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are reviewed. Finally, the paper proposes a value management service sector project
model for the public sector which was produced as a result of the research findings.
* Federal Acquisition Regulation (FAR), Subchapter A General Part 2 Definition of
Words and Terms, 2.101.
**Office of the Deputy Prime Minister (responsible for Local Authorities in England)
Keywords: Best Value, value management, public service sector
INTRODUCTION TO THE RESEARCH PROJECT
The primary aim of this doctoral research was to determine if VM can be successfully
applied to the public service sector to support Best Value and therefore exploiting new
ground for implementation. The focus was on the service sector because VM has already
been proven as a successful value-adding method for the manufacturing and construction
industries. The reasoning for the public sector focus was due to the introduction of Best
Value in Scottish local government which became a statutory duty in 2003 during the
course of the doctoral research. This presented a timely opportunity considering that VM
and Best Value have the same policy; to achieve maximum value for the customer or
client, and therefore the use of VM could be demonstrated and tested for its support in
achieving Best Value.
The literature review examined three key areas which were of fundamental importance to
understanding the relationship between Best Value, value management and projects. A
robust methodology comprising three key research methods was constructed to answer
the research proposition; Value management is a service which can maximise the value
of government services to achieve Best Value. The synthesis of the literature explored
the corroboration between Best Value, VM and projects and deduced the following; (1)
VM is a project focussed services that relies on interventions or value opportunities
within the project life cycle, (2) a local authority will instigate projects to ensure
continuous improvement to satisfy Best Value, and (3) VM and Best Value have the same
objectives, to achieve maximum value for the customer or client.
The research methodology proposed was; (1) a grounded theory study on VM case
studies exploring project issues, (2) a questionnaire study on local authority projects
targeted at all Scottish local authorities, (3) an action research study in a VM workshop
on a local authority project, and (4) a combined desk study and case study research which
was part of a funded research project exploring the use of VM in a Best Value project to
propose a methodology for the application of VM within a Best Value arena.
The purpose of these chosen research methods were; (1) to identify if there was
commonality of project issues (project issues that were generic), (2) to explore local
authority understanding of projects and identify the key points in the project life cycle
where VM could be applied, (3) to confirm that VM could be successfully used in a local
2
authority project and to validate and test the generic issues identified in the grounded
theory study, and (4) to derive a logical project framework that applies VM to support
continuous improvement to achieve Best Value.
The outputs of the research are; (1) a predictive framework of project issues which can be
used in any VM workshop regardless of project type, (2) a local authority generic project
model; The Three-Stage Project Model, and (3) a logical project framework that uses a
VM approach to achieve Best Value which indicates the VM opportunity points; the
application points in the project life cycle when VM should be applied.
THE RESEARCH FINDINGS
This section reports on the primary findings from the four-part research investigation. A
viable case has been made to the extent that the research proposition; Value management
is a service which can maximise the value of government services to achieve Best Value
can be justifiably confirmed through the detailed methodology that has been applied.
Findings from the Scottish Local Authority Questionnaire Survey
The questionnaire results were representative of thirty-one (31) local authorities out of a
total possible thirty-two (32) giving a response rate of 97%. The questionnaire was sent to
forty-eight (48) local authority members from roles such as policy officers, service
improvement managers, performance operations managers, strategic planning managers,
and Best Value managers. Thirty-three (33) responses were received in total giving an
overall questionnaire response rate of 69%. The questionnaire explored four areas; (1)
Projects, (2) Project Management Tools, (3) Best Value, (4) Best Practice and
Benchmarking.
It was discovered that there is a varied approach to how local authorities procure and
manage their projects. This was confirmed by the following statements from two local
authorities who chose to opt out of completing the questionnaire and was also reflected in
some of the other local authority responses where respondents highlighted that there is
diversity, the approach varies and there is not a consistent approach.
We are a large and diverse authority we have a range of approaches to project
management it would not be possible to give you some of the definitive yes /no
responses as they would not accurately reflect the range of practice and approaches.
We have a distributed management structure and no corporate approach our
authority is so diverse and there is no common approach. I cannot complete the
questionnaire from a corporate or a departmental service level as the responses would
have to be both yes and no.
