See the big picture with a single, integrated view of assets

Finding balance in a fast-paced world

Being asked to achieve more with less is a constant balancing act that is fast becoming the ‘norm’ for many asset intensive organisations.

Shareholders and boards are looking to the leaders of organisations to collectively enable, achieve and exceed strategic goals. For leaders in asset intensive industries, this typically means equipping their organisation to make informed and timely decisions that guarantee service levels and mitigate risks, whilst maximising the useful life of assets and shareholders’ return on investment.

"Achieving more with less is fast becoming the 'norm for many asset intensive organisations."

Achieving this in a world that is rapidly being reshaped by technology, in what the World Economic Forum describes as the fourth industrial revolution, is not a straightforward task. The relentless pace of change means that even the most mature organisations are finding it increasingly harder to keep pace and anticipate what is required to effectively deliver services.

Today’s tech-savvy consumers also have high expectations of what they’ll receive - which is nothing less than guaranteed access to essential services. When peoples lives or work are interrupted by assets that are badly designed or fail, they become frustrated and increasingly vocal through social and other media outlets. High profile dissatisfaction puts organisations under pressure from the media, regulatory bodies and governments, leading to greater scrutiny or red tape, which can hamper business agility and performance.

Take, for example, the ongoing power outages in Australian cities due to extreme weather conditions. Consumers want answers, a ;fast resolution and increasingly, financial compensation. Blackouts that affected Victorians on just one day in January this year resulted in a $5 million compensation package being put together by power utilities to compensate about 50,000 people. This is separate to other independent claims for financial loss.

As volatility increases, so will potential claims for compensation, unless your organisation has the mechanisms in place to meet service level expectations. Your ability to predict and influence the performance of assets, operate and maintain assets, deliver services and make informed decisions, all while engaging and informing your consumers, will become even more important.

"CEOs want their organisation focused on "basics' like asset utilisation and investing in ERP and automation capabilities."

Building a foundation

In dealing with this rapidly changing operating environment, it’s critical not to lose sight of the importance of getting the basics of asset management right and laying a strong foundation to facilitate transformation. Gartner’s 2017 CEO Survey found asset intensive CEOs want their organisation focused on ‘basics’ like asset utilisation and investing in ERP and automation capabilities, rather than in shiny, new ‘pure digital’ technologies (think AI, IoT, Mixed Reality, Digital Twins).

So what does a solid a foundation look like? Global best practices put the emphasis on defined and consistent approaches to sharing information across your organisation. The international benchmark for asset management—ISO 55000—endorses an integrated organisation-wide approach as a means of ensuring asset management translates to informed decisions, well-run organisations and ultimately, value for stakeholders. While leaders know asset management forms part of their broader remit to drive innovation, productivity, compliance and performance gains, they sometimes overlook the full cost of incomplete or conflicting information that is managed and maintained by disparate departments or people, processes, data and technology scattered throughout their organisation.

Aligning with global standards

The body responsible for global standard-setting, the International Organization for Standardization (ISO), advocates an integrated approach to asset management. Failure to adhere to any one of these principles will likely impact the potential value that an organisation can extract from their assets.

According to ISO 55001, optimal asset lifecycle management
should be influenced by four fundamental principles

  • Value

    Focus on the value that assets provide to the organisation and its stakeholders.
  • Alignment

    Alignment between asset management decisions and achieving organisational objectives.
  • Leadership

    Use of leadership and workplace culture to affect value and the success of asset management.
  • Assurance

    Use of asset management to provide assurance that assets will fulfil their required purpose.

Alignment with these guiding principles necessitates a coordinated, whole-of-organisation approach to asset management, underpinned by a connected set of integrated processes and technology that helps you to understand all parts of your organisation in a uniform way.

This approach should connect enabling business functions - such as Finance, HR, Procurement, Logistics and Operations - with asset management functions to work as a homogenous unit, with a common goal of optimising performance, while minimising the cost of ownership across the asset lifecycle.

Many asset intensive organisations are held back from achieving ISO 55000 alignment because they lack the ‘glue’ that binds all their asset management systems and processes together. While your processes may work well in isolation, a technology-enabled integrated approach completes the picture, allowing organisations to reach asset management maturity, realise best-practice alignment and maximise asset performance.

ISO in action

Gladstone Area Water Board (GAWB) is the first water service provider in Australia to gain ISO 55001 certification. Previously GAWB was relying on multiple systems, processes and technology platforms to gain a big picture view of its asset performance.
John Tumbers, Chief Operating Officer, Gladstone Area Water Board said “Ultimately, there was a desire for one source of truth
to better manage our assets and drive operational efficiency.
“We now have a comprehensive view of the costs and resources involved in keeping our assets running, so we can measure how they are performing, predict when they should be replaced and understand how much they’ll cost to maintain.
“We have achieved ISO 55001 certification for our asset management system, which essentially means we are making prudent and efficient decisions about our assets that best serve our end customers, which is vital to us as a price regulated business.”

