Towards AAM

Organizations that seek to responsibly manage their assets may wish to express this by a mission statement or objective similar to this:

“To create, operate, maintain, renew or rehabilitate and replace or dispose of assets in the most cost effective manner to provide the required level of service for present and future generations of customers.”

Effectively managing the implementation of an advanced asset management program includes:

  • Acquiring and implementing computer systems
  • Providing the training needed to alter the culture and the way in which the organization manages its assets.

This should be done in the most cost effective way, balancing identifiable benefits with the necessary resources.

The program is likely to be quite large and complex and will require a significant investment that must be managed cost-effectively. The major role of the asset management team will be to direct, review and monitor the program.

AAM – Implementation Program

The following general program is suggested for municipal and other services authorities. It may need to be modified to suit individual circumstances.

Seek General Advice on Implementation Program

Make the necessary presentations to executive to get the program underway. This generally involves justification of the program and a budget for a needs analysis study. Needs analysis will justify further progress. The program may require executive approval at each stage.

The program will need to remain flexible to meet any problems encountered during implementation.

Determine Necessary Management Structure

  • Set up the Asset Management Team (AMT)
  • Determine its role and responsibilities
  • Determine suitable budget allowances
  • Determine future objectives of program.

Determine Key Outputs Required

Asset Accounting:

Meet accrual accounting outputs:

  • New assets
  • All assets
Technical Management Systems:
  • Asset attributes
  • Asset condition ranking
  • Asset prediction modeling
  • Optimized renewal decision
Resource Management Systems:
  • Human resources
  • Materials management
  • Plant and equipment
  • Contract services
Spatial Data Systems:

GIS digital mapping programs.

Appoint a Consultant to Advise and Assist Executive

This may require a presentation to executive to convey the benefits.

This activity can be moved to a point earlier in the program if desired, or the consultant can review the work completed to this point.

Appoint an Asset Management Coordinator

  • Determine role, responsibilities and structure for accountability
  • Review options of in-house or new appointment.

Undertake a Needs Analysis/Opportunity Evaluation

Depending on the existing status, this may include the following:

  • Information needs of the organization and assets
  • Status of existing information systems and practices
  • Identification of weaknesses.

Development of strategies to overcome weaknesses including:

  • Practices
  • Strategic planning
  • Resource management
  • Maintenance management.

Determine information system strategy including hardware and software.

Determine data capture required:

  • Priority of data collection
  • Sources of data.

Determine resources required for various stages of data capture:

  • Evaluate potential benefits of the proposed information systems and changes in practices
  • Priorities program based on cost benefits

Review available resources and determine program to suit resources and milestone targets.

Make Presentation of Needs Analysis Results

  • AMT or executive panel
  • Work committee.

Adopt Approved Program

  • Acquire software and hardware required
  • Set up detailed implementation program
  • Commence implementation program.

Determine Asset

  • Identification
  • Classification
  • Inventories
  • Attribute details
  • Levels of service.

Complete Training Programs for:

Data collection/Coordinator/Individual asset types, e.g.:

  • Buildings
  • Plant & Equipment
  • Roads
  • Drains
  • Water
  • Sewer
  • Parks and gardens
  • Solid waste
  • Plant and equipment
  • Other assets.

Choose Suitable Pilot Schemes for each Asset Type

Determine suitable programs.

Work with Individual Pilot Schemes

Ensure they meet timetable and key objectives.

Assess Pilot Scheme Outputs

Review actual outputs against targets.

Review Overall Program

  • Review program against pilot outputs
  • Revise program where necessary to meet primary objectives within budget allowances.

Proceed with Final Implementation Program

Monitor Individual Asset Group Programs

  • Ensure adherence to program objectives and budgets
  • Overview and review progress.

Review Completed Initial (Priority 1) Program

  • Determine successes and weaknesses in the program
  • Determine suitable program for secondary stages.

Complete Priority 2 and 3 Data Levels as Required.

AAM – Secondary Implementation Programs

Having completed the initial program, many asset owners then go on to secondary programs to optimize their systems and practices, for example:

Asset Management Plan

Enhanced Maintenance Management

  • Introduce highly planned environment
  • Optimize practices/equipment (FMECA)
  • Analyze maintenance costs (Asset Economics)

Introduce Risk Management Prioritization

  • Consequence of failure
  • Probability of failure
  • Risk cost analysis
  • Prioritize assets at risk (intermediate filter)
  • Decide on sophisticated risk analysis program.

