Why ‘value for money’ is not just about the cost

At a time when donors are tightening their aid budgets and reconfiguring their development priorities, the discussion surrounding project management has largely centered on the need to deliver “value for money.” But it is important to remember that value for money goes beyond the narrow focus on attaining the lowest cost for a project — an aim that, in certain contexts, may prove to be short-sighted. In a video interview with Devex Editor Rolf Rosenkranz, Ricardo Vargas, director of the sustainable project management group at the U.N. Office for Project Services, said value for money can be achieved through effective project management. “Even the cheapest thing that does not add value is expensive,” Vargas said. “People need to understand [and ask themselves], ‘When I’m bidding for something, am I fulfilling everything, all the needs? Or am I just putting the cheapest possible price?’” UNOPS, which provides project management, infrastructure and procurement services, has an almost $1 billion portfolio consisting of 1,000 peacebuilding, humanitarian and development projects. Last year, it became the first organization to be awarded four project management certifications. Crucial to project management is a thorough understanding of the context in which the project will be delivered. For instance, in more vulnerable countries, value for money can mean entailing higher costs “to deliver sustainable results,” according to Vargas. There is also a need to overcome the notion that project management is a skill that belongs to the private sector — one that some see as contributing to “faster and cheaper” outcomes but is “not necessarily … good for people.” “I completely disagree with that,” Vargas said. “I think we need to use the best possible business practices.” Check out more practical business and development advice online, and subscribe to Money Matters to receive the latest contract award and shortlist announcements, and procurement and fundraising news.