When it comes to innovating, virtually every business is pulling toward the same goal: pushing back the borders of what we know and can accomplish. A lot of the time, this means developing more efficient methods, and with as much as 80% of a project’s total costs being determined in its design stages, that process needs to be started early. The decisions you commit to at the outset can dictate the entire course your project takes – along with the tools and resources you’ll have available to make it happen.
When we talk about “value engineering”, we’re taking a detailed look at the impact innovative thinking can have throughout the whole lifecycle of a project or product. In construction, for example, it’s critical to get to grips with the unique challenges, obstacles and opportunities an upcoming project presents. While a lot of research and development goes into solving problems no one’s really got on top of before, there’s a whole other side to it. Where time, space or resources are an issue, the pressure is on to increase efficiency and lower costs at every stage of the project. Pushing for less expensive, more efficient and even “greener” products and processes is the foundation of most successful R&D Tax Credits claims, bringing value engineering right to the forefront of innovative thinking.
All fine so far – but what actually is “value engineering” and how do you do it well? The simplest answer actually comes in the form of another two questions:
- Is there a less costly way of achieving any of the projects’ specific goals?
- Crucially, can the costs be lowered without compromising on quality, performance or ambition?
If you’re actively exploring those questions, the chances are you’re doing value engineering – and probably some qualifying R&D activity with it. As for doing it well, it’s worth understanding that value engineering isn’t some vague overall goal that everyone can just loosely keep in mind. To see the benefit, you’re going to need people actively putting time into it. The people you choose for this need to have a lot of detailed knowledge between them, covering every aspect of the projects they’re working on. Faulty assumptions or expectations will definitely hurt you down the line, so depending on the business you’re in, you might need input from experts in anything from raw technical specifications to installation and supply chain management.
You need to set specific goals for your value engineers, and to be systematic in how you chase them. We won’t lie – there’s going to be some record keeping involved. Without a full picture of the money and time you’ll be pumping into the various elements of a project, your team will be blundering around in the dark trying to boost efficiency. It’s not about just bringing down whatever costs you can. It’s about identifying the most valuable costs to work on – the ones that really matter to your bottom line. As with other kinds of innovative work, it pays to get into the fine details.
On top of all that, you need to be responsive to your team’s suggestions and findings. Turning a value engineering exercise into practical, meaningful change takes work in itself. An easily missed factor in all this is that trying to boost efficiency and cost-effectiveness can in itself form the basis of an R&D Tax Credits claim. You need to break the mindset of innovation being “just part of the job” to unlock the full value of your R&D. Talk to RIFT to learn more about what R&D Tax Credits could mean to your business. Our technical teams have the expertise it takes to make sure your innovations always bring you the credit you deserve.
Get credit for your business innovation with research and development tax credits claim assistance from RIFT. Find out more about R&D tax credits for engineering firms, deep dive into the world of business innovation with our insights, or contact RIFT R&D today to find out how we can maximise your benefits.