Although building projects involve many technical aspects, we must not forget they are business ventures, with investors who want to maximize the return on their equity. Value engineering is a useful method to improve the financial performance of building projects, turning them into more lucrative investments.
In simple terms, the goal of value engineering is to accomplish as much as possible with each dollar invested. There are two main ways to increase value in building projects:
- Reducing project costs without sacrificing building functions and performance.
- Improving building functions and performance without exceeding the project budget.
Value engineering often involves trade-offs, where some extra expenses are assumed on purpose to achieve even greater benefits. For example, improving the insulation and air-tightness of a building involves additional costs, but you reduce heating and cooling loads. If the cost savings from purchasing smaller heating and cooling equipment exceed the additional building envelope costs, value engineering has been applied successfully.
Value engineering requires ample knowledge of building systems, including how they interact with each other. To apply the method successfully, a project design team must have members from several technical fields – finding the optimal configuration for building systems is much more difficult when the design process is carried out by isolated teams.