The formal definition of Asset Management in the ISO 55000 standard is “…… the coordinated activity of an organization to realize value from assets”.
This focusses on the value obtainable from assets and their useage, not just ‘managing them’. So it is much more than just caring for assets (maintenance). Similarly it is more than buying and selling assets, as implied by the financial world in relation to management of an investment portfolio. The focus on value creation or realisation is also evident in how we recognise what an asset it in the first place:
“An asset is an item, thing or entity that has a potential or actual value to an organization” and “Assets exist to provide value to the Organization and its Stakeholders“. (ISO55000)
The assets can take many forms – physical equipment and infrastructure, money and credit, or more intangible things like information, reputation or intellectual property. In all cases they are assets because the have, or offer potential, value. And, through asset management (over their whole life cycle) such value can be realised.
The IAM’s “The Big Picture – What is Asset Management?” is a good general introduction. And for further information try www.assetmanagementstandards.com and “Asset Management – an Anatomy” (from www.theIAM.org) .
Firstly, it is not just “professional management of equipment maintenance”. Despite the common re-naming of maintenance as ‘asset management’, this is really not right. Maintenance is asset care, not asset management. The whole life cycle management includes choosing what to buy/build in the first place, how best to use/operate it, care for it (maintenance) and ultimately decommission, replace or repurpose it. Asset Management considers how best to do all these things, in a joined-up way. This involves juggling all the costs, risks, performance and sustainability considerations to maximise the net value to the organisation and its stakeholders. And this multi-dimensional competence is not limited to physical assets either. The skills, processes, tools and best practices in Asset Management apply to both tangible and ‘intangible’ assets – anything that is of value, or potential value, to an organisation.
Asset Management is therefore not just Financial Assets management. Although the financial services industry does indeed juggle costs, risks, performance to maximise net value, it only does so for certain classes of asset. The wider discipline of Asset Management addresses the total organisaitonal capability to optimally manage the full portfolio of different asset types, networks and systems upon which it relies.
To find out more, try some of the ‘taster’ modules of our e-learning programmes at www.assetmanagementacademy.com
Asset Management has been evolving for at least 40 years as a recognized management discipline, The origins lie in two fields, both facing crises and converging on similar conclusions about what needed to change. One root is the North Sea oil and gas industry during the 1980s: the combination of the Piper Alpha disaster (with 187 fatalities) and the oil price crash forced the whole industry to revaluate the business model from the ground upwards. BP and Shell led the way, developing an integrated, cross-discipline view of value-maximization over the whole life cycle of their reserves, production platforms, and infrastructure. Results were spectacular – a 75% reduction in safety incidents within 4 years, a 40% reduction in total operating costs, and 5-10% increase in asset system uptime and performance.
In the same period, the public sector services (especially water and wastewater) in New South Wales, Australia were suffering from a combination of cumulative degradation of core infrastructure (due to a history of short-termism and annual budget focus), rising operational costs, and poor service. The state premier forced private sector disciplines of strategic planning, risk management, and value-based proactive investment, increasingly consolidated as an ‘Asset Management’ business approach.
British Standards and the UK Institute of Asset management developed the first public definition of requirements for good asset management practices in BSI PAS 55 (“A publicly available specification for optimal management of physical assets”). This was an international collaboration, led by John Woodhouse of our company, with 15 countries and 10 industries involved, leading to a worldwide best-seller (outstripping even the popular ISO9000 Quality Management standard). PAS 55 is still a great guide for understanding and establishing good practices, and is available from www.ansi.org
Asset Management ensures that all assets are acquired/created, used, maintained, disposed/renewed in line with delivering the organization’s business objectives. In other words, it forces everyone to focus on real value for money, breaking down departmental silos, reducing short-termism, and resolving conflicting priorities. This yields better integration and coordination, reducing re-work, waste, ‘lost opportunities’, and communication problems. Decisions get made faster and on more robust and transparent value criteria rather than localized self-interests.
Organizations that are applying Asset Management methods show significant reductions in total operating costs (often 20-40% ), greater asset systems performance and customer service (ranging widely from 3%-25% improvement), and much greater transparency, coherence, and credibility in their activities. This raises the confidence of stakeholders such as regulators and investors and also stimulates much greater staff engagement and productivity. An Asset Management transformation program is not easy – it challenges many aspects of what an organization does, and touches almost everyone – but the prizes are enormous, as evidenced by the case studies and validated benefits increasingly reported.
Visit our Case Studies page to see the scale of some of these transformations.
The principles of good practice asset management connect together the worlds of finance, operations, customer service, and engineering. In high-level terms they involve:
Asset Management skills are among the most valuable that you can develop in any career. They are highly transferable and bridge the gap between technical/functional responsibilities and organization/business management. A good Asset Manager can be described as a ‘specialist generalist’ – someone who understands, and can harness, a broad range of concepts, practices, and capabilities, retaining a clear vision of what is worthwhile and why. This involves leadership skills, communication skills, and strategic thinking, as well as the more technical aspects of risk management, life cycle costing, optimal decision-making, information management, change management, performance monitoring, and continual improvement practices.