Respondents were asked how they would define a project to identify their level of
understanding in relation to projects as Best Value is applied across projects and VM is a
project focused service. Only 53% of respondents gave an appropriate definition of a
project by using words such as; resources, timescale, objectives and budget which
suggests a lack of understanding of the components of a project amongst the other 47%.
This could be as a result of only 43% being found to have a standardised project
management approach.
Local authorities were asked to indicate what statement best described project work in
their authority. 46% of local authorities felt that they had a well thought out plan to
project work compared to 54% who indicated that an ad-hoc approach is taken. VM is a
project focussed management technique that may be used in public service sector projects
and will particularly be of benefit to those projects requiring guidance and direction.
The questionnaire study confirmed the use of tools and techniques currently used in the
Three Wheels Framework (a proposition of the research providing a logical project
framework); Investors in People (81%), ISO 9000 (77%), EFQM (71%), Charter Mark
(55%), Balanced Scorecard (52%), and Six Sigma (6%). It also identified other methods
to promote a practice of continuous improvement and better project practice such as;
consultation / stakeholder analysis, process mapping / gap analysis, scorecards,
performance management, and in-house guidance for conducting strategic and
management reviews. 74% of local authorities agreed that quality tools assist in Best
Value Reviews and almost a third (30%) specifically mentioned that the tools support
reviews in highlighting gaps / areas / issues to be addressed.
An initial review on projects highlighted a number of generic project stages that were
structured into a generic project model; The Three-Stage Project Model. The three
stages can be described in broad terms as; the Pre-Project stage which is primarily
discussion and paper based involves users and planners (Nicholas, 2001) and concludes
with the termination of the pre-project stage when full budgetary approval is given. This
signifies the point when the initial concept becomes an identifiable project known as
project initiation (Woodhead, 2000). The Project stage where a practical start is
identifiable involves designers and builders (Nicholas, 2001). Finally, the Post-Project
stage where the project is absorbed into the organisations core business involves users
and operators (Nicholas, 2001).
Respondents were asked what project stages in The Three-Stage Project Model they
were familiar with, what stages need more time spent in their particular department and
which project stages involve most problems. This informed the VM opportunity points
in The Three-Stage Project Model shown in Figure 1. Four VM opportunity points were
identified. Two were located in the pre-project stage, however both of these stages; select
project alternatives and feasibility, can be addressed in one VM study. The reason this
was chosen as a VM opportunity point is that these stages were both identified as being
least familiar, as stages where most problems exist and where more time requires spent.
VM opportunity point two in the project stage was selected to address the requirement for
more time in the tactical design of the project. The four stages in the post-project stage all
required either a better degree of understanding to ensure successful absorption into local
authority core business, were where most problems existed and were identified as stages
where more time needed spent. Therefore, two VM opportunity points have been located
here to ensure the successful absorption of the project into local authority core business.
Project Conception
Pre-Brief
Pre-feasibility / Feasibility
Briefing
Detail Concept
Design Design
Project
Site
Ops.
Monitoring of Project
Operation
Use
Post-Project
CORE BUSINESS
Pre-Project
Establish Rationale
Evaluation
Feedback
Figure 1 The Three-Stage Project Model Adapted for the Public Service Sector
When considering the use of VM, local authorities may want to use this model to identify
what stages of the project under consideration would value a VM approach. However, in
terms of VM, local authorities need educated on the benefits of using such an approach as
currently, less than a third (28%) of local authorities have used VM which is unlikely to
be a collective local authority approach. However, this suggests that there is some
knowledge of the benefits of VM within local authorities but more would need to be done
to ensure an adequate understanding on how VM may be used to support Best Value.
Almost all (93%) local authorities considered a Best Value Review to be a project. VM is
project focused and therefore can be used in a Best Value Review. Local authorities were
asked to select from four options the statement that best describes the resulting action
plan from a Best Value Review to reveal how effective the current situation is with
regards to reviews and to determine if the VM approach is a suitable option for a Best
Value Review. A breakdown is given; (1) A simple straight forward plan which is
implemented to improve the service (25%), (2) Very supportive in outlining what
improvement actions have to be taken, the people to implement and the timescales for
completion (46%), (3) Moderately supportive by providing some information that
outlines plans for improvement (25%), (4) Not supportive in taking action to improve the
service (4%). Almost half of local authorities believed that their Best Value action plan is
very supportive.
