Top 5 reasons you need to revisit asset management

Assets underpin the profitability of business, the liveability of communities and the sustainability of our society—they are critical, but not simple to manage.

Leaders in local government and other asset intensive industries have always dealt with complexity, but meeting expectations for reliable service quality in a rapidly changing operating environment will require smarter more strategic decisions.

Here are five factors driving the need for more robust ways to predict and manage asset performance:

1. Variability and risk will probably get worse

Climate change means assets are increasingly being affected by unpredictable and extreme conditions. Yet users still expect uninterrupted supply and access at affordable prices.

Extreme heat recently caused power outages that affected residents in Melbourne and regional Victoria. Not only did infrastructure maintenance come under scrutiny, but calls were also made for electricity providers to compensate out-of-pocket residents.

Assets also need to support a growing, ageing population that’s more concentrated in cities. Changing communities will place unanticipated pressures on sewerage systems, roads and power grids built for another time. Denser urban areas raise the risk and likelihood that asset failures will threaten the environment or public safety too.

2. Public scrutiny will only increase

Asset management attracts public and media attention, and it’s only getting more frantic given the 24-hour news cycle and reach of social media.

When the air-conditioning on some Brisbane trains faltered on a scorching day, commuters took to Facebook to share their frustration and lobby a response.

When a Sydney train recently crashed into a barrier, injuring several passengers—a decision to delay an upgrade to the trains’ safety systems became front-page news.

The potential results of poor press are far-reaching: decreased customer trust and engagement, tarnished reputations, ruined careers, being made a political scapegoat, increased regulation, and financial loss.

3. Economic growth relies on asset availability

Steady power supply, quality roads and ports, and public transport connectivity influence the economy: from small businesses through to major development and export opportunities.

In 2017 the Western Australian government faced the potential loss of significant tourism dollars because its port infrastructure was deemed not ‘up to scratch’ by a major cruise ship operator.

The ‘liveability’ of cities has become an economic imperative. People want to live, work and start businesses in well-serviced, connected communities—the responsibility for delivering this will increasingly lie with asset managers.

4. Digital revolution = new business models

Technology is disrupting business. It’s expected that more than half of mining jobs will be replaced by robots, with most workers retrained to control and maintain the robots.

Progressive councils are creating ‘smart cities’ with embedded technology that enables real-time monitoring. Australia’s airport industry launched a research program in recognition that new technologies are needed to maximise runway lifespans.

Mobile phone usage has skyrocketed— research by Gartner shows that 88 per cent of Australians now own a smartphone.

The ubiquity of smartphones dovetails with employees’ desire to work more flexibly. Mobile devices also boost productivity: it’s no longer efficient or practical to be tied to a desk all day.

Shifting expectations about where and when work happens means organisations need to rethink the way they support a digitally-savvy, mobile workforce—especially organisations that manage geographically dispersed assets or teams.

5. Doing ‘more with less’ relies on data

As the demand for quality services grows, budgets are becoming stretched. Every decision about how much and when to invest in your assets needs to be justified.

That requires comprehensive data from both across your organisation and external sources: without all the pieces, leaders can’t gain a complete picture.

Yet many organisations still suffer from silos—multiple departments using different systems to manage relevant information about assets. Being able to predict, plan and be proactive accurately requires a holistic view.

International standards like ISO 55000 endorse a whole-of-organisation approach to managing assets. International standards advocate an integrated approach to processes and recommend consolidating business information including Finance, Human Resources, Logistics and Operations to optimise performance and minimise cost.

See the big picture

It’s clear that leaders in asset intensive industries are facing a more volatile future, and asset management is under the microscope.

Avoid poor or delayed decisions, service failures and mounting costs by revisiting your approach to asset management now.

Publish date

13 Nov 2020

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