Increase Asset Utilization

  • Load sharing/shedding
  • Demand management
  • Inflow/infiltration reduction.

Complete Critical Asset Identification

  • Use analysis and consequences of failure (risk management) rankings to determine the critical assets for the organization's business activities.

Optimize Condition Monitoring Programs

  • Use asset economics to determine a cost effective condition-monitoring program for each of the organization's asset groups.

Review other A.M. Systems:

  • Auto operating systems (SCADA)/LMCS/TELEMETRY
  • Operations manuals (electronic)
  • Data collection, processing and performance monitoring system
  • Spatial data systems:
    • Digital mapping
    • AutoCAD design integration
    • GIS.

Revise Needs Analysis to Incorporate Digital Mapping System (Spatial Data)

  • Review the requirements and assess direction with regard to digital mapping.

Review Data Outputs and Complete Detailed Analysis

  • Risk assessments and evaluations
  • Optimized renewal decision-making.

Revaluation of Assets

Program Reviewing

  • Reviewing and assessing progress with asset management.

Total Asset Management Plans

  • Complete total strategic plan for each asset group or service type.

Assess and Implement Appropriate "Contracting Out" Program

  • Determine core activities and roles suitable for contracting out
  • Develop agreements between asset owner and service providers
  • Develop contracted specifications
  • Call tenders and evaluate
  • Implement acceptable contracts.

Staff Structures, Skill Requirements for Asset Management Activities


  • Roles and responsibilities
  • Qualifications/experience
  • Skills
  • Staff numbers
  • Training and retraining etc.
  • Fit these into corporate structures.

Identify and Investigate Cost Reduction Opportunities

Identify opportunities and use effective techniques to reduce key cost drivers for organizations:

  • Life cycle cost strategies
  • Causal analysis
  • Activity base cost analysis
  • Optimized renewal decision-making analysis.

Example of Future Advanced Asset Management Program Objectives / Milestones / Output

A workshop determines the following list as key requirements or outputs from the AM Strategy.

Each asset group should consider these and complete detailed planning required to achieve these targets.

  • Identify all existing assets.
    • Macro registers should be completed within six months.
    • Micro (component) asset registers should be completed within twelve months.
  • Value assets at current replacement cost less depreciation.
    • Macro replacement valuations within one month
    • Micro replacement valuations within twelve months.
    • Micro depreciated (written) valuations.
      • Straight line (effective life) within twelve months.
      • Detailed residual value within two years (or earlier if asset data and software allow this).
  • Estimate remaining life of each asset.
    • Theoretical values available within twelve months.
    • Critical assets identified and assessed with actual values available within two years.
  • Estimate required annual maintenance to maximize economic life of each asset.
    • Maintenance to be assessed by benchmarking or current budget history within twelve months.
    • Detailed micro values of justified maintenance for key asset types to be derived within two years.
    • Balance of asset to be completed within three years.
    • Maintenance analysis and optimization to be undertaken progressively as details become available.
  • Estimate amount and timing of cash requirements for replacement or renewal (rehabilitation) of essential existing assets.
    • General picture of replacement totals should be available within twelve months
    • Detailed assessment of these assets requiring renewal or replacement in next 10 years within two years.
  • Estimate amount and timing of cash requirements for new assets. Key factors will be:
    • Assessment of capacity failures of existing assets. (Completed within twelve months).
    • Assessment of new levels of service via customer expectations
    • Regulations.
    • Organization’s directives.
  • This will be dependent on customer satisfaction surveys and the development of Total Asset Strategy Plans.
  • The AAM systems will be able to provide most of the information required within twelve months.
  • Produce computerized budget models incorporating the above cash flow estimates. These will become available progressively with increasing degrees of validity:
    • Macro within twelve months.
    • Micro within two years.
    • Detailed analysis (Optimized Renewal Decision Making) should be available for 10-year program within three years.
  • Assess funding options available for achievement of financial goals. The key issue here will be to determine the most appropriate technical option to suit the organization’s key business objectives. This will require the development of Optimized Renewal Decision Making techniques for each asset that needs to be replaced, renewed (rehabilitated) against the needs (cost-benefit) of new works.
  • Annually update steps (1) to (8) above to reflect dynamic financial environment or the objectives of the organization in respect to service delivery. This will require the review of all asset management policies and procedures from a technical aspect to match the organization’s environment.

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