Value Study On Identify Business Needs Construction Essay

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Urban Redevelopment Authority is planning a new-build local government administrative headquarters in the city centre for the city authorities such as: URA, HDB (Housing Development Board), MOM (Ministry of Manpower), NEA (National Environmental Authority), LTA (Land Transport Authority).

2.0 Project Criteria

Although the project is at an early stage of development due to the possible site and design briefing to be provided, URA expects the proposed new headquarters to achieve the following requirements:

Centralisation of all public sector departments to one location.

Modern and efficient administration of government services.

High specification modern building

Benefits a progressive and visionary city.

Improvement of organizational value chain.

3.0 Project Constrains

To develop this project, there are some constraints to be considered as identified following:

The project has a budget of £25M.

An initial estimate land around 12500m2.

The lack of building experience to client.

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Specific facilities have not been identified.

Duration of design and construction has not been identified.

4.0 Objective of the Studies

The client has adopted OGC 3 project procurement lifecycle as the procurement framework for the project. Both value and risk management studies have to integrate in the process of the project. The value management study on the identify business needs and the 2nd value and risk study on the options to meet business need and confirm project still required.

4.1 Value Study on Identify Business Needs

To identify the business needs and stakeholder needs in both short and long term,

To assess and evaluate the project criteria and advise whether the project is feasible to support the business needs.

To maximize value for money to achieve and minimize risk of loss and unnecessary expense.

4.2 Value & Risk Study on Options to meet business needs & Confirm project still required

To investigate in more detail and evaluate options to meet business needs.

To identify risks with each option and updating of risk register.

To identify, analyze and respond to the uncertainties and risks.

5.0 Value Study on Identify Business Needs

The value management study for this stage is very important and must be carried out in time due to it shall be tied closely with the critical path of the project development. The development of traditional job plan will conduct through the study with follow the logical, sequential and analysis of value. The duration of this study is target to be carried out within one day.

5.1 Pre-workshop activities

Prior to the value management study on identify business needs, it is required to appoint the value management facilitator to organize, lead and control the attendees throughout the study meeting. The VM facilitator will conduct an initial coordination with all individual members to collect all necessary information. This information will help the VM facilitator to prepare the agenda for the workshop. The key activities for collect the information as following:-

Individual communication with key stakeholders

Visit to stakeholders' existing office/building

Research on city centre's condition, surrounding facilities & environment

5.2 Strategic stage study

The committee members are carefully selected from key stakeholders based on their work function. All the members will feedback on their individual stakeholder needs both in short and long term for incorporate into the study. The team members (attendees) and their responsibilities are tabulated as following:-

Position

Responsibility

Senior Director

Senior Responsible Owner of the client, the authorized final decision maker, who resolves issues between stakeholders and proposed project team.

Project Sponsor (PS)

The competent employee or appoint external party, responsible to coordinate and overall in charge of project from inception to completion

URA Officer

URA's Representative, responsible for advise the city development concept for fully consider the function of building services

HDB Officer

HDB's Representative, responsible for provide information on floor area, staff requirement, hardware & software needs.

MOM Officer

MOM's Representative, responsible for provide information on floor area, staff requirement, hardware and software need.

NEA Officer

NEA's Representative,

Responsible for provide information on floor area, staff requirement, hardware and software need.

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To advise the environmental needs and requirement.

LTA Officer

MOM's Representative,

Responsible for provide information on floor area, staff requirement, hardware and software need.

To advise on traffic control and implement.

Finance Manager

Responsible for advice on project financial status and budgetary control.

Purchase Manager

Responsible for resources control and purchase.

VM Facilitator

Responsible for create the study strategic

Responsible for organize, lead and control the study meeting and outline the report to Senior Director

Table 1: Team Members and Responsibilities

The value management workshop is suggested to be placed at URA's existing Conference Room. All the above mentioned team members are required to attend the study and the agenda of the study as listed below:-

TIME

ACTIVITY

Information

9:00am - 9:15am

Introduction meeting between all team members

9:15am - 9:45am

Group tour to existing workshop

9:45am - 10:30am

PS to present the project objective, issues and constraints

10:30am - 10:45am

Tea Break

Creativity

10:45am - 11:30pm

Review the information of all stakeholders needs

11:30am - 12:00pm

Arrangement of priorities

12:00pm - 1:00pm

Lunch Break

Evaluation

1:00pm - 2:30pm

Analysis and evaluate on the ideas and project needs

Development

2:30pm - 3:30pm

Develop value system and identify project requirement

3:30pm - 3:45pm

Tea Break

3:45pm - 4:30pm

Value management and project overview

Presentation

4:30pm - 5:00pm

Presentation

5:00pm

End of workshop

Table 2: Agenda for Value Management Pre-Workshop Meeting

According to the identified attendees and fixed agenda, the important issue during the study is to identify the stakeholders' necessary requirements and value systems as summarized below that will influence the decision making by the Senior Director.

