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Value Engineering

Value Engineering: Making Your Business Case

OS experts perform value engineering for our clients, helping them define and prove the business case from consulting to assessments and integrated software to technical content. OS helps companies transform Management of Change (MOC) from a “check the box” procedure to a business practice that drives real, actionable, ongoing insights and value. We work with your organization to identify value creation opportunities that lead to a clear prioritization of needs coupled with a business case. Once the strategy is created, the organization’s management team sets the priorities that are then supported by an action plan. Our team is with your team every step of the way to ensure your project or initiative makes financial sense for your organization and that timeframes and priorities are met.

Graphic that shows the 4 criteria for a Value Engineering Study: Business capabilities and dependencies, Potential $ benefits, Strategic fit, Condition of current processes/systems

The Value of Intelligent Operations

Intelligent Operations is the most efficient pathway to get to Operational Excellence. Because Operational Excellence delivers greater value by enabling organizations to outperform their competition, the business case for engaging in a transformative project is based on both value protection and value extraction. In the end, OE drives predictable production with the focus on meeting customer and project commitments.

Intelligent Operations components

Value Extraction versus Value Protection with Operational Sustainability

We begin our sprint assessment process to identify some quick wins early on that can be executed in the short-term. While some of the short-term opportunities focus on value protection, many of the more strategic opportunities require an interoperable model that enables value extraction. Software vendors without the deep domain expertise of OS often present value strategies solely focused on value protection, while consultants without implementable solutions often focus solely on value extraction. The OS approach to value engineering is an end-to-end vision that captures both opportunities and maximizes your business value.

How to increase business value? Identify areas to maximize performance. Minimize downside risks.

Value Protection versus Value Extraction: What’s the Difference?

Because value protection focuses on compliance and reporting to avoid negative consequences, it tends to deliver a “return to zero” value proposition while promising to mitigate possible financial impacts from the future negative outcomes avoided. In other words, the actual value is revenue neutral, and the perceived value is dependent upon avoidance of negative outcomes. In many organizations, automation efforts are often value protection initiatives.

Value extraction focuses on gaining efficiency, applying resources for maximum impact, and optimizing production. Value extraction can deliver a positive actual value and a positive perceived value as well, but is most effective when applied in tandem with value protection to create a solid foundation for efficiency initiatives. In most cases, transformation efforts are often value extraction initiatives.

Operational Sustainability understands both approaches and holistically examines your organization for opportunities to protect, extract, and create value. Then we help you define the opportunity and its potential impact on your organization in time, resources, and outcomes.

Graph that shows Automation Efforts (Value Protection) and Transformation Effects (Value Extraction)

Interoperability Drives Transformation

The key to long-term value creation that encompasses both value protection and value extraction is to re-architect with interoperability as a focus. The result is enhanced efficiency and improved speed of decisions. Without interoperability, it is nearly impossible to eliminate redundant sources of truth, leading to inefficiency, data and decision silos, and poor compliance outcomes. The OESuite™ software platform is an Operational Excellence software solution designed to deliver near real-time operational insights, facility and system visibility, data-driven decision support at every level, and performance metrics in every department.

Organizational chart

Performance Benchmarking

So, how does the interconnected nature of interoperability actually work to deliver value? Interoperability creates a performance management framework that ensures you’re monitoring performance through the lens of intelligent operations. That means you’re actively measuring and benchmarking against metrics that matter in your value chain. OS collects and analyzes your data focused in these areas.

Graphic that shows the framework and drivers to achieve OE.

Enterprise Strategy

At its heart, performance management is how you know if you got where you intended to go, based on the metrics (measuring stick) you determined were valid when you began your journey. Intelligent Operations provides the roadmap for that journey, and our advisors help you along the way to keep you on track and focused on the destination of Operational Excellence.

What Is the Value Engineering Process?

While each organization is unique, over time and experience, we’ve honed a value engineering process that works to ensure our projects start off with a strong value proposition, a roadmap for success, and clear objectives tied to the business case.

The 4 steps in the Value Engineering Process are: 1. Info. Review; 2. Interviews; 3. Site visit; 4. Workshop

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