What is the Goal of a Value Management Office?

Portfolio, Program, and Project Management Offices (PMOs) exist in a variety of shapes and sizes, with functions and services matched to the organization’s specific needs. Without the engagement of a Portfolio, Programme, and/or Project Management Office, effective portfolio management of programs, projects, goods, and/or services is rare. That is, it performs a decision support function for the main investment board in decision-making tasks that involve judgment, determination, and a sequence of actions to maximize investment return. Naturally, no single PMO design model will work for every organization.

Robert Kaplan discussed the concept of a Value Management Office (VMO) in 2015, stating that today’s organizations are trying to offer services at a lower cost and getting the benefits of doing so. Simply stated, a VMO is about putting knowledge into practice while computing the measurable predicted benefits that should serve as the justification and impetus for that investment. This service may be provided by a Portfolio, Program, and/or Project Office (PMO), but the change in title signals to everyone in the business that benefits realization, not initiative delivery, is what counts most. It “acts as an advocate of change in the organizational mentality in the way individuals think about both benefits and value,” as Thorp, J (2003) explains it. Creating and using a centralized cadre of benefits administration specialists makes far more economic and operational sense than asking each company or functional unit to acquire such knowledge on its own, especially to maximize return on investment.

A Strategy Execution Office (or, for that matter, a VMO) should help answer the following issues, according to Nieto-Rodriguez, R (2021):

1. What are our organization’s strategic goals? How will we attain these objectives—through programs, initiatives, goods, and/or services?
2. Which expenditure suggestions should we prioritize for our organization’s long-term success?
3. What is the greatest way to make the most of our current and future financial and operational resources?
4. Do we have the necessary personnel to lead these spending proposals?
5. Is there anything we can put on hold, delay, or postpone in the event of a rapid economic downturn?
6. Is the time appropriate? What happens if one or more of the efforts fails? Do we have a backup plan? Are we learning from our mistakes?
7. What do we get out of each project in terms of value and benefits?

Value is commonly considered subjective, with different people using different criteria to determine if they are getting value from a product or service in terms of results and advantages. This subjectivity is what makes it so important to manage value intentionally rather than as a by-product of any other management activity. Benefits and value management are mutually supporting disciplines that are both concerned with delivering value for money, which is something that is not well understood. The ideal combination of cost (affordability), risk (achievability), and rewards are characterized as the best value for money (desirability). As a result, each spending plan – as well as the entire portfolio – reflects the most efficient use of available cash. As a result, benefits administration should be as cost-effective as feasible. That is, the worth of anything is decided by the advantages received in relation to the resources spent to get it (Jenner, S and APMG International, 2014).

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