Most local authorities have a planning system in place for implementing action plans.
However, only 46% of local authorities described the resulting action plan from a Best
Value Review as very supportive in outlining what improvement actions have to be
taken, the people to implement and the timescales for completion. Two local authorities
5
stated that action plans were implemented badly and that it was hard work. The output
of any VM study is an action plan, listing activities, timescales and people to implement.
VM is a logical, systematic approach which will address these issues identified.
Findings from the Grounded Theory Study
The objective of this part of the research was to develop a theory using grounded theory
to confirm whether similar issues appear at similar project stages and if these were
generic in nature. The research commenced with a review of one-hundred case studies;
VM workshop reports. Involvement in twenty-five live workshops also gave an insight
into the various applications of the VM methodology.
The Common Issues across Project Stages
The Three-Stage Project Model was used as a sorting tool to categorise the VM case
studies. The focus in these case studies was the project issues. Grounded theory was used
to generate a theory that may be applied to benefit future project work when
implementing VM. The research accessed one-hundred case studies of which fifty
contained an issues analysis. It is believed that the data available in the case studies was
sufficiently rich to generate theory.
The research involved exploring commonality of project issues in their project stages,
however, it was also discovered that commonality of issues existed across project stages.
This may be as a result of issues not being resolved at earlier stages in the project life
cycle or issues being prevalent throughout the life of the project. An example of this is;
cost certainty / limits being present at the formal planning stage and tactical design
stage of the project. Another example is clients aspirations / perception being a common
issue at both the implementation, project execution stage and tactical design.
The majority of issues were discovered to be generic in nature and therefore could apply
to any project. The high degree of commonality of issues across the project stages
suggests that these are issues in most projects and should therefore be explored during the
value management study in an effort to address project understanding and find solutions.
The Predictive Framework
The predictive framework for project issues is shown in Figure 2 which incorporates all
the generic project issues under their categories.
Start / lead-in
Completion
Dangers with regard to time
Repercussions / inadequate time
Programme / planning / approvals
Timescales
Organisation
Communications
Information / feedback
Involvement
Communications
Liaison
Community relationships
Identify stakeholders
Client feedback / aspirations
Clients perception
Opportunities / benefits
Employment opportunities
Disruption
Hours of opening
Working hours
Quality Control
Communications
Meetings and updates
Design
Risk register profile / recording
Supply Chain
Innovation
Standards / regulations
Planning
Interfaces
A correlation existed between the issues from the predictive framework and the issues
identified from the action research study and two case studies. The action research study
confirmed the reliability of the predictive framework and confirmed its use to support the
identification of project issues.
The Response to VM in the Action Research Workshop and Case Studies
The successful use of VM was determined by asking the workshop commissioner (local
authority champion) to comment following the distribution of the workshop report for the
project. Comment had also been made following the two case studies which had been
pre-recorded:
Action Research Study: I found it a very useful exercise and we have already
implemented some of the actions. And, on behalf of the team; We found the exercise
extremely useful and have managed to reduce our costs considerably.
Case Study 1: The Councils value for money head for the Childrens Services Review,
saw Value Managements benefits in terms of its speed, the variety of issues and ideas
explored, enthusiasm and ownership, project clarity and the substantial prospects of
beneficial change (Garfitt and Sutcliffe, 2003).
Case Study 2: I learnt a lot from the two days, and in hindsight, wished that you (VM
facilitator) were 'on board' from the project concept/brief stage.
These comments are very supportive of the VM methodology in local government
projects and highlight its usefulness, speed, appreciation of application in the early
project stages and the outcome of a VM study; action planning, exploration of a variety
of issues and ideas, and a reduction of costs.
From the research conducted using these three research methods; questionnaire survey,
grounded theory and action research, it is evident that the research proposition can be
confirmed; Value management is a service which can maximise the value of government
services to achieve Best Value. The next section summarises these findings in addition
to other supporting factors making the case for the application of VM in the public
service sector.
