Sudan University of Science &

Technology
College of Graduate Studies

Integrating Value Methodology and Risk Management

Thesis Submitted in Partial Fulfillment of the Requirement of Master of Science (M.Sc.) in Civil Engineering
(Construction Engineering)

By: Mohamed Mustafa Abdalla Mohamed Saleh

Supervisor: Dr. Eltahir Abu Elgasim Mohammed Elshaikh

September.2021
 Problem
Statement
Construction
Industry

Problem
Construction industry has many specific features and
is inert, Statement
because of which it lags behind other
industries in keeping to deadlines and realizing
production with minimum expenses and satisfactory
quality. The industry has a reputation for time and
cost overruns. This bad reputation is due to many
reasons. One of them is that the construction industry
is one of riskiest of all business types.
 Researcher's
Interest

Problem
Statement
Value Methodology
&
Risk Management
The use of Value and Risk methodologies has
become mandatory in many countries as part of the
project procurement process, and is widely used as
best practice in project management
Problem
Statement

VM & RM
Importance
 VM
RM Tawfig, M. (2016)
Abdulkarim, M. (2017) Habiballa, I. (2016)
Omer, A. (2017) Mohammed Salih, D. (2015)
Hussein, A. (2016) Ahmed, B. (2011)
Mohammed, D. (2015) Qurashi, R. (2006)
Problem
Mohammed, A. (2015) Eubayd, R. (n.d.)
Statement
Mohammed, El. M. (2007)

VM & RM
in Sudan
Construction Researcher's
Industry Interest
Almost all research on Value Methodology and Risk Management
done in Sudan concluded that; despite of their importance both Value
Methodology and Risk Management are rarely utilized, and their
application faces many obstacles such as; lack of awareness among
Problem
organizations, lack of knowledge, high costs, time consuming, lack of
training, rarity of professionals and the lack of standardization. These
Statement
factors limited Value Methodology and Risk Management
implementation and thus substantially affected the performance of
construction projects in Sudan by raising the costs, extending the
schedule, and decreasing the quality.

VM & RM VM & RM
in Sudan Importance
00000000000000 Develop and propose an integrated framework that facilitates the
Research
00000000000000 effective application of Value Methodology and Risk Management in a
Aim
00000000000000
00000000000000
single Value/Risk study by integrating Risk Management processes and
the various phases of Value Methodology job plan.

Objective
0000000000000 To explore both of Value Methodology and Risk
0000000000000 Management and gain a good understanding of their
a
0000000000000 benefits and method of application.

Objective
00000000000000 To investigate the rationale for integrating Value
00000000000000 Methodology and Risk Management in a single
b
00000000000000 study.

Objective To integrate Risk Management processes and the

00000000000000
00000000000000 various phases of Value Methodology job plan in a
c
00000000000000 single study.

Objective To incorporate risk in comparing value alternatives

00000000000000
00000000000000
d and automate the evaluation process.
 Q1: What is Value Methodology, its benefits, and its method of application
Objective
a Q2: What is Risk Management, its benefits, and its method of application

Q3: What are the similarities between Value Methodology & Risk Management
Objective
b Q4: Will there be a benefit of integrating VM and RM in a single study

Q5: Was VM and RM integrated before and how

Objective
c Q6: How can VM and RM be possibly integrated

Q7: What are the evaluation techniques suitable for the automation
Objective
d Q8: How to incorporate the effect of risk in the value index calculations
 Research
Design
Plans and the procedures for research that span the decisions from broad
assumptions to detailed methods of data collection and analysis.
 Research
Design

Quantitative Qualitative Mixed

The distinction between qualitative and quantitative research is framed in terms of using
words (qualitative) rather than numbers (quantitative), or using closed-ended questions
(quantitative hypotheses) rather than open-ended questions (qualitative questions).
 Research
Design

Quantitative Qualitative Mixed

Grounded
Narrative Phenomenology Case Study Ethnography
Theory

study individuals (narrative, phenomenology); explore processes, activities, and events (case study, grounded
theory); learn about broad culture-sharing behavior of individuals or groups (ethnography)
 Research
Design

Quantitative Qualitative Mixed

Grounded
Narrative Phenomenology Case Study Ethnography
Theory
 Research
Method
Data
Collection

Data
Recording

Data
Analysis
 Research
Method
Data Audio and Visual
Collection Documents Materials
Webinars
Books & Manuals Seminars
Practice Standards Workshops
Journal Articles Summits
Data Conference Papers Presentation keynotes
Recording Research Papers
M.Sc. & Ph.D. thesis

Data
Analysis
 Research
Method
Data
Collection
A journal for taking notes was kept
during the research as a protocol
for the recording of the data from
Data
documents and visual material. The
Recording notes reflect information about the
data source as well as key ideas in
the data sources
Data
Analysis
 Research
Method
Data
Collection

Data
Recording

Data
Analysis
 Research
Sequence
Phase 1

Phase 2

Phase 3

Phase 4
 Research
Sequence
Phase 1 This phase consisted of an exploratory review of the relevant literature with the
aim of gaining a better understanding of the research area thereby articulating
the research problem, developing research aim and objectives and formulating
research questions.

 Problem Statement
Phase 2  Research Aim
 Research Objectives
a) To explore both of VM & RM and gain a good understanding of their
benefits and method of application.
b) To investigate the rationale for integrating VM & RM in a single study.

Phase 3
Q1: What is VM, its benefits, and its method of application
Objective
a Q2: What is RM, its benefits, and its method of application

Objective Q3: What are the similarities between VM and RM

Phase 4 b Q4: Will there be a benefit of integrating VM & RM in a single study
 Research
Sequence
Phase 1 This phase consisted of the first round of data collection and analysis, this
round of collecting & analyzing data was used to answer the four questions
(Q1, Q2, Q3, & Q4) designed in the last phase and to achieve the two initial
objectives (Objective a & b).

