Value for Money Analyser (VfMA) ™
Value for Money (VfM) is the term used to assess whether an organisation has/or will obtain maximum benefit from the goods and services it has purchased. Achieving VfM may be described as the balanced delivery of economy, efficiency and effectiveness.
- Economy– a measure of the inputs, considering whether a ‘fair’ price is being paid for the goods and services purchased.
- Efficiency- a measure of productivity, reliability, quality and sustainability, considering whether the resources purchased are being put to best use.
- Effectiveness- a measure of the impact that has been achieved, considering whether tangible benefits are being realised.
The Proving VfMA Model has been extended to include:
- Strategic Value-alignment & contribution of benefits to organisational drivers.
- Stakeholder Value– an analysis of stakeholder views and commitment
- Achievability– This can be configured to include factors such as Complexity Analysis, using the dimensions of Scale, Novelty, Interdependence, Diversity& Volatility. Other factors sets such as Capability & Capacity, Clarity & Perception&Change Readiness can also be included.
Figure 1: Proving VfM Process
VfM is high when there is an optimum balance between all three elements; a fair price is being paid, productivity from the processes and services is high and successful outcomes (benefits) have been, or will be, achieved; each contributing to the organisation’s strategic drivers and business objectives.
Value for Money™ (VfMA™) provides a research-based framework, process and software application that guides an organisation through a Value for Money assessment. The principal benefits include the ability to:
- Clearly and accurately identify procurements, services and projects that are failing, or unlikely to deliver, Value for Money.
- Support consistent, objective and transparent decision-making regarding investment funding.
- Create reports that highlight key areas of Value for Money weakness and risk; providing an invaluable checklist for business case, service and project improvements.
- Help develop the organisational capabilities and skills necessary to build robust future business cases based on the delivery of best value outcomes.