THE TEN SUPPORTING FACTORS OF APPLYING VM IN THE PUBLIC
SERVICE SECTOR
Ten specific elements of research ranging from analysis of the literature and the impact of
government legislation to desk studies and action research on VM in the public service
sector have been identified. These are; (1) Government Best Value legislation which has
the same principles as VM, (2) the versatile applications of VM highlighting its use in the
public service sector, (3) the tale from the literature which suggests further scope for VM
application, (4) the proposed framework: The Three Wheels of Best Value which
provides a logical framework incorporating a VM approach, (5) the identification of
generic project issues identified in VM case studies suggesting the methodology can be
used regardless of project type or sector, (6) Government application of VM highlighting
its success, (7) exploration of public service functions using the VM methodology, (8)
8
benefits of VM specific to the public service sector, (9) case study: a VM approach in
service provision resulting in a positive outcome, and (10) post workshop interviews on
the use of VM demonstrating its success.
Government Best Value Legislation
The limited application of VM to public service projects has presented an opportunity for
further exploration at an opportune time in parallel with the Scottish Best Value
legislation. Value management and Best Value have similar objectives; to promote
continuous improvement and achieve the maximum value for the customer or client
(DETR, 2000). Bone and Law (2000) outline that the Best Value policy is; a broadlybased value management policy. Value management has been using the term Best
Value since its inception and therefore is familiar with the meaning of Best Value (Bone
and Robertson, 2003).
The Best Value literature, in particular the Scottish Local Government Act 2003 states
that local authorities must make arrangements to secure Best Value. There is a duty to
ensure that there is continuous improvement in the performance of the organisations
functions and in securing Best Value, maintaining an appropriate balance among cost and
quality and having regard to economy, efficiency, effectiveness, and equal opportunities
requirements. The Act is not prescriptive and does not outline how local authorities
should go about meeting the requirements of Best Value. In a study conducted by
Wisniewski and Stewart (2001) it was discovered that councils would appreciate
guidance on what is expected from a Best Value service. Hughes and McLaughlin (2001)
state that; There is an increasing variety of means by which effective services can be
provided and a variety of tools to use in assessing them and that any decision making
tool provides support to the process. Value management enhances decision making and
could be used as a tool to meet the requirements of the Act to achieve Best Value.
The Versatile Applications of VM
Bone and Robertson (2003) describe VM as; A multi-faceted discipline that can be
applied to any aspect of public service where improved performance is needed or
desired.
There are varied VM applications across the construction industry that exemplify the
versatility of VM. Implementation has been in life cycle costing terms to ensure
maximum value across the life cycle of the built facility, in sustainability to confirm that
sustainable issues are addressed, and in procurement to ensure selection of the best
procurement route available. VM is also used to improve particular aspects of the project
such as; operations and communications amongst the project team, partnering
relationships, the development of bid proposals, to aid the briefing process in client
organisations, and the exploration of scope for business development. This range of
applications highlights the diversity of the VM methodology. It should be noted that the
types of application outlined are not all specific to the construction industry and could be
initiated elsewhere.
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PROJECT
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11
It is evident that if the same tools and techniques associated with VM are being used to
extrapolate, analyse and evaluate the issues and these issues are similar regardless of
project type then VM may be successfully applied anywhere there is a project whether in
construction or in the service sector.
Government Application of VM
A literature review on the application of VM in the public service sector highlighted that
VM is not a common application. Its consistency in use within the public sector varies as
well as there being lack of knowledge of the results it can produce.
A publication by Bone (1993) was initiated to introduce what Bone describes as a
missing element in the public sector, which might be filled by VM. It is stated that the
public sector will gain through reduced public spending and that the adoption of this
method provides an opportunity and exemplifies the importance of public sector
management awareness on what methods are available to increase the value of public
services. A case for VM is made by Bone (1993) who describes it as an another tool for
managers; an extremely powerful tool, arguably one of the most effective management
methods, and one that has stood the test of time in many countries around the world since
the 1950s. A case study is outlined by Bone which involves a building maintenance
project in London that uses VM to increase public sector value. The workshop resulted in
the production of 50 ideas which resulted in 400,000 potential savings. Bone states that
the VM process facilitated; a more structured, creative and systematic way than they had
been used to. Other public sector authorities that have implemented VM have used it for
services such as hospital services which includes catering, cleaning, grounds
maintenance, portering and linen, and engineering services.