 A broad approach for the integration

Phase 2  Initial Framework
 A new objective
c) To integrate RM processes and the various phases of VM job plan in a
single study.

Phase 3
Q5: Was VM and RM integrated before and how
Objective
c Q6: How can VM and RM be possibly integrated

Phase 4
 Research
Sequence
Phase 1 This phase consisted of the second round of data collection and data analysis,
this round of collecting and analyzing data was used to answer the two
questions (Q5, & Q6) designed in the last phase and to achieve the newly set
objective (Objective c).

 Integrated Value/Risk (IVR) Framework

Phase 2  Research Aim
 Additional Objective
d) To incorporate risk in comparing value alternatives and automate the
evaluation process.

Phase 3
Q7: What are the evaluation techniques suitable for the automation
Objective
d Q8: How to incorporate the effect of risk in value index calculations

Phase 4
 Research
Sequence
Phase 1 This phase consisted of the last round of data collection and data analysis, this
round of collecting and analyzing data was used to answer the two questions
(Q7, & Q8) designed in the last phase and to achieve the additional objective
(Objective d).

 Integrated Value/Risk (IVR) Software

Phase 2  Conclusions
 Recommendations

Phase 3

Phase 4
 Pre-Workshop/Study
Pre-Study Activities

 Conduct pre-study meeting

o Overview of the value/risk study
process
o Overview of the project and the
project documents
o Plan for value study
• Establish value study goals and
objectives
• Define value study scope
• Define value study schedule
• Identify value study
participants
o Plan for risk management (if a plan
not exist)
o Define the project’s performance
requirements and attributes
 Organize value/risk study logistics
 Workshop/Study
Information Phase

 Gather & analyze project information

(scope, schedule, cost & risk if exist)
 Conduct kick-off meeting
o Introduce value study process,
objectives, schedule, and participants
o Present project overview
o Identify project constraints and
stakeholder issues
o Identify & qualitatively analyze risks
for baseline concept (if not done)
o Review performance requirements
and attributes
o Rate performance of baseline
concept
 Conduct site visit
 Workshop/Study
Function Analysis Phase

 Define project functions

 Classify project functions
 Allocate risks to functions
 Evaluate functions (determine functions to
focus on in the next phase)
 Workshop/Study
Creative Phase

 Generate alternatives
 Respond to risks
 Workshop/Study
Evaluation Phase

 Elaborate on ideas
o Discard ideas with glaring flaws
o Refine ideas that may otherwise be
discarded
 Evaluate remaining ideas
 Identify and qualitatively analyze the risk
of alternatives
 Select promising ideas for development
 Workshop/Study
Development Phase

 Develop value alternatives

 Re-asses risk in light of the availability of
detailed information
 Review value alternatives
 Workshop/Study
Presentation Phase

 Prepare value proposals

 Conduct exit briefing
o Present value proposals
 Prepare and submit value study report
Post Workshop/Study
Implementation Phase

 Review and Assess Value Alternatives

 Conduct implementation meeting
o Determine the alternatives’
implementation decisions
 Revise conditionally accepted alternatives
 Develop implementation plan
 Implement value alternatives
 Implement risk response Plans
Post Workshop/Study
Follow Up Activities

 Monitor and control the implementation of

value alternatives
 Monitor and control risks
 Conclusion

1. The research concluded that there are significant similarities in the application of the
two disciplines, namely, both value and risk studies were conducted through facilitated
workshops and, a number of tools and techniques used in delivering the studies were
found to be common. . Also, participants in both studies were also found to be similar.
2. The research findings also suggest that, the application of an integrated study would
result in several benefits such as: saving time and resources, maximizing efficiency,
enhancing the communication, facilitating the flow of information and improving the
decision-making process.
3. It was observed that, different attempts were made to integrate value methodology and
risk management by a number of practitioners and researchers, and a three possible
approaches for the integration were used. Nevertheless, it is more common to integrate
risk management under the umbrella of value methodology studies.
4. It was observed that, their were complications introduced to the evaluation phase
caused by the incorporation of the risk factor in the process of evaluating value
alternatives, these findings suggest that, the participants of the integrated studies will
find themselves struggling to balance between value against risk, because a new
apparently value adding idea may introduce risks that had not been previously
identified.
 Recommendations
1. In considering how to integrate value methodology and risk management, three
different approaches have been identified. After evaluating the literature and the
practice of combining VM and RM during project management, the research followed
the first approach of integration by incorporating risk management processes in the
value methodology job plan as empirical evidence support it. Nevertheless, detailed
research needs to be undertaken to investigate the two other possible approaches of
integration.
2. This research has developed an Integrated Value/Risk (IVR) framework to work as a
guideline for integrating Value Methodology and Risk Management in a single study.
Nevertheless, the application of the IVR framework in a real project would provide
further information on the effectiveness of the framework and, hence, it is
recommended that this framework undergo further experimentation to facilitate the
refinement of the IVR framework and increase its validity and reliability.
3. In programing the IVR software, a number of qualitative risk analysis techniques was
considered, the risk probability and impact assessment technique was deemed suitable
for prioritizing the individual risks and thus utilized to incorporate the risk effect in the
value determination process and calculating the value index. However, detailed
research needs to be undertaken to investigate the more comprehensive quantitative
risk analysis techniques that numerically analyzes the combined effect of the identified
individual risks and other sources of uncertainty on the overall project objectives.