Asset management: Putting customer service