Examining the role of value management in controlling cost overruns

Abstract

The building sector is one of the most important contributors to the Maltese economy. This influence was further demonstrated during the global pandemic, since this industry was critical to the country's stability as well as economic prosperity. However, issues attributed to cost overruns, sustainability, and value, are still a major concern. The scope of this study is to bring new project management tools and techniques to the forefront associated with the concept of Value Management, and to examine how their application can help in controlling cost overruns. A review of existing literature was conducted in order to evaluate the causes of such overruns and the relevant value management techniques which will help in their control. The research methodology adopted for this study took three stages; the Preliminary Search, the Academic Search, and the Manual Search. This was followed by a quantitative analysis, which was adopted due to the sample size and the form of statistical analysis required. Hence, a questionnaire was strategically designed in order to analyze the perception of different construction professionals regarding the implementation of value management in construction projects, and the perceived level of importance of different value management techniques in controlling cost overruns. This enabled the author to analyze the perception of various stakeholders within the construction industry, each having different work designations, level of experience, and level of understanding of Value Management techniques. The data collected from the questionnaire was analyzed using IBM SPSS. Three types of tests were used in order to analyze this data, being: the Freidman Test, the Pearson Correlation, and the Pearson Chi‐Square test. A number of conclusions were derived from this analysis, including which value management techniques were deemed to be most important in controlling cost overruns, the impact of a construction professional’s experience on the level of understanding of these techniques, and the relationship between a particular work designation and the level of understanding of the techniques. Lastly, a set of recommendations was provided with the aim of removing elements which create cost overruns, with the ultimate goal being that of eliminating the risk of cost overruns from first principles.