Project Plan is an essential management tool that aims to describe the purpose of a series of studies to be undertaken throughout the project and how they will be implemented. The purpose of the plan is to identify suitable candidates to lead and participate in the studies, ensure sufficient training resources at the appropriate time, and prepare specific management responses to value-improving proposals. While developing the plan, the focus should be on the process, key decision points, deliverables, nature and timing of the studies, tools and techniques to be used, and glossary of terms. Through this approach, all participants will understand the need for each study, and what improvement is sought. Additionally, it reduces the risk of delay in authorizing the implementation of proposals which ultimately results in the sustainability of MoV in the organization.

Quotes:

• "It will identify suitable candidates to lead and participate in the studies, ensure sufficient training resource at the appropriate time and prepare specific management responses to value-improving proposals."

References:

• MoV Handbook, page: 29.

Rationale: The first phase in the Value Engineering Job Plan is crucial to the success of any study - the "Information phase". It involves gathering the needed data, analyzing all the information collected, and preparing for the workshop. The information-gathering stage involves meeting with key stakeholders, understanding the project, and its purpose, determining the modules that will comprise the workshop, and finalizing the logistics for the study. If the necessary information is not available during the initial meeting, the study leader will continue gathering it over the next few days in preparation for the workshop. Starting with a thorough information-gathering phase helps to ensure that all key participants are better prepared for the workshop and have a good understanding of the problem.

References:

• MoV Handbook, pages: 54, 55.

Rationale: Rewards linked to the achievement of value improvements may be used to motivate staff in MoV. By focusing on maximizing value rather than simply complying with processes, MoV encourages effort and innovation. In the private sector, personal bonuses may be linked to company performance related to long-term prosperity, not just short-term gains. While public sector incentives may need to be considered differently, the importance of delivering value to taxpayers should be emphasized. Implementing customer satisfaction measurement and risk management processes can also enhance value and protect an organization's assets. Ultimately, incentives and processes should be updated regularly to ensure continued emphasis on delivering value.

References:

• MoV Handbook, pages: 41, 97.

Rationale: The Function Analysis Systems Technique (FAST) produces a diagram representing functions and their hierarchy. By breaking down a project into its constituent elements, FAST diagrams enable project teams to understand the roles of primary functions and their lower-order functions within the project. The diagrams are created by asking "how" and "why" to determine which functions and value drivers need to be prioritized to achieve project success. FAST makes the relationship between primary and lower-order functions easy to understand and supports collaboration on the project's objectives. Additionally, by displaying the hierarchy of functions, FAST diagrams enable better risk management and the potential for adding value by providing a more comprehensive view of how the project functions contribute to the desired outcomes.

References:

• MoV Handbook, page: 46.

Rationale: A health check is a useful tool in MoV for reviewing the overall status of an organization's MoV practice. This check aims to analyze the current use and application of MoV in a given organization to identify areas for improvement. By reviewing the current state of the organization's MoV, the organization can formulate action plans to enhance the effectiveness of the practice. Through the health check, the organization can obtain valuable insight into the level of staff awareness and their training needs in MoV and identify gaps and potential opportunities to improve the current MoV process. Furthermore, a health check evaluates the objectives and results of the current MoV practice in the organization and provides insights into where and how their investment management framework can be enhanced.

References:

• MoV Handbook, pages: 14, 87, 119.

Rationale: By making a distinction between Value Engineering and Value Analysis, one can effectively focus on determining which process to employ for improving either a product or an existing process. Value Engineering calls for improvements in evolving designs and hence it is used in the conceptualization stages of design while Value Analysis is aimed at making improvements to existing products. Value Engineering aims to address issues of functionality and cost to ensure that the product delivers value for money while Value Analysis seeks to reduce costs without significantly compromising quality. Therefore, it is important to distinguish between the two and employ them in the appropriate setting.

References:

• MoV Handbook, page: 54.

Rationale: Value drivers are key factors that need to be considered during an MoV study. They are used to evaluate the different options that are under consideration by the study team. Value drivers reflect the key areas of focus for the study and can include both financial and non-financial factors. They help to ensure that a holistic assessment of the options is carried out, taking into account not only the financial implications but also the impact on other areas of the project. Value drivers may vary depending on the nature of the project and the stakeholders involved, so it is important to identify the relevant drivers early on in the study. Ultimately, the aim of evaluating the options against value drivers is to select an option that will deliver the greatest value to the project.

References:

• MoV Handbook, pages: 28, 48, 49.

Rationale: An organisation uses MoV to maximise the overall value delivered across its programme of projects. The intention is therefore to optimise value and not just in one project. Avoiding maximising value within one project (local optimization) that could diminish value across the wider programme aligns with this objective, ensuring optimum balance. Meeting stakeholder expectations is also important because it is stakeholders that can affect or be affected by the programme; therefore, their needs have to be reconciled to realise a balanced outcome that achieves a willing consensus between the different stakeholders. This consensus helps to ensure that the project delivers its expected benefits while successfully achieving the programme goals.

