19 Oct The Best Value Approach and Project Management
*This is a summary and analysis of the following publication. For full references and research details, please see original publication.
Rivera, A., & Kashiwagi, D. (2017). Minimize Project Risk and Costs: A New Approach to Project Management. Journal for the Advancement of Performance Information and Value, 9(2), 49-62.
Available at: http://journal.cibw117.org/index.php/japiv/article/view/29
Project Management Struggles with Performance
Project management (PM) is a fundamental component of delivering services. In 2010, the Project Management Institute identified that 99% of global senior executives identified the importance of the PM method selected to project success. As society has grown, so have the demands of delivering services. PMs are expected to know more and have more experience to survive, making an already difficult job, more difficult. Based on the latest industry performance reports, project managers have been struggling to keep up with the current demands and responsibilities—only 25% of projects are completed on time. There is a long list of possible causes such as complexity, unclear roles, and poor planning but no clear-cut answer has been found.
The Three Silos of a Service
In most organizations, there are three different silos for delivering services: operational, procurement and project management. The first identifies a service required such as construction or IT services, the second selects a vendor to perform the service, and the third manages the vendor. Difficulty and complexity arise because the three groups do not understand what is being done in the other silos.
The silos are all created and sustained as each group attempts to prove their professionalism and value. As a result, each group has their own standards, degrees, certifications and methods, these groups include: the National Institute of Government Purchasers (NIGP), Institute of Supply Change Management (ISM), Project Management Institute (PMI), International Project Management Association (IPMA) and the International Facilities Management Association (IFMA). However, even with the education and certification of more professionals, the delivery of projects in all three silos have continued to suffer poor performance in their service delivery.
The BVA: A Cross Functional Method to Deliver Services
A new Project Management (PM) model is being proposed, which was devised from the Best Value Approach (BVA). The Best Value Approach is one of the few methods with documented results of improved performance on projects. It was developed by Dr. Dean Kashiwagi when he was a professor and researcher at Arizona State University (ASU). BVA is now the most licensed delivery method out of ASU. The BVA PM model has shown to deliver services in all types of industries on time and on budget with a 98% customer satisfaction rate. Some of the largest projects documented to use the BVA are:
- $100M City of Peoria Wastewater Treatment DB project (2007)\
- $53M Olympic Village/University of Utah Housing Project (2001);
- $1B Infrastructure project in Netherlands (2009).
BVA has also worked on managing multiple projects being tested with the US Army Medical Command on over 619 projects valued over $1B and the University of Minnesota on 355 construction projects valued at $322M.
Traditional PM Model vs. BVA PM Model
Rivera et al. identified and compared 19 Project Management (PM) models to the BVA PM Model and identified three major characteristics and the practices that distinguish the two.
1. Management vs. Leadership
Traditional models have the PM telling the expert vendors what to do this includes
- Determining the scope, cost and schedule of the service
- Selecting the vendor, they think is qualified
- Directing the hired vendor on how to execute the service and
- Directing the hired vendor when something is perceived as not correct or when there is a problem
The BVA is a new paradigm shift for PMs to recognize they are not the experts. The experts are those who are performing the service (vendors). The BVA model has the PM identify and utilize the expertise of the vendors selected to deliver the service which includes
- Use a selection system which identifies vendors which have expertise and understand the project, supported by similar project performance
- Require the expert vendor to determine the scope, cost and schedule for the service
- Require the expert vendor to identify and carry out the service and what to do if problems occur
2. Technical Communication vs Non-Technical Communication
Traditional models use technical communication which requires the PM to know all the technical details of a project, discuss the technical details and plans with the expert vendor and make the technical decisions on the project. In contrast, the BVA model uses non-technical communication which does not require the PM to have any previous education or knowledge in the service area being delivered. The BVA PM requires the expert to know and plan all the technical details of the project and then submit a weekly project report that identifies the performance and progress in simple language. The expert vendor is now responsible to make all technical decisions and justify each decision to the PM with a simple explanation.
3.Quality Control vs Quality Assurance
Traditional models require the PM to inspect and verify the quality of the expert vendors’ work. The PM would be responsible to inspect and explain to the expert vendor if something is not acceptable or does not meet the technical standard. The BVA model has the PM ensure the expert vendor has a quality control plan that is verifiable through simple metrics.
Case Study: State Agency Applies the BVA PM Model
The BVA PM was recently tested at one of the top 18 largest state’s environmental agency in 2015. The State Agency implemented the BVA PM approach in their largest department, the Water Quality Department (WQD). This department is responsible for identifying, assessing, and cleaning up sites contaminated with hazardous substances. The WQD has 7 project managers which are used to oversee, manage, and inspect the vendors work. The WQD was having problems with vendor performance including quality, inadequate performance metrics, incomplete projects, and a high level of PM required from the client.
After implementing BVA PM model the WQD completed 60 projects with a total value of $5.6M. The results were groundbreaking as the WQD increased the amount of work completed from 50% to 99% in 33% less time. The level of quality increased 22% higher than last year with less PMs from the WQD, only requiring 5 PMs instead of 7. In retrospect the State Agency after using various PM models identified that the BVA PM model was the only option proven to transform its agency from an environment of management, direction, and control to alignment, win-win, transparency and leadership.
“A key element in the quest to accelerate cleanups was a new procurement process utilized by State Agency in FY15 called Best Value. The Best Value Procurement methodology was developed by Dr. Dean Kashiwagi of the Performance Based Studies Research Group at Arizona State University. The Best Value methodology allowed State Agency to utilize the technical capabilities of both internal and external experts in investigation and remediation to collaboratively become more proficient in achieving desired remediation strategies through measurement, accountability and transparency.”
(see https://static.azdeq.gov/wqarf/2015wqarf_annualreport.pdf, pg. 11)
The Best Value Approach Project Management Model (BVA PM) helps organizations eliminate the silos of service delivery which causes complexity and low performance, by bringing in the PM to lead the project from creation to completion. The PM replaces the traditional practices of delivering services (management, technical communication, quality control) with the implementation of the new BVA PM practices (leadership, non-technical communication and quality assurance). The BVA PM’s major contribution to minimizing cost and risk and increasing performance is through the replacement of the PMs’ expertise with the identification and utilization of an expert vendor’s expertise. The researchers propose that the BVA PM is the PM model of the future to support PMs with the delivery of services. For more information, see the referenced journal publication.
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