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Value Analysis (VA) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Improving the function or reducing the cost can therefore increase value.
VA follows a structured thought process that is based exclusively on "function", i.e. what something "does" not what it is. For example a screwdriver is used to pry open a can of paint has a "function" of opening the container of a paint, and not the original connotation of securing a screw into a screw-hole. In value analysis "functions" are always described in a two-word combination consisting of an active verb and measurable noun. In the screwdriver and can of paint example, the most basic function would be "open can". This is the basis of what value analysis refers to as "function analysis"
The Function Analysis System Technique (FAST) is not an end product or result, but rather a beginning. It draws opens the subject matter under study, forming the basis for a variety of subsequent study approaches and analysis techniques. FAST uses rational logic (a unique "how" - "why" questioning technique) and the analysis of function to identify relationships that increase value.
Value Analysis is also referred to as "value management" or "value methodology" (VM), and "value engineering" (VE).
Taking the time to leverage “Value Engineering” techniques and doing a “Value Analysis” on functions being providing by technology solutions will provide your business with the best Return on Investment (ROI) concerning IT projects. IT should be a measurable service to your business. The question shouldn’t be “How can we cut are IT budget to save money?” instead it should be “How can we leverage IT to save money and improve operations?”. A common mistake when working with technology is to jump into a new technology because of the “COOL FACTOR” without taking the time to do a VA study. Sometimes this is referred to using technology as a toy instead of a valuable tool. A restaurant might find giving customers an Apple IPAD to order from a unique use of the technology and it might even draw some additional customers due to its “COOL FACTOR”. An actual study on the improvements in the customer ordering process versus the cost would make this type of IT project highly questionable. The question then becomes will the number of new customers the “COOL FACTOR” might provide be enough to provide a reasonable break-even on this type of investment.
Value analysis began at General Electric Co. during World War II. Because of the war, there were shortages of skilled labor, raw materials, and component parts. Lawrence Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable substitutes. They noticed that these substitutions often reduced costs, improved product, or both. What started out as an accident of necessity was turned into a systematic process. They called their technique “value analysis”.
Please refer to: [PDF] Value Methodology Standard