Scientific Research and Essays Vol. 6(12), pp. 2470-2479, 18 June, 2011
Available online at http://www.academicjournals.org/SRE
ISSN 1992-2248 ©2011 Academic Journals
Full Length Research Paper
Integrating risk and value management using IRVM
workshops: Case studies in infrastructure projects in
UK
Saipol Bari Abd-Karim
1
, David J. Lowe
2
, Hamzah Abdul-Rahman
1
, Chen Wang
1
, Imran Ariff
Yahya
1
and Geoffrey Q. Shen
3
1
Faculty of Built Environment, University of Malaya, Malaysia.
2
Manchester Business School, University of Manchester, UK.
3
Faculty of Construction and Land Use, Hong Kong polytechnic University, Hong Kong.
Accepted 20 May, 2011
In infrastructure projects, even though both value management (VM) and risk management (RM) are
widely accepted as tools for effective project management, they have never been synthetically practiced.
To combine the two processes within a single project is practical and logical when both methods share
the same resources. Both VM and RM are systematic processes and involve a multi-disciplinary team in
creative IRVM workshops. This paper attempts to examine the application of IRVM workshop to
integrate RM and VM through case studies as a qualitative approach in four infrastructure projects in UK.
Results show that even through the application of IRVM workshop is very much dependent on several
factors such as time and budget constraint, complexity of project, and client’s requirement, it could
effectively quantify the VM and RM approaches to increase the exercisability.
Key words: Risk management, value management, infrastructure, project management, IRVM workshop.
INTRODUCTION
The opportunity of integrating value management (VM) in
conjunction with the formal risk assessment and analysis
started in 1993 when a city port authority required a value
engineering (VE) effort that would be augmented with an
application of a risk assessment (Dell‟Isola, 1997). In in-
frastructure projects, both VM (including VE) and RM are
well used (Weatherhead, 2006) and widely accepted as
the best practice tools for effective project management
(Griffin, 2006). Griffin (2006) argues that the issue is no
longer about whether they should be used but whether
the processes should be integrated. Furthermore, OGC
*Corresponding author. E-mail: derekisleon@gmail.com. Tel:
03-7967 3203. Fax: 03-7967 5713.
Abbreviation: APM, Association for Project Management, UK;
IRVM, Integrating Risk Management and Value Management;
OGC, Office of Government Commerce, Malaysia; RM, Risk
Management; SAVE, Society of American Value Engineers;
UK, The United Kingdom; VA, value analysis; VE, value
engineering; VM, value management; WID, waste incineration
directive.
(2003) mentioned that VM and RM are interrelated tasks
that should be carried out in parallel.
According to OGC (2003), the application of VM will
help client to identify the best way of meeting business
need while RM is used to manage the risks associated
with the solution that offers the best whole-life value to
the business and should not be seen as barrier to
innovation.
The main idea for integrating RM and VM (hereinafter
referred as IRVM) is to optimise value on a project.
Dallas (2006) stated there is little point in going to great
lengths to maximise the value of a project if significant
risks materialise which impair its delivery, thereby
destroying value, and a project in which all risk is avoided
is unlikely to maximise value. Meanwhile, Paliokostas
(2000) indicated that these techniques appear to be so
compatible and complementary, so that continuing to use
them separately could mean waste of time and
resources.
The OGC (2003) proposed that VM exercises are
carried out first, to determine what exactly constitutes
value to the business from delivery of a project. After that,
the likely risks to occur to the preferred option are