An example of benefits gained from the VM approach are a high degree of client
satisfaction, improved functionality and cost savings ranging from 5-15% from studies
conducted in Hong Kong (Fong, 1999). Barton and Pretorius (2003) outline the
importance of integrating the stakeholder values into the value management of public
sector projects in Hong Kong to allow for successful participation. Value in local
authorities is a complex area, exemplified by Walsh (1991) who states that; It is not one
of meeting service specifications, but of dealing with the shifting value structure of
society. Public sector projects involve different stakeholder groups all with different
values which have to be captured to allow for effective decision making. Barton and
Pretorius outline that there will be multiple perceptions on what is useful, beneficial and
important when considering public sector projects. It is suggested that capturing
stakeholder values and using these to inform the decision making process is a difficult but
necessary challenge that VM is capable of meeting to ensure the success of the project.
Exploration of Public Service Functions
The importance of project function is highlighted by Maddock (2002) who outlines a
prime example of a project failing to meet the needs of the customers. Local people were
consulted on what they wanted in their neighbourhood and elected for cleaner streets but
instead got something completely different. This kind of government failure causes
frustration and confusion on the reasons they were consulted in the first instance. The
12
VM methodology ensures projects deliver what the customer wants by using various
tools and techniques to bring out the project objectives. In particular, a tool called the
Clients Value System is used to understand the levels of importance of the clients values
pertaining to the project to ensure that the project team can understand and deliver a
service or built facility that satisfies the projects objectives (Kelly et al., 2004).
The literature review discovered a number of strategic functions of a public service which
have been listed and sorted under the headers of strategic needs which are the necessary
functions of a public service to ensure it is successful, and the strategic wants which are
classed as the nice to haves (Table 1).
Table 1 Strategic Needs and Wants of a Public Service
Strategic Needs
Satisfy service needs
Satisfy a broad social need
Ensure the well-being of society
Maximise citizens utility
Achieve customer satisfaction
Improve core services
Strategic Wants
Fill a service gap
Respond to private sector failure
Satisfy public preferences
Meet best interests of general public
Ensure equality
Promote differentiation
Satisfy individual needs and desires
13
Best Value
Terminology /
Keyword(s)
KPIs
Values
Continuous
Improvement
Stakeholder
Representation
Options
Action Plan
Ownership
PMP
BVPP
Logical Route
Audit Trail
Knowledge
Sharing
14
There is a problem for a lot of people to have a whole day workshop. I think its worth it.
The use of a facilitator brings together a vast range of ideas from which we can select the best way of going about
the project.
A Benchmark
The workshops provided guidelines for progressing projects.
We will use as a templatemore knowledge and experience has been gained.
This will be used as a past example to be brought forward when it is relevant.
Because of the first one I have been involved in, I will use it to benchmark.
I will use it as a reference.
I will take points from the reports that were beneficial and I will use these in other projects.
I will use as a way of explaining to clients how this project worked if it is successful it will be used as a
reference and as background material.
Successful Structure
There was an organised structure to the way this project has been dealt with, whereas others have not been as
organised and things get forgotten about.
A successful format.
The techniques are so logical and work well; I can see the practicality of it. I like VM because its so clear and
logical with clear answers, it doesnt involve a lot of theory and people can see whats happening.
Predictive Issues
Framework
Value
Management
Projects
Three Stage
Project Model
Best Value
VM studies to assist the team in extrapolating the likely issues at the particular project
stage and for use by the facilitator in leading the project team.
(2) The Service Sector Three-Stage Project Model The research behind the ThreeStage Project Model explored familiarity with project stages, identified what stages
problems existed, and the project stages where more time was required which resulted in
a revised service model which included four VM opportunity points (Figure 1). When
considering a VM study, local authorities can use this model to identify the best stages in
the project to apply VM. Local authorities may also use the model when involved in
project work to review the stages involved in a generic project.
