On asset management – A practitioner’s perspective

Before joining Raftelis in 2022, I had the opportunity to work in local government and utilities for several communities of different sizes, complexities, and organizational cultures in the Kansas City area, including serving as the Asset Manager at Kansas City Water (KCW). When I tell my family and friends that I have a background in Infrastructure Asset Management (IAM), the first question is usually, “What’s that?” Asset management is not a concept that is recognized or understood by most people. And yet, I believe good asset management practices have a significant impact on everyone’s quality of life today and will have an even greater impact in the future.

At a Glance

Asset management is an approach to ensure services are delivered efficiently using existing infrastructure for the longest timeframe.

The benefits of good asset management include improved decision-making, better budget allocation, and understanding of risks.

The challenges with asset management to tackle are specialization, uncertainty, qualifications, and culture.

To work in the IAM space, it is important to have a clear understanding of and definition of infrastructure. Infrastructure is essentially a series of complex, valuable parts, or assets, and systems that relate in such a way as to provide the services necessary to sustain life, economy, and community. Once those assets are defined, an organization must next understand the condition of those assets and the level of service they are expected to perform. This can then inform investment, maintenance, and operational decisions.

The problems that confront infrastructure in almost every community are multi-faceted, emerging, and significant, including aging infrastructure, climate change, affordability, and finding qualified staff. These challenges require an approach that is quite different from the more engineering and growth-based models of the past. This is where asset management provides a viable alternative.

Asset management is an approach

Asset management is an approach that helps ensure services are provided efficiently and effectively. When done correctly, it is designed to extract the most value from the assets to provide service for the longest possible time and with the least amount of negative risk. Because it is an approach, it relies not solely on any one thing. This is not an original take on the asset management discipline but reflects my experience as a practitioner of IAM.

The most valuable outcome of an asset management approach is how effectively it informs decision-making. In 2012, a survey done by McGraw Hill and CH2MHILL reported that organizations that adopted an asset management approach realized several benefits, including, but not limited to:

  1. Improved ability to explain and defend budget investments to governing bodies
  2. Better focus on priorities
  3. Better understanding of risks and consequences of alternative investment decisions
  4. Non-cost-saving business benefits (e.g. adjusting a business practice to provide a better outcome for the same price)
  5. Increased ability to balance between capital and operating expenditures[1]

Why adoption of asset management is hard

Unfortunately, this utility is not alone in this situation. Many of our clients report similar challenges.

Many organizations struggle to holistically realize the benefits of asset management. That may be because there are many factors that work against the wholesale adoption of an asset management approach. To name just a few:

  • Specialization – Asset management as a discipline has not historically been something people go to school to major in. The academic discipline of asset management is also riddled with acronyms and guides (ISO 31000 and 550000-series; GFMAM; PAS 55; IIMM; NAMS; RCM, RI-BAM, etc.) that few in a working utility or local government have the time to truly study and understand.
  • Uncertainty – The foundational concepts of asset management are often incredibly complex to answer and subjective to an organization. The breadth and depth of understanding required to implement asset management in a dynamic, ever-changing infrastructure environment is difficult and even overwhelming. Knowing exactly where to start or where the need is greatest can be very hard to recognize, even if you have a well-thought-out plan. Often, asset managers are left wondering if they are taking the right steps to move the organization toward a path of improvement.
  • Qualifications – Hiring a fully-qualified asset manager would require a candidate with an odd combination of cross-disciplinary experience, including systems engineering, data management, finance, maintenance and operations, political science, human resources, and management plus several professional certifications. Not an easy person to find or afford once found!
  • Culture – The solutions to problems advocated by an asset management approach require the kind of culture and structure that enables significant connectivity, collaboration, and communication. In other words, a utility or agency that’s silo-ed – either in their structure or their thinking – will struggle to apply an asset management approach.

As a practitioner of asset management, I often found myself in the position of deciding whether attention should be focused on what I “should” be doing as defined by the ISO 55000 series and other standards versus what I “could” actually do given the resources available to me. Many organizations spend significant amounts of time and money doing what they “should” do, such as creating a well-designed Strategic Asset Management Plan (SAMP), completing a detailed gap analysis, and developing a multi-variate, risk-based capital planning tool that was built and often maintained by a consultant engineering firm. These items can all be useful, to be sure, but they do not necessarily lead to better decision-making, due to lack of communication, lack of clarity around asset management objectives relative to other objectives, or lack of staff to implement.

Good information is a key factor

These observations and experiences forced me to think about asset management differently, particularly at KCW. I shifted my focus to what “could” be done. I realized we had to be selective about where we focused our energies to get the highest benefit for the lowest cost. For example, we asked ourselves a simple question: what allows us to make a good decision? The key factor was good information. Although we had tons of data from our GIS, CMMS, CIS, AMI, and other tools, it wasn’t all necessarily good data – the kind that would make us feel confident enough to base a decision on. In fact, upon examination, we discovered our data was often a major source of our problems. Up to that point, most of what had been collected in our major systems was designed for the benefit of one part of our organization without consideration of others. The rules that existed for the entry and control of this data limited the impact of what it could provide us relative to the problems we were faced with. In many cases, the systems caused a lot of our service problems because they contained data that contradicted or confused the team who relied on the data to deliver the service.

The right people working together

To address this problem, we used data and information management standards recommended by the Global Forum on Asset Management’s Asset Management Landscape. We then combined that with a problem-solving approach focused on connectivity, collaboration, and coordination with impacted stakeholders. From here, we developed a very strong asset management team comprising leadership in GIS and IT, as well as a data analytics team, and we developed tools that helped ensure data quality. Together, we were able to improve our relationships with – and develop an understanding of the work of – our talented operations staff, who could articulate the problems the system caused them. Finally, we built tools that had an incredible impact on our data quality and timeliness. More importantly, we built a framework for how to make better decisions using basic asset management principles.

It is this combination of understanding of what “should” and “can” be done in Infrastructure Asset Management that informs our approach at Raftelis. Ultimately, asset management is only useful if it helps organizations deal with the problems that they face in a way that considers their community, their culture, and their resources.

Our team members include practitioners who have implemented asset management programs both in utilities and local governments. We understand both the concepts and discipline of asset management and the technological and operational challenges associated with supporting it. Our team creates practical solutions that help our clients address the complex problems of today and into the future.

If your team is struggling with asset management or simply has questions, contact Scott at sparker@raftelis.com.

[1] McGraw-Hill Smart Market Report, Water Infrastructure Asset Management: Adopting Best Practices to Enable Better Investments, McGraw-Hill Publications, 2012.

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