Default to value engineering in tough economic climate
Value management or value engineering has become standard practice worldwide, in both public and private sector developments – and for good reason. In an increasingly competitive business environment coupled with difficult economic circumstances, projects and developments need to be carefully thought through from inception if they are to be feasible in the first instance, and deliver the required return on investment in the second.
Betts & Townsend, a construction project management firm with a 25-year track record, has extensive experience in value management and in helping to deliver both savings and returns for its clients. “The objective is not just to reduce costs. We carry out a detailed value engineering exercise on every project to look at how each activity adds value to the ultimate cost,” says Howard Betts, founder and MD of Betts & Townsend.
Etienne Hairbottle, project manager at Betts & Townsend, explains: “Value management is, to a great extent, the orderly application of financial design criteria principles by a multi-disciplinary team of experts – the design and build team – together with a sound understanding of the impact of rapidly developing technology.” The process of extracting maximum value from a project can fall under three broad headings: building cost efficiency, specification alternatives and design efficiency.
Building cost efficiency includes considering different structural solutions along with secondary factors such as mechanical and electrical services, plumbing, suspended ceilings, vertical elements and even paint. Specification alternatives need to take into account the capital and life-cycle costs of various building elements, and the way in which each individual element contributes to the efficient functioning of the whole building. Design efficiency needs to balance practical with aesthetic considerations, along with buildability.
Overall, it is a complex process in which the best benefit is ultimately derived from involving as many members of the design and construction team as possible, from early on. “Where practical, it is useful to ask the trades for their input. Benefits can often be derived from simple and practical things – for example, rethinking a column design slightly to suit the size column boxes that a contractor already has available, rather than making new column boxes to suit the designed size,” says Howard. It’s a simple example, but it shows that by making minor changes at the design stage, significant costs savings can be achieved in the final budget.
One of Betts & Townsend’s key strengths is the fact that its founders and project management staff all have strong construction backgrounds, which gives them a solid understanding of processes on site. This insight gives them the ability to anticipate possible problems before they occur, and to suggest better alternatives even during the construction process.
Value management on a project requires not just a carefully managed approach, but an agile one as well. Unexpected challenges can arise on any project, and it is then up to the professional team to come up with innovative solutions in order to adhere to budgets and timelines. “We believe that it is part of our job to think outside the box, catch problems before they appear and be proactive about engaging everyone including the client, if necessary, to find ways to improve feasibility and enrich the life cycle of a project,” says Etienne.
Howard emphasises that Betts & Townsend’s approach is not arm’s-length project management. “We expect our project managers to be an integral part of the team, to understand every detail of the project and to assist the contractor on site. We have received compliments from clients in the past about our pro-active approach and focus on adding value and we believe this is something that sets us apart.”