(3) The Three Wheels of Best Value This research concluded that a process entitled
the Three Wheels of Best Value (Figure 3) is a logical framework that may be applied
in local government to permit a practice of continuous improvement and to provide a
system that may be adopted as the foundation for the measurement of Best Value. The
framework goes beyond performance indicators by providing an audit trail for review and
a clear analysis of the methods used to obtain value for money in service provision.
Wheel three of the framework using a VM approach allows the project task team to
evaluate all the possible options of service procurement ensuring that the Best Value
option for service procurement is chosen.
SUMMARY AND CONCLUSIONS
Ten supporting factors have been identified in the research and present a well founded
case for the application of VM in local government to support Best Value. The ten areas
and their supporting capabilities are:
1.
The Best Value legislation has the same goal as VM; to achieve the maximum value
for the customer or client and therefore, VM can be used as a local government tool
to ensure this is achieved.
2.
VM is a versatile management tool which is evident in its application to different
types of project in the construction industry. These types of application are also
familiar with the public sector, such as; partnering relationships and business
development, highlighting that the VM methodology can be used across a range of
projects regardless of sector.
3.
The literature draws a strong correlation between the purpose of VM and Best
Value and it is evident that VM is an excellent public sector tool to plug the gaps in
Best Value service provision identified in the literature which include option
appraisal, stakeholder representation and action planning.
4.
The framework; The Three Wheels of Best Value developed for local authorities
to comply with the Best Value initiative suggests the successful inclusion of VM
alongside tools that would typically be used in a Best Value Review to lead the
local authority to a number of service options to be evaluated to achieve Best Value.
5.
Commonality of project issues discovered from the VM case studies identified in a
grounded theory study were discovered to be generic and therefore, applicable to
any type of project. This proves that the VM methodology can be used to address
these issues regardless of project background. A project framework; The Three16
6.
7.
8.
9.
10.
Stage Project Model outlining the VM application points in the project life cycle
has been developed as a result of the questionnaire findings to support local
government in the management of their projects.
The application of VM in government has resulted in benefits such as; client
satisfaction, improved functionality, cost savings and integrating stakeholder values
which coincides with Best Value and illustrates how Best Value can be achieved
through use of VM.
The exploration of public sector function can be achieved using the VM function
focused methodology to ensure that the purpose of the project is thoroughly
explored to meet the requirements of the customer.
The VM benefits specific to public sector service provision such as the development
of KPIs, the exploration of public sector values and the development of
performance plans have been identified from the review of literature.
In terms of practical research outside the scope of the literature, a case study using
VM for a public sector service resulted in a positive response obtained from
comments made by the project participants in local government. This case study
demonstrates that the application of VM was successful and a positive outcome
could be the case in other local government projects.
Post workshop interviews in a construction focused study also highlighted a
positive perception of the VM methodology and what aspects of the VM process
were most helpful.
The three streams of research in Best Value, value management, and projects have shown
that VM can be successfully applied in local government. Action research has confirmed
this although it should be ensured that the review of Best Value in a particular service
area is properly structured as a project for VM to be successful. The Three Wheels
Framework includes a VM approach and tools and techniques already used in local
authorities to achieve Best Value, and The Service Sector Three-Stage Project Model is
a generic model where VM opportunities for a service have been highlighted to improve
project practice within local authorities. The use of grounded theory has derived a theory
from the issues which identified that similar issues regardless of project type re-occur and
therefore the same tools and techniques associated with VM may be applied. The
questionnaire has confirmed the research work in terms of the tools and techniques used
in wheels two and three of the Three Wheels framework and the project stages
identified in the Three-Stage Project Model. The action research study and case studies
highlighted that VM can be successfully applied to a local government project and the
desk study research on a local authority service project explored the practical use of such
a framework and confirmed its successful use.
Overall, the research has contributed three research outputs to the field of knowledge and
has answered the research proposition by concluding that VM is a management tool of
great value in local governments quest to achieve Best Value.
Value management is in its early stages of conception in local government and it is hoped
that this work will highlight the opportunities of using VM and prescribe a logical
framework which can be adopted for compliance with the statutory duty of Best Value.
17
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