References:

• MoV Handbook, page: 17.

Rationale: The Value Cascade is a framework that provides an approach to incorporating the delivery of value into an organization's objective setting. It includes the measurement of value, which in turn aligns program and project objectives with organizational goals. This allows for decisions to be made that not only meet the objectives of individual projects but also support the strategic objectives of the organization in the context of the specific operating environment. The Value Cascade also identifies value drivers that help identify the primary functions needed to deliver project outputs. From there, the Value Cascade looks at how the program and project objectives reflect value drivers identified earlier.

References:

• MoV Handbook, page: 71.

Rationale: Organizations today face both internal and external factors when it comes to managing value, hence they need to carefully craft their strategy and plans to ensure success. External factors such as political and legal regulations, and environmental influences like carbon emissions can influence the perceived value of an organization. Balancing benefits and available resources can pose an inherent conflict, but through MoV, reconciliation between such conflicts is possible. Therefore, organizations need to understand the environmental influences and work towards a sustainable business model, which can also reflect positively on their overall brand value.

Quotes:

• "MoV addresses and enables reconciliation between the inherent conflicts in objectives combined in this measure by building consensus among stakeholders as to the best balance of benefits to be secured within available resources."

References:

• MoV Handbook, page: 77.

Rationale: The allocation to categories and idea selection matrix is a widely used technique in the process of MoV. The technique helps the decision makers to categorize and select the ideas with the maximum potential to add value. One of the main outputs of this technique is the list of ideas or options that made it to the next round. This list contains the ideas that are considered worthy of further development and evaluation to become value-improving proposals. The value-improving proposals can then be submitted for approval. Therefore, it is crucial to use this technique to ensure that the ideas with the highest potential are being prioritized and developed further.

Quotes:

• "The outputs from the selection techniques above will be a list of ideas or options that warrant development into a detailed value-improving proposal (VIP)."

References:

• MoV Handbook, pages: 60, 61.

Rationale: An MoV Project Plan involves a series of studies to improve value, which is or should be aligned with the organization's key objectives. If there are changes to the business case, such as changes in market conditions or expectations, the MoV Project Plan would need to be reviewed and adjusted accordingly to reflect the new objectives and ensure that value drivers are still relevant and up to date. This will help ensure that the proposed value-improving initiatives are still aligned with the organization's goals and that the resources allocated are being used effectively to achieve maximum value. Failure to review and adjust the MoV Project Plan could result in wasting resources on initiatives that no longer align with the organization's overall strategic objectives.

References:

• MoV Handbook, page: 29.

Rationale: The MoV individual competence model is useful to organizations for the following three criteria: assessing an individual's capabilities and the type of MoV study for which they are suited, recognizing that a fully but recently qualified practitioner will lack the experience to undertake studies on particularly complex projects, and enabling recently qualified practitioners to learn to undertake MoV where human and cultural factors may be significant.

References:

• MoV Handbook, pages: 66, 127.

Rationale: The MoV Study Handbook presents complete guidance for using the MoV method across the entire life cycle of a project or program. It provides information on the MoV principles, processes, and techniques. The MoV Project Plan is a document that outlines what will be done, how, and by whom, during the value-enhancement initiative. The Value-Improving Proposal is a detailed proposal designed to deliver added value to the current project under consideration. The MoV Progress Report summarizes the progress made towards achieving the objectives and adding value. Therefore, depending on the specifics of each project, selecting the appropriate MoV document that contains the detailed evaluation would be determined by the stage of the project life cycle, the target audience, and the purpose of the report.

References:

• MoV Handbook, pages: 38, 105.

Rationale: The Option Evaluation Matrix is an excellent tool used in selecting alternatives (from a small number of options) for a given project or programme and categorizing and evaluating options against criteria in a measurable format. When constructing an Option Evaluation Matrix, it is important to consider factors such as the setting of criteria, the identification of improvement areas and sensitivity ranges, and the assigning of weights (benefit ranking × weight) for relative importance. In practice, setting targets is not usually highlighted as an essential recommended action in constructing an Option Evaluation Matrix. While setting targets may be useful in driving performance, it is not as necessary in constructing a matrix as other listed options such as selecting criteria or defining scales of improvement.

References:

• MoV Handbook, pages: 58, 59.

Rationale: Value Drivers play a crucial role in creating a Value Tree. This is because they help to identify the key functions that drive value in a project or programme. By prioritising Value Drivers in the Value Profile, it is possible to identify the most critical drivers that must be delivered in full to yield a successful outcome. Primary Value Drivers are then linked to statements describing design considerations which are further linked to a statement of SMART objectives which form the trunk of the tree. This creates a clear link between key functions, design considerations and project objectives, which ensures that the right questions are asked before leaping to preconceived solutions and value is maximised.

