15 April 2014
If this is the first you've heard of ISO 55000, you are probably not alone.
But even if the January launch of the new international standards framework for asset management passed you by, it would be a mistake to think that it isn't relevant.
In essence, ISO 55000 creates a framework for all of the elements that organisations need in place to manage their assets effectively and economically. The framework includes areas such as:
- The nature and purpose of the organisation;
- Its operating context;
- Financial constraints and regulatory requirements; and
- The needs and expectations of the organisation and its shareholders.
Over time, companies may want to achieve certification to prove that their management systems meet best practice.
Where is it from?
Not so long ago asset management was largely a tactical discipline, focused on tasks like maintenance and renewal of assets like buildings, roads, bridges and rail infrastructure. It relied heavily on the experience and the professional judgment of people who knew the tangible assets inside out.
Today, asset management much more strategic, relying on business strategy, KPIs and sophisticated IT tools to assess assets' performance.
But businesses can't ignore the people aspect of asset management. Those involved need to be experienced, show sound professional judgment and get behind the aims of the business's strategy.
Asset management can help you to find the right balance between three crucial business drivers - cost, risk and performance. If you need to reduce cost, for example, you need to understand the level of risk you're taking and the impact it has on performance.
By developing a fully integrated asset management strategy, you align your strategic direction with what is happening on the ground in your company.
Who's doing it?
Within the regulated utilities - such as rail, energy, water, and gas - asset management is now a well-established part of business processes. Regulators like asset management because it provides them with clarity on business spending and a framework for testing whether investments are delivering as expected.
A good example is the water industry, an early adopter of strategic asset management that has enjoyed real performance and efficiency gains as a result. The recent high levels of rainfall also point to another useful aspect of asset management - once you have your assets assessed, valued and documented you can then interrogate the performance of those assets based upon a number of different scenarios.
In the water industry's case, many of its assets are designed around the threshold of one-in-50-year rainfall levels. With the increase in rainfall- perhaps to 1-in-200-year levels - there's a clear decision-making framework to act upon.
Outside of the regulated industries strategic asset management is increasing, although take-up is closely related to each company's commercial drivers.
Sounds easy, but
To properly implement asset management, companies must make sure it is embedded across the whole of the business, beginning with their people and without exception.
Too frequently, business leaders think that with the right processes and right software, the programme will take care of itself. Companies must give people enough time to become familiar with technical asset management tools before they are implemented, as well as incorporating their needs within the system.
Theory meets practice
Business leaders need to understand that the strategy is more than a piece of software and the sole responsibility of the IT department. Many large organisations go through cycles every five or six years of doing something new, which then often fails. One long-standing client of ours had delivered an asset management project successfully, but there was no evidence of it being embedded in the business. Why? Because the business had not made sure that there was a "people imperative" to keep the work current.
We also know of businesses that have gone to the market saying they wanted an asset management solution. But they approach suppliers with no strategy in place, no register of assets, no condition reports, and no asset management plans.
To succeed, asset management should be treated less as a tick-box exercise and more as just a good way to run your business.