- September 21, 2021
- Posted by: Manuels Effe
- Categories: Insight, Value For Money
Over the years, I have had a lot of engagements with companies of all sorts, SMEs, and multinationals, supporting them in the pursuit of Value for Money from deployed resources.
Now a significant economic concept premised on obtaining the best value for expended sum, it has developed in modern management into a collection of a structured set of techniques, being applied for cost reduction, process improvement, and enhanced productivity.
Equally now a comprehensive plan of action aimed at optimizing output for maximum impact from available little resources and project delivery on time and to budget, the principles of Value for Money are applicable to both the private and public sector and even individuals in all ways of life.
To this effect, I have chosen to drive more interest in its application and use in all strata of life on all possible platforms and since I gave this indication, there has been a buzz of significant interest in all my social media handles. This is highly welcome and heart-warming.
There are lots of useful tips ahead as we progress.
Perhaps, we begin this way. Because resources are scarce, we live our lives, engaging the theory of opportunity cost.
It’s curious for an average person to have a plan to buy a new car and at the same time think of a summer holiday for his or her children overseas or for a company to think of setting up an assembly line and of building staff quarters at the same time.
Similarly, a Government would make a choice between building a highway and an ultramodern hospital the same year. We are, therefore, faced with making choices daily as we match scarce resources to needs. And matching scarce resources to needs remains a basic strategy for wealth creation but much as that remains the case, resources are continuously misallocated and misapplied at all levels – individual, corporate, and government, and obtaining Value for Money has become a mirage. The implication of this is the quantum of misery all over for the people – low and continuous slide in productivity, failed and failing businesses, increasing poverty, unemployment, deteriorating infrastructure, and most abysmal, falling standards of living.
Sad also remains the fact that while it’s essential that we ceaselessly try to optimize output for maximum impact from available resources, no matter how little, there is always the wrong perspective of choice as being to increase output or to reduce quality.
This is in the negation of the principle of Value for Money, which requires that we at all times strive to optimize resources, do more with less, and not increase output and reduce quality. We will discuss this in detail consequently and give a direction on how to go about it.
On the whole, the general principle of Value for Money teaches judicious use of input and improved processes to generate higher output, prescribing generous information on price, quantity, and quality for a choice to be made.
Value for Money is obtained when we are happy with a choice as being right and maximize satisfaction from scarce resources
It is on this score, we say a commercial product is deemed successful if it provides satisfaction on price, quantity, and quality (Value for Money) as it would rarely attract patronage in the absence of these.
Value for Money is obtaining maximum benefit from available resources or spending less, spending well, and spending wisely to achieve maximum benefit. It is a call to DO MORE WITH LESS, applying the Value for Money Principles.
For sure, we can do it, applying the principles. Look out for our coming edition.