A critical mass is building for asset-intensive and public sector companies to conform to the asset management standards spelled out in ISO 55000. Its growing relevance should surprise no one; balancing cost, risk, and performance has been a primary consideration for companies whose bottom line depends on factors related to the entire life cycle of its assets. Widespread ISO 55000 recognition marks a turning point wherein organizations now acutely understand that optimized asset performance is more than maintaining assets at peak performance levels; rather, it is about balancing cost, risk, and asset performance and ensuring that asset strategy is intricately tied to and consistent with the company’s overarching objectives.
Adopting a comprehensive asset management planning strategy that is tied to business objectives yields a host of benefits, including minimized risk exposure and better service levels to citizens. Consider, for example, a municipality that repairs a deteriorated roadway. If, two months later, the sewer department comes in to replace a manhole chamber as part of maintenance, the city must open the road again, thus missing an opportunity to tackle the projects simultaneously. Had this municipality had a better understanding of asset condition, potential alignment of activities over time, and the impact of those activities on the business, it could have timed simultaneous corrective action to mitigate both risks, optimize spend, and lessen the disruption to its citizens.
Aligning Risk and Asset Management
Risk mitigation and spend optimization represent the new paradigm of asset management. Achieving these objectives aligns with corporate objectives concerning cost, added transparency and traceability for auditors and regulators, and adherence to International Financial Reporting Standards (IFRS) and other accounting standards. Historically, disparate systems and siloed departments prevented asset-intensive companies from developing a cohesive, holistic asset management line of sight and strategy. The finance function was set apart from various processes including operations and maintenance, capital planning, reliability, and so on.
By intersecting various work processes around optimized asset performance, companies can engineer the appropriate level of reliability, structure their risk mitigation activities, and measure risk exposure as it pertains to every decision concerning a portfolio of assets. Many SAP customers have taken steps to integrate asset business processes within SAP Enterprise Asset Management; a more comprehensive adherence to the strategic principles of asset management entails complementing this solution with one that aggregates data from all asset systems, augments it within the context of a long-range planning tool, and offers bi-directional data flow for visibility into countless future scenarios.
Complementing systems of record with such a tool is the premise behind PowerPlan’s Asset Investment Planning and Management Suite, which serves to bridge the gap between engineering and finance by enabling strategic and optimal asset investment decisions. By offering bi-directional data flow with SAP systems, the solution enables the finance department to study changes in risk against initial assumptions and use dynamic scenario analysis to model future investments. It simultaneously provides operations with a blueprint for optimal technical management of the entire asset landscape.
Manage Assets, Cost, and Risk as a Long-Term Business Strategy
ISO 55000 significance is gaining steam for public sector, utilities, and other asset-intensive companies as a way to gain visibility into their asset futures, and internal and external stakeholders are provided with newfound levels of transparency and defensibility. It is crucial to strategically manage assets as part of a long-term investment planning framework. An asset-intensive company should have visibility of risk or service level and its impact on long-term projects and planning. With a comprehensive view of asset health, organizations have the information and control needed to align corporate goals with the overall business strategy.
Visit http://powerplan.com/solutions/asset-management-planning-suite for more on PowerPlan’s solution.