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The aim of this document is to discuss Risk and Value Management, the linkages between them and then apply the theory to the scenario in order to supply a report detailing the best approach to the project and an initial view of risks. This document will p

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Introduction

Project Management Bsc(Hons) Risk & Value Coursework By Joshua Jackson (33239469) Word Count 3,898 Risk & Value Report: Scenario 1 Introduction Risk and value management are processes that are fundamental to the successful delivery of a project. They should be used in every stage of the project lifecycle from concept through to closure. In practice, value management exercises are carried out first, to determine exactly what constitutes value to the business from delivery of the project. A preferred option is identified, together with the risks that are likely to occur if that option was implemented. The project team should repeat the exercises of defining value and associated risks until they arrive at the optimum balance of value and risk.1 The aim of this document is to discuss Risk and Value Management, the linkages between them and then apply the theory to the scenario in order to supply a report detailing the best approach to the project and an initial view of risks. This document will provide both a value and risk management study in order to identify the best approach to the project and an initial view of risks. Value Management Literature Review Value Management was created by Larry Miles and other members of the purchasing team at General Electric (GEC) in 1947 when it was referred to as Value Analysis. The concept was developed in response to the question, "How had companies managed to innovate during World War II?" This question was asked because during the war key materials had been rationed and yet many companies had improved their products and services. However, when the war ended few companies continued to use the innovative processes that helped overcome war time shortages. Miles brief was to understand how they had been so successful. However, he went beyond the brief and presented a model based on the idea that "All cost is for function" and argued that customers in fact buy functions which are experienced through products and services.2 In less than 10 years ...read more.

Middle

Potential Solutions * Rent an existing office in the city centre. * Rent a new office on a business park close to the motorway. * Extend one of the current offices. * Do nothing and keep the two companies working separately under the same group. 4.0 Evaluation Rent city centre office- The city centre office will provide good transport links for employees and customers which give easier access. The city centre also means there will be lots of good services surrounding the office this also means there may be a lot of competition surrounding which could have both a positive and negative effect. The easy access and the good services surrounding may result in less people taking the voluntary redundancies. However, for employees and customers travelling by car it may mean there is no free parking available and there would be a lot of traffic during rush hour. Renting a city centre office will probably be very expensive which would increase costs and lower the company's profits. Rent new office on business park- The business park office provides good transport links for employees and customers who drive cars as it is right by the motorway and the business park will more than likely have free parking. The office is also new therefore it may be a lot more modern and the building will be in a mint condition. The business park may not have that many good services surrounding and therefore may not have that many competitors either. The poor transport links for those that don't have cars and the lack of surrounding services may result in an increase in voluntary redundancies. Extend one of current offices- This would mean that only one of the companies will have to relocate and therefore redundancies may be reduced. However, this method would be quite expensive and very time consuming. Do nothing and keep companies separate- If the company decided to keep the offices separate and have the two companies operating separately under the same group they ...read more.

Conclusion

8 Clearly define the project before implementation. Take the managing directors decision. 9 Ensure strict quality controls are in place. Try and identify and enter new markets. 10 Ensure senior staff are happy, well paid etc. Offer promotions Linkages between Risk and Value Management Thiry (1997)20 suggests that risk and value management go hand in hand and should be used in parallel with each other throughout the project life cycle. This is because when new ways of adding value to the project are thought of, there are new risks associated with them. Therefore, if value and risk management are practiced in parallel with each other the risks associated with adding value can be identified and assessed as to provide some feasibility on the different value solutions. This helps select the best approach as it enables you to compare stakeholder values with the risks involved in meeting those value requirements. In relation to the project context, the proposed move to a new office site carries a lot of risk in relation to the values and functions that it is trying to cater for. By moving the employees to a new office in order to complete the merger and improve efficiency and market share, the company is risking losing a lot of their employees through voluntary redundancies. Also moving the two reasonably sized firms into the same office may cause conflict between the two and create a hostile working environment. There is also a risk of losing their customer base by moving offices as they may move too far away from their original customers or change the company image by merging. The risk and value team therefore recommend that the employees do not move to a single office site as they overall functions of the project and the key stakeholders values can be satisfied by working separately under the same group. Therefore no un-necessary costs will be incurred and the companies can still reap the benefits of the merger through improving the communication between the two offices so that their knowledge and resources can be shared to benefit from economies of scale. ...read more.

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