Return to site

Value Engineering

Defending value over price in a challenging economy.

 

Ian H Smith

Value Engineering is key to any high-value product or service - for both buyer and seller. This means engaging in an open Mutual Value Discovery process, where Value Engineering leads to the creation of a ROI Model.

Underpinning a ROI Model is theTime-Based Value of a particular Value Proposition - calculated as the 'Cost of Delay' or the 'Cost of Doing Nothing'. In a high-value, high-touch sell, this provides a vital counter-argument to deal slippage and is the best way to defend value over price.

The ROI for a Value Proposition should have a quantitative calculation for comparing 'Current State (As-Is)' with 'Future State (To-Be)'. The resulting ROI Model becomes The Case for timely purchase of the Value Proposition. This must be a win-win outcome for both buyer and seller.

Value Engineering can embrace both the tangible 'Economic Basis of Decision' and the intangible 'Emotional Basis of Decision' from a buyer perspective. Although the ROI Model is built on financial numbers, a more conscious calculation related to supplyside brand and related risk can be added.

The ROI Model can be created as a simple Google Sheet or Microsoft Excel spreadsheet or designed as an interactive Web app. You can buy my Value Engineering services for a fixed-price - simply one ROI Model at a time.

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OK