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ISO 55000 defines asset management as the coordinated activity of an organization to realize value from assets.

I like the word co-ordinated, but I was never so sure about ‘value’.

That AM should be driven by the organizational objectives and targets was defined well before ISO 55000. Physical assets are managed in order to support a company doing what it aims to do, not for their own sake.

If the aims are evil, it follows the asset management isn’t going to be for the angels either.

Not long before it collapsed, I interviewed two Enron asset managers in London. They told me their main job was to know who to bribe and how far you could go before you were thrown in jail.  (I suspect they knew the end was near.)

In practice, for many of us, the bigger problem we face is not evil targets, but missing or stupid ones. Organisations don’t know what it is they want their organisation to deliver, other than not making a loss or a scandal. For infrastructure, it surely has to be a service for customers & the community; but how to set meaningful key performance targets for service is often hard work.

Transit has struggled with this forever, but even power generation gets muddled. In markets with shifting prices, what is the amount of electricity we want to produce at any specific time?  Apart from anything else, the answer has to involve costs, like spot cost per megawatt, and plenty of power organisations don’t know that. (I’d say rail generally doesn’t have a clue of their cost per passenger mile.) 

We default to targets like minimising unplanned outages, because that’s relatively simple. Or even more asset-specific measures like pavement condition index. (Aaargh!)

I am convinced the person who came up with the ISO 55000 definition felt clever – clever to avoid saying ‘lowest cost’ or ‘least risk’. Value is whatever an organisation thinks it is. (And we won’t define ‘asset’ very clearly, either.)

It’s out of scope to discuss where the value comes from or how to capture it in SMART targets.

Quite apart from the evil ones, and our own ethics as asset managers, I believe we have a real challenge with stupid or missing targets. In practice, we cannot just aim to be aligned, if there is nothing that makes sense to align with.

Smart asset managers get drawn into the question of organisational KPIs. I know I was.  I think setting meaningful infrastructure targets is closely allied to good AM thinking.

And as for all that missing cost analysis….

Anyone fancy attempting a better definition?