If Asset Management is to deliver better asset planning, we have a challenge. Are we living up to it?
The most obvious thing about AM is that it’s about physical assets. And for most of its history, the assumption has been that the main quality of an asset manager is that they need a background in those areas most concerned with physical assets: that is, engineering, operations, or maintenance.
Who else knows or cares about physical assets? And without that interest, AM might be unmoored: a branch of finance or corporate planning that simply doesn’t know or care enough.
The dilemma is that we need other skills that don’t come for free with delivery backgrounds.
Worse, we need perspectives that definitely go against what we learn in engineering school, or the motivation of operations.
- How do we nurture a profession of people who really like the realities of physical assets but think in a new way about them?
- How early do we need to reach potential asset managers?
There are some good signs – Dr Monica Beedles’ Street Smarts and Biz Smarts, for example, and the Canadian Network of Asset Managers (CNAM) work on AM competences. (And shout out to pioneers of new ways of getting to undergraduates – hello, Valerie Marcolengo!)
But, as CNAM points out, we have a chronic shortage of asset managers.
And many who struggle in post without the tools of effective asset management planning.
How do we reach those with the environmental, analytical, process, culture change and bigger picture skills we need?
What is your ideal undergraduate syllabus to grow the next generation of asset managers?
Thanks to the British Columbia South Island AM Community of Practice for the opportunity to discuss competences this week!
From script by Lou Cripps
What’s the responsibility of Asset Management? In my mind, there’s no question.
The output from an effective Asset Management system is a better allocation of resources to physical assets. It’s all about allocating $ and people where they are most needed, and not to spend or do where that is not needed.
And that can mean only one thing. AM – the system, not the team – should be the major input to the budgeting process for asset-intensive sectors such as power. And a major input wherever there is a significant amount of budget at stake.
The Asset Management input to the budgeting process is what Penny originally called the AMP. Given that ISO 55000 didn’t quite get it, I wonder if we should now spell it out – the asset management planning process (AMPP). One integrated, co-ordinated process that looks across the whole asset base with consistent principles on which to base decisions about priorities for the medium and long term.
We should expect – hope, indeed! – that this will over time have a major impact on business budgeting. That asset-related budgets will change significantly when we have a more optimising system, to make better use of information and plan further into the future.
The focus is not individual decisions, but the wider decision processes.
- What are the priorities for asset renewals, that is major work to replace or refurbish assets?
- What is the appropriate level of planned maintenance to optimise cost, risk and performance?
- Given the current state of the asset base, what is a realistic level of allocation to reactive work going forward?
- How do any growth or new assets fit within the overall strategy (and how important are they in relation to sustaining the assets/ services we already have)?
And this is not planning just about the physical assets. Both the money and the resources have to be considered: there is little point in arguing for money if there is not also a realistic plan for the people to deliver the work.
If we agree this is what Asset Management has to deliver, that also tells us what the main job of a dedicated AM function is and its key relationships with other functions. We can work through what kind of skills and capabilities we require, and where AM sits in the organisation.
It’s why I don’t consider Asset Management in any sense a sub-branch of Engineering – or the capabilities what we teach on current engineering degrees. It’s also not Finance, or HR, or Procurement, though it involves all of these.
And the bigger the amount of dollars at stake, the more vital that we do good Asset Management.
Talking Infrastructure is looking again at the AMP and the asset planning we require for future-friendly infrastructure. If you would like to be involved, contact us!
From script by Lou Cripps
Sometimes, it feels too much to do it all step by step.
Most organisations I work with don’t yet have any asset plans beyond five years. Some still only have annual budgets. How do you add in changing requirements for the longer term if you don’t even ask past five years?
And how many years ago did asset managers realise you can’t plan if you don’t think about where you want to get to? (At least 20, because strategy comes before planning in BSI PAS-55 published in in 2004.) But almost no-one has properly strategic ‘asset strategies’. They literally don’t know where they want to take their assets.
Bit by bit – and maybe getting nowhere fast.
But there is an alternative, maybe. Can we describe a compelling vision of where we want to be, first?
Can we even leapfrog some of the gradualist things we currently do?
Gradualism may be personal preference, or professional training. We haven’t always been bold about our mission. Some of us are detail people.
How would it be if we really believed we have a duty of care to make a big difference to the, frankly, fairly dumb way we’ve conventionally managed infrastructure?
Todd Shepherd and Julie DeYoung describe this as a system thing. What we have is a system, or paradigm, which resists change – so tinkering at the edges doesn’t work, because the old system will just bounce back as soon as you stop pushing.
This is, of course, quite a different concept of ‘system’ from the parts and pieces idea of a ‘quality management’ approach such as ISO 55000, which instead encourages a bit by bit, start with AM policy or SAMP. Better than thinking the first step has to be IT – but possibly no more ‘sticky’.
Quicker, and less heartache, to go for undermining the whole thing with strategy and long-term planning from the start?
from script by Lou Cripps
Just a thought about current Asset Management practice.
One core tool used by many is the maturity assessment or gap analysis. See, for example, the Institute of Asset Management’s SAM+ tool.
The concept here is to audit an organisation against a standard, recognise its shortfalls against that standard, and recommend actions to close the gaps – in an implementation plan often referred to as the Asset Management roadmap. The standard could be ISO 55000 series, or perhaps more usefully the 39/now 40 subjects in the GFMAM Asset Management Landscape.
ISO 55000 has some oddities (don’t get me started here on the terms ‘SAMP’ and ‘asset management plans’), but the involvement of far more people in the revision in 2024 probably makes its coverage more realistic.
The problem with the world of AM assessments and roadmaps isn’t fundamentally which topics we assess.
It’s that we simply don’t take our own principles seriously.
Alignment with organisational objectives is surely the key organising concept in ISO 55000. And yet we still propose AM implementation against standards – rather than our corporate priorities.
We also have a history collectively of ridiculous outputs, roadmaps that detail 70 or 130 different actions, for AM teams of perhaps 2 or 3 people to implement in the next 2 years – as though we had no experience, no common sense of what it’s like to implement major change. Almost as though we aren’t taking the AM Landscape ‘red box’ Organisation & People into account at all.
In Asset Management, there isn’t a ‘right’ way to do everything. That’s engineer talk. The optimal way forward is the best realistic option for us, for where we are now, for what our organisations are trying to achieve.
Sure, there are some things which are probably always a bad idea to do, and some that are usually good. But it’s not about a set of rules. Not a template we can fill in, leaving our brains in a jar somewhere.
Whatever we call it, a top-level strategy for Asset Management is essential. But it only makes any sense as a case for how AM will contribute to our organisational targets and challenges. And the practical actions that will do most to support the overall business strategy.
Yeah, the answer is almost always going to be a better planning process for our assets.
But if we start by taking something from inside AM, like ISO 55000 or GFMAM 40 Subjects, and use that as a basis to propose priorities for implementation, we are doing what asset people have too often done before.
Ignoring the business priorities. Not being aligned, right from the start.
Instead, the first thing is to make sure we really understand the organisational challenges, by talking with the people at the top. They won’t always be crystal clear, but that’s the right terrain to start with. Perhaps we’ll even be able to assist in articulating the challenges.
Then talk about what we can realistically do with AM to meet them.*
The gap assessment we require is the gap between what AM could usefully do for our organisation and what we are actually achieving at the moment.
*In my mind, there is very little chance that the corporate priorities for infrastructure won’t require good Asset Management, urgently. We are definitely not at risk of talking ourselves out of a job.
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