A good place to start in your learning journey is a Foundation-level training course. This introduces core concepts and the variety of Asset Management subjects in which more specific skills and understanding are needed. Thereafter, we offer a multi-step professional development pathway via Certificate, Diploma, and Masterclass qualifications, with formal recognition via the IAM Qualifications and/or WPiAM examinations. These training options, available as classroom courses, virtual (remote) training programs, e-learning courses, and personal/group coaching options, can all be found at our extensive Asset Management Academy.
For the development of organization-wide competencies, we recommend a systematic initial assessment of current capabilities, to ensure that existing skills are recognized and built upon. Our approach incorporates the IAM Competence Framework for Asset Management (which we helped to develop). This is a structured coverage of the 7 key roles in asset management, at different levels of responsibility, and 28 competency areas, with 128 skills and knowledge elements, that need to be considered for their criticality and value. Building an effective transformation program then involves a blended learning approach, using a mix of education, skills training, coaching, and culture change. This is an area where The Woodhouse Partnership is uniquely experienced and effective. For more information on such options, contact us.
A SAMP is the ISO 55000 name for an Asset Management Strategy. It documents the consensus about the current situation (with respect to assets, context, capabilities, etc), the strategic objectives, and the plans to achieve them. Most importantly, it takes a holistic view of the asset portfolio and the development of the organization’s asset management capabilities. The role of a SAMP is to ensure that organizational direction is translated into practical programs of delivery (top-down alignment) and that operational realities of asset condition, performance, risks, and opportunities are (upwardly) recognized and included in the realistic
The Strategic Asset Management Plan (SAMP) guide, authored by John Woodhouse, has been developed to provide guidance for organizations who manage physical assets, and who wish to put in place or improve an existing management system for asset management. It sets out a practical and pragmatic approach to the development of a SAMP or Asset Management Strategy, that will conform with ISO 55001 requirements and clarify priorities, align stakeholders and deliver the best possible value to the organization. The Asset Management SAMP guide is complementary to ISO 55002 (including the current updates, which expand on the importance and role of the SAMP) and is available to purchase now.
We have detailed more information on how we can assist you to develop a SAMP in your organization here.
SAMP TRAINING COURSE: the Woodhouse Asset Management Academy offers a 2-day SAMP course providing real practical insight into the development of effective strategies for asset management, which is suitable for all levels of asset management experience. Head to our Academy for more information.
In 2002-2008 the Institute of Asset Management (IAM) in conjunction with British Standards Institution (BSI) developed PAS 55, the first ‘publicly available specification for optimised management of physical assets‘. This was led by John Woodhouse of our company, in collaboration with 50 organisations from 15 industry sectors in 10 countries. PAS 55 became an international bestseller, with widespread adoption in utilities, transport, mining, process and manufacturing industries worldwide. it is still a valuable aid to understanding and implementing good Asset Management practices.
In 2010, the International Standards Organisation (ISO) accepted PAS 55 as the basis for development of the new ISO 55000 series of international standards.
ISO 55000 Specifies the overview, concepts and terminology in Asset Management
ISO 55001 Defines the requirements for a management system for Asset Management
ISO 55002 Provides interpretation and implementation guidance for such a management system
ISO 55010 Guidelines for the alignment between financial and non-financial asset management functions
For more information on PAS 55 and ISO 55000 series visit www.assetmanagementstandards.com
ISO 55001 is the requirement specification for an organisation’s management system (for Asset Management), so it is not the basis for certifying an individual person. If you are seeking Asset Management qualifications (e.g. formally recognised Certificate or Diploma) please head to our Asset Management Academy for further information.
For organizations seeking ISO certification of their Asset Management System, our IAM-Endorsed assessment service provides an objective review of your maturity against all the requirements of the ISO 55001 standard. Our recognised expert auditors also provide structured assessments, gap analyses and improvement reviews against all 39 subject areas of the GFMAM ‘Landscape’ for Asset Management (not just the management system elements).
From such an assessment, we offer a uniquely effective process for developing a value-prioritised roadmap to address gaps and exploit improvement opportunities.
Contact us now to find out how we can help your organization achieve ISO 55001 Certification.
The Woodhouse Partnership is distinctively different to conventional ‘consultancy’ service providers.
We do not have ‘juniors’ – only highly experienced subject matter experts, each with over 20 years of personal success in industrial and infrastructure asset management. This means ‘who you see is who you get‘ – direct access to the experts.
We don’t ‘sell’ a pre-conceived, packaged ‘solution’. Every client is different, with a unique combination of existing capabilities, asset portfolio, culture and operating context. So we always provide a way forward that builds upon what is already good, introduce only value-adding elements, create better understanding, integration and alignment. We also always build strong local ‘ownership’ so that the improvements are real and sustained.
Established in 1995, the Woodhouse Partnership has, for over 25 years been at the forefront in developing and implementing best practices in Asset Management. We are trusted advisors to some of the largest organizations in the world, providing support right through to the realization of tangible, validated benefits.
We offer global reach with multi-industry experience, an unrivalled pool of expert consultants and a lengthy catalog of awards and success stories. Most of our assignments come from word-of-mouth recommendations from our many satisfied clients.
With 30 years’ experience in utilities, oil & gas, transport and other sectors, John is one of the most widely known experts in integrated asset management projects for some of the largest companies in the world.
John is a Founder and Life Fellow of the IAM; he has written 4 books, chaired the development of BSI PAS55 and represents the UK on the ISO55000 committee.
He also led the international MACRO and SALVO collaboration projects in optimised asset management decision-making.