Creating Value at Conception and Removing “VE”
By Roger G. Hill Chief Executive Officer & Chairman, The Gettys Group Inc. | June 05, 2011
Co-authored by Jerry Zeitner, Principal, Gettys
The primary mindset for any hospitality project is constructed around the client's vision, the property's aesthetics, and the appeal to the future clientele. Unfortunately, more often than not, the design that evolves and takes on life doesn't tend to meet one of the most important facets of the project – the budget. In an attempt to salvage the design that has already taken what seems like an eternity to perfect and reassure the client that all is well, many take a dangerous leap into a black hole called Value Engineering. Like any black hole, the design and information that enters into the Value Engineering realm cannot be retrieved and rescued. The design can crumble into an unknown subject matter that hardly resembles the original, ending with a budget that works and a design that doesn't. At the end of the project, did anyone really get what they want or have they settled for something that has made no one on the team happy?
The question to ask is how does one get all of the pieces to work in sync? The design, budget, and vision must be created from a single point of origin. Value Creation, unlike its Value Engineering adversary, should be at the forefront of project planning. Value Creation should be what is driving the project from beginning to end. What sense does it make to start looking for value halfway through a project?
For years the term Value Engineering has been a catch-all moniker for ways to reduce a project's budget albeit after the project is underway. Typically, this plan of action includes reducing the scope of work or modifying design with high hopes that everything still meshes in the end.
Value Engineering is solely driven by cost and budgeting, where Value Creation is steered by the overall aspects of a project that benefit an owner. At GETTYS, each of our projects is defined with the Value Creation approach immediately in mind.
First, we address the project constraints and then examine each of those to determine how best to work within the parameters including client expectations. Once the constraints are clearly identified be it budget, supplier selection, tight timeline, etc., we then summarize these specific hurdles and put a plan together from a dollar and cents perspective, which touches on each very important factor. Through this total cost approach, the best plan is to look into the overall budget and then outline every cost driver (inclusive of both finances and time) in the project, including but not limited to: supplier sourcing, product – FF&A as well as OS&E – project logistics, and ultimately installation.