References:

• MoV Handbook, pages: 18, 19, 49.

Rationale: MoV processes are designed to add value and achieve the required outcomes in a project. Depending on the stage of the project or programme, different techniques and processes will need to be used to maximize the added value from MoV. Therefore, MoV activities change as a project evolves from inception to use so that outputs at each stage of the project's lifecycle support its progress. Some processes will be used at many stages, while others will only be used at specific stages. Using MoV at the earliest stages of the project or programme can ensure effective outcomes for a project and allow for optimization of the approach. Ultimately, the implementation of MoV processes can provide great benefits to organizations, including a greater understanding of others' roles and a common focus, leading to improved organizational learning and increased capacity for change.

References:

• MoV Handbook, page: 27.

Rationale: Moving from the higher-order function to the primary basic function is important because it provides insight into a necessary lower-level function for attaining the overall project objective or customer need. Assigning primary basic functions that support the project goals or customer needs increases the chances of project success and helps identify areas for improvement. It also helps in differentiating between primary basic and primary support or secondary support functions which may not be directly connected with the project objectives or customer needs. The function analysis systems technique can provide insights into the requirements of the customer and can aid in generating better ideas to meet them.

References:

• MoV Handbook, page: 45.

Rationale: The Value Engineering (VE) job plan is a process that systematically analyses a project or process, identifies functions, and relates them to the necessary resources to optimize efficiency while reducing costs. The eight phases of the VE job plan are "Information", "Analysis", "Creative", "Evaluation", "Development", "Presentation", "Implementation", and "Follow-up". Project Framing is not listed among the eight phases of the VE job plan. During Project Framing, the project's goals, objectives, and requirements are defined, a project team is assembled, and stakeholders are identified. The focus of Project Framing is to evaluate the value of the project or product by considering the project's purpose, alignment with business objectives, and potential benefits. Therefore, Project Framing could be considered a prerequisite for the VE job plan.

References:

• MoV Handbook, page: 54.

Rationale: Guiding on how MoV will be used on projects, setting up a strategy for implementing MoV Policy and developing procedures for data capture and feedback are required for a top-down approach to introducing MoV to an organization. Establishing an internal resource skilled in the application of MoV is an essential component of embedding MoV in an organization, but it is not the only requirement for introducing MoV in a top-down approach. There are other critical steps an organization needs to follow, as described in Chapter 7, including introducing an MoV policy, setting up roles and responsibilities, introducing training, monitoring and measuring the benefits, and overcoming barriers to embedding MoV. Only when these steps are implemented, an organization can realize the full value of establishing an internal resource skilled in the application of MoV.

References:

• MoV Handbook, page: 85.

Rationale: Process mapping is an effective technique to understand the operational and business processes that users currently follow, often referred to as "business as usual." This technique provides a visual representation of the steps needed to complete a process and their dependencies. Process mapping helps illuminate the areas where value is created, where waste occurs, inefficiencies, redundancies, and opportunities for improvement. Additionally, it aids in understanding the roles and responsibilities of individuals for each process, identifying the resources required, and measuring the outputs of each process step in terms of the purposes it serves. Once the process map is created, it can be examined to see improvement opportunities, where changes can be made to normalize processes, eliminate redundancy, shorten lead time, and drive efficiency, effectiveness, and value for the business.

References:

• MoV Handbook, page: 56.

Rationale: 1, 4, 3, 2 is the correct sequence of steps when developing an option/idea selection matrix. The first step is to select the criteria. The fourth step is to define the scale of improvement required. The third step is to establish weights for relative importance. Finally, the second step is to apply sensitivity analysis. These steps are important as selection matrices provide a structured approach to scoring and selecting ideas or options. By following the correct sequence of steps, organizations can ensure they are evaluating options using predetermined criteria and with consideration of the importance assigned to each criterion. The evaluation process can then be turned into a quantitative exercise, and the sensitivity analysis step helps to ensure that final options are robust and selected carefully.

References:

• MoV Handbook, page: 60.

Rationale: Since the MoV Study Leader is essentially responsible for ensuring that the MoV process is being implemented correctly within the project, they must maintain regular communication with the Programme Manager. Doing so allows the MoV Study Leader to keep the Programme Manager briefed on any noteworthy activities or findings within the MoV process, including the development of any new risk or opportunity registers, summary reports, or other documentation. This information can be valuable for the Programme Manager in making decisions regarding the project and can be equally as valuable when shared with other projects within the programme. This is because even seemingly small insights or nuggets of information can influence how other projects approach their own MoV process, and can ultimately contribute to a more efficient and effective delivery of value across the entire programme.

References:

• MoV Handbook, pages: 74, 89.