Barriers in your business

Effective asset lifecycle management is ultimately enabled by people, process, data and technology. When operating and integrating well, these functions can become enablers for effective decision-making. However, they often operate as silos and in this case, irrespective of how robust they might be, the organisation can be left blindsided by a lack of information management.

Silos in your people, processes and data

Consider the way many organisations manage their asset lifecycle via multiple departments. For example, the team that looks after day-to-day operations and maintenance may be separate from the team that undertakes long-term capital planning and associated activities.

Although both teams’ work activities can impact each other - and the overall management and performance of assets - they will often use independent people, processes, data and technology, which do not share a common view of an asset.

Additionally, supporting business functions like finance, human resource management,  procurement and logistics indirectly affect how assets are managed and perform, yet often rely on their own unique processes, spreadsheets and systems.

Loosely coupled data from disparate sources that don’t share the same internal taxonomy, logic, KPIs or information currency is a recipe for confusion—not clarity and consistency. This lack of unified data doesn’t enable consistent, informed decision-making because fragmented, uncontrolled information is often less reliable and incomplete.

Silos in your technology

Despite the obvious need for a more unified approach to asset management, some organisations avoid making change because they have invested so heavily in their existing technology.

Traditionally, asset-intensive organisations have favoured the use of standalone point, best-of-breed or custom-built software to manage discrete parts of the asset lifecycle. While this approach probably satisfies the requirements of individual business functions, in doing so, organisations are assuming that the key business disciplines required to holistically manage assets over their lifecycle can be managed via isolated, or at best, loosely connected or manual arrangements.

In a complex organisation responsible for managing critical assets—that assumption is a fallacy. It’s equally risky to believe that best-of-breed or custom-built solutions don’t come at a cost.

How are you paying?

  • Are you paying because teams have to work harder to share and interpret information across departments?
  • Are you paying through support, maintenance and upgrades, the added time and energy it takes your IT team to keep the lights on, all at the cost of ignoring business transformation initiatives?
  • Or, are you paying because your decisions are not as informed, appropriate or well-timed as required?

Traditional asset management software often has one of two flaws:

  1. It is easy-to-use, but doesn’t offer sophisticated insight across the asset lifecycle
  2. It is specialised or bespoke, but doesn’t integrate with other parts of your business

The use of custom-built solutions or spreadsheets to manage assets typically results in an overly simplistic view, which doesn’t tend to offer the right level  of detail to ensure data completeness and conformity. You need solutions with advanced business logic and rich features to deliver in-depth insights.

Consider a simple case of a pothole on the road. The isolated pothole alone can’t support strategic decision-making, but if your software can guide crews to collect consistent information and spatial data about every pothole, it can contribute to a meaningful understanding of road condition, degradation rates and service level impacts. This then feeds decisions on expenditure and subsequent capital and operational work programmes.

"Asset decisions are mulit-faceted in nature and often need to be considered in conjunction with other enabling pieces of information."

On the flip side, standalone asset management software may be advanced in terms of features and functions, but if it is not integrated with your other enterprise software systems, you’re potentially missing pieces of the puzzle when it comes to making better strategic asset decisions.

Asset decisions are multi-faceted in nature and often need to be considered in conjunction with other enabling pieces of information: if asset information can’t be contextualised and integrated with the likes of finance, procurement, logistics and operations data, your picture is incomplete and potentially only conveying part of a broader story.

The lack of a unified, integrated approach will, in most instances, not enable consistent, informed decision-making. Fragmented, uncontrolled information is less reliable and accurate, and is often incomplete. This, in turn, does not lay a good foundation for organisational effectiveness, rapid iterative change and attainment of prescribed service levels.

"It's essential to have building blocks in place - integrated people process, data and technology."

Integrate and transform

Leaders with the courage to disrupt ‘business as usual’ by initiating transformational change will benefit from integrated solutions that enable you to stay abreast of change, while creating an ongoing culture of innovation and high performance across your organisation.

When it comes to successfully driving transformation to reach asset management maturity and maximise asset performance, remember the adage of  ‘crawl before you walk’.

True transformational change cannot happen through the latest technological advances alone and it is essential you have the foundational building blocks in place first – integrated people, processes, data and technology.

Making the right decisions is a heavy responsibility and one that hinges on
well-designed, integrated approaches and tools that are embedded within your organisation.

Properly implemented integrated asset lifecycle management enables organisations to make informed decisions about how, when and where to allocate expenditure, resources and people in both the effective management of assets and in guaranteed delivery of essential services.It’s time to streamline and improve.

It’s time to push back against processes that encourage silos, and instead automate information sharing through enterprise approaches that reduce time-wasting, duplication and inconsistencies.

Having the information you need to demonstrate asset management leadership in the face of the unprecedented changes occurring in your industry can only come from a whole-of-organisation approach.

Discover More:

Unlocking the benefits of Asset Management through Ci Anywhere

Australia’s billion-dollar asset management task demands a contemporary approach

Top 5 reasons you need to revisit asset management

Publish date

13 Nov 2020

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