Value has come right up the Project Management agenda recently, with its pride of place in 2021’s 7th edition of the PMI’s Guide to the Project Management Body of Knowledge – the PMBOK guide.
But it has always been an important concept. The problem is that, between them, PMBOK 7 and the 7th edition of the APM’s Body of Knowledge (the APMBoK) offer us three definitions, from the nebulous to the precise.
So, what is going on here. And what really is Value?
This video is safe for viewing in the workplace.This is learning, so, sit back and enjoy
Let’s start with precise vagueness. We can expect a decent dictionary to offer a precise definition of the word, but not mathematically precise. In that sense, we’d expect a dictionary to be ague.
My favorite dictionary says:
the worth, importance, or usefulness of something to somebody.
the desirability of a thing, often in respect of some property such as usefulness or exchangeability.
So, let’s take a look at what the PMI’s PMBOK Guide says.
The worth, importance, or usefulness of something.
Well, I know what dictionary the authors stole that from!
PMBOK 7 tells us that value is subjective and the same thing can have a different value to different people.
Now let’s have a look at what the Association for Project Management (APM) has to say.
A standard, principle, or quality considered worthwhile or desirable.
In value management terms, value is defined as the ratio of ‘satisfaction of requirements’ over ‘use of resources’.
The first part of this definition is pretty much the same and bears a close but not identical resemblance to my second dictionary.
But the APMBoK definition gives us something else. The second part of its definition describes the most common way to measure value in projects: “as the ratio of ‘satisfaction of requirements’ over ‘use of resources’“.
To paraphrase this, Value = what you get / total cost
…or as an equation:
But we are not done with the PMI’s PMBOK Guide yet. It has another definition…
The net quantifiable benefit derived from a business endeavor that may be tangible, intangible, or both.
This definition was inherited from PMBOK 6.
To paraphrase this definition, Value = Net benefit = Total benefit – Total cost
… or as an equation:
So, we have two ways you can calculate value:
Carefully curated video recommendations for you:
I asked Project Managers in a couple of forums what material things you need to have, to do your job as a Project Manager. They responded magnificently. I compiled their answers into a Kit list. I added my own.
Note that the links are affiliated.
For more great Project Management videos, please subscribe to the OnlinePMCourses YouTube channel.
If you want basic Management Courses – free training hosted on YouTube, with 2 new management lessons a week, check out our sister channel, Management Courses.
For more of our Project Management videos in themed collections, join our Free Academy of Project Management.
For more of our videos in themed collections, join our Free Academy of Project Management.What is Value? ...or Project Value? | Video Click To Tweet
Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 14 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.