Business Needs

The new government administrative headquarter is to centralize all public sector departments for the purposes of modern and efficient administration of government services. It is a high specification modern building to befit the progressive and visionary city.

Location

The initial selected location has to be carefully studied due to the dependence of public services. It is also to consider the further upgrading and developing requirement.

Organization

All stakeholders' potential and influence are studied for identify the client's hierarchical organization structure.

Community

The necessary research is to carry out for evaluate the condition of local community requirements. The selected location is important to ensure the high quality of services to public, no environmental issues and traffic congestion will be caused.

Finance

To avoid the cost constraint for an incomplete project, there is required to look for the extra resource of funding, best control for allocated funding and close monitoring of the project cash flow.

Time

The project duration is requested to discuss due to the procurement procedure and construction cost will be monitored accordingly.

Environmental & Sustainability

The environmental issue is required to be addressed. The sustainability is to adopt in this project such as: PV solar panel to generate the energy, green wall and roof garden to reduce the subsidising of energy.

Life cycle cost

The sustainability adoption and quality of the project will affect the life cycle cost. The building design and material selection is also important to be considered accordingly.

5.3 Creativity and Evaluation

In order to address the above issues, all the stakeholders' requirements are able to bring out during the study, whether reasonable, to be recorded. The brainstorming technique will be used for create and further discuss the concept of stakeholders' requirements/needs. There are some assumed potential requirements to be discussed as following:-

Construct 3 basements with sufficient carpark lots for staffs and visitors.

Food court for staffs and visitors

Centralized services counter to achieve the efficient services

Overhead bridge or underground pass for pedestrian

High speed internal technology to accelerate public services

On-line services for enhance the efficient of services

Comfortable and safe environment to staffs and visitors

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Space is ready for future manpower growth (for office, store, service counter)

Renewable energy concept to reduce the energy consumption and benefit to long life cycle cost.

Universal design and concept to adopt for disabled

5.4 Conclusion

Upon the completion of one day value management study on identify business needs, the VM facilitator will prepare a strategic brief to Senior Director of the client. The value hierarchy, accepted business needs will be presented for further development. This report is important for Senior Director to identify the business needs. The VM workshop will be conducted after the Senior Director has confirmed the key business needs and approved to proceed further.

6.0 Value & Risk Study on Options to meet business needs and Confirm project still required

Prior to commence of the study, the Senior Director has identified and approved the key business needs. The following assumptions of business needs have been identified:-

The new headquarter is to centralize all public sector departments. The comfortable working and services space to create as the welfare aware to staffs and visitors. (existing departments have the total area of 5000 sqm, clients want to have 20% increase up to 6000 sqm for the new headquarter)

High speed internal technology to accelerate public services and the On-line services to create for reduce public's visit time to headquarter.

The headquarters are allowed for upgrading and growth of manpower by increase 25% for next 30 years to inline with the progress of the city. (the target 3000 sqm with consider of 25% growth, will adjust up to 7500 sqm)

The traffic and connection to other facilities are convenient and well planned. Sufficient carpark to provide and the necessary Overhead bridge or underground pass for pedestrian to reduce the risk to cross the junction.

Energy saving concept to adopt in the project for the benefit of long time life cycle cost.

This stage of value & risk study will be chaired by the Value Management facilitator for one day study. The study will still adopt the structured job plan and the workshop will be held at the same location as pre-workshop. The attendees will be the key members from pre-workshop and together with the suggested design team as listed following:-

Firm

Position

Remark

Client's Organization

Senior Director

Project Sponser

Finance Manager

Purchase Manager

From Pre-workshop

VM Team (Independent) cum. RM Team

VM Facilitator (cum. RM Facilitator)

From Pre-workshop

Design Team

Architect

Civil & Structural Engineer

Mechanical & Electrical Engineer

Quantity Surveyor

Landscape Engineer

New involved team (Suggested)

Table 3: Attendees for VM Workshop

Value Management (VM) study and Risk Management (RM) study are closely related. The risk management stages may be logically carried out within the VM job plan. The agenda of the one study as listed below:-

TIME

ACTIVITY

Introduction

9:00am - 9:15am

Introduction meeting between all team members

9:15am - 9:45am

Group tour to existing workshop

Value Management Study - VM Job Plan

Risk Management Study - RM Intervention points

Information

9:45am - 10:30am

Present the identified business needs, value system with value study objective

Creativity: Brainstorming session and review

Select topics for business needs and risk brainstorming from FAST diagram

10:30am - 10:45am

Tea Break

Creativity

Risk Identification

10:45am - 12:00pm

Brainstorming Session and review

Brainstorm risks associated with business needs solutions

Brainstorm review of risks

12:00pm - 1:00pm

Lunch Break

Evaluation

Risk Analysis

1:00pm - 3:00pm

Issues analysis

Evaluate risks, select those requiring consideration, arrange the risks and ranking of risks

3:00pm - 3:15pm

Tea Break

Development

Risk Analysis & Response

3:15pm - 4:30pm

Development of selected ideas

Consider remaining risks, ranking of them;

Develop a response, discussion on action plan and review

Presentation

4:30pm - 5:00pm

Presentation

Develop risk register for presentation

5:00pm

End of workshop

Table 4: Agenda for Value and Risk Workshop Study

6.1 The Value Management Study

According to the identified business needs, the VM facilitator shall conduct a survey prior the study. There are several potential alternatives to be discussed as listed below:-

Rental of another building with the same functions as construction of new building;

Renovation and upgrade the existing building

Engage the Private Finance Initiative for construct the new building

Evaluate the above options with consideration of the pre-workshop created value systems and structured job plan. The brainstorming technique is used for evaluate the ideas. The selected idea of construct new headquarters after evaluation is investigated in more details of the feasibility and economic viability.

The developed cost estimate detail is as following:-

Land cost (12500 sqm x £300) = £3,750,000

Construction cost (7500 sqm x £2000) = £15,000,000

Purchase machinery & equipment = £3,000,000

Consultant fees (10% of all the above) = £2,175,000

Legal fees and agent fees = £500,000

Miscellaneous = £500,000

Total: = £24,925,000

The estimated cost is just within the project budget of £25M.

Upon completion of the value management study workshop, the risk management study is necessary to further development on each potential option.

6.2 The Risk Management Study

Although the high level risk assessment has been carried out and been registered for investigate high level options for meeting the business needs, the risk management study is still required at current stage to identify the risks of each potential option. This is to help Senior Director to make decision for further activities to proceed.

The risk management study is to carry out in sequence according to the framework below:

Risk Monitoring & Control

Risk Response

Risk Analysis

Risk Management planning

Risk Identification

6.2.1 Risk Management Planning

The client has created the risk management plan when they were register the risk assessment for investigate the business needs. During the current stage, the client will play the role and take full responsibility for the identified risks.

6.2.2 Risk Identification

All the participants (as listed in Table 3) to realize the potential risks for each option. Investigation prior to workshop and brainstorming during the workshop study are necessary to carry out for identify the kinds of risks.

6.2.3 Risk Analysis

The risk analysis is an assessment of each potential risk for the likelihood of occurrence (probability) and effect on the business needs (impact). The summary of risk identification and risk analysis for each potential option is tabulated as following:-

Options

Potential Risks

Likelihood

Impact

Risk Level

Rental of another building

Achieve efficient services

3

3

9

Comfortable working space

2

2

4

Required location

3

2

6

Transport & traffic congestion

2

2

4

Well developed surrounding facilities

3

1

3

Required occupy time

3

2

6

Finance constrain

1

3

3

Environmental & Sustainability

3

2

6

Renovation and upgrade existing building

Achieve efficient services

2

3

6

Comfortable working space

2

2

4

Required location

3

2

6

Transport & traffic congestion

2

2

4

Well developed surrounding facilities

3

1

3

Required occupy time

2

2

4

Finance constrain

1

3

3

Environmental & Sustainability

3

2

6

Construct a new building

Achieve efficient services

1

3

3

Comfortable working space

1

2

2

Required location

1

2

2

Transport & traffic congestion

1

2

2

Well developed surrounding facilities

2

1

2

Required occupy time

2

2

4

Finance constrain

1

3

3

Environmental & Sustainability

1

2

2

Table 5: Summary of potential risks

Risk

Likelihood

High (3)

Medium (2)

Low (1)

Impact

High (3)

9

6

3

Medium (2)

6

4

2

Low (1)

3

2

1

Table 6: Risk Matrix of Risk Assessment (3 x 3)

6.2.4 Risk Response, Risk Monitoring & Control

During this stage of risk management study, all the above mentioned potential risks will be the client's fully responsibility. This risk management study has identified the potential risks for each option. By select the correct option, it is able to avoid certain high risks. This risk management study to be updated into the risk register.

6.3 Conclusion

It is well controlled for confirm the preferred option through the value and risk study during the strategic project development stage. Upon completion of this study workshop, the VM & RM facilitator will present to Senior Director for recommend to confirm the project still required and this project can proceed to the next stage. Further VM and RM study will be recommended to carry out during project briefing stage.