Value for money is like beauty in the “eye of the beholder”. If someone determines that your product or service is delivered on time within budget and to quality. They may determine that value for money has been achieved (all three measures must be met – quantitative, qualitative and within budget). Does sustainability now come into play in determining VFM as well?
Value for Money was initially defined as – pursuing Economy (careful management of available resources), Efficiency (delivering the best level of service for less) and Effectiveness (delivering the right service) (the 3 E’s) to achieve desired outcomes and maximise the benefit of those outcomes.
How about Equity (a fourth E)? This ensures that benefits are distributed fairly.
How about Environment (a fifth E)? This focusses on sustainability within the natural environment. For instance, switching from fossil fuels to renewable energy.
To try and simplify matters, what is Value for Money?:
Best Value for Money is defined as the most advantageous combination of cost, quality and sustainability to meet customer requirements.
To define further:
- Cost means consideration of the whole life cost.
- Quality means meeting a specification which is fit for purpose and sufficient to meet the customer’s requirements.
- Sustainability means economic, social and environmental benefits, considered in the business case.
Most important in seeking to deliver and measure VFM is a clear communication strategy.
- Define value at the outset
- Achieve a common understanding of value
- Establish who will be assessing value
- Look for independent verification of value
Should you require help and assistance with value for money then please contact us and we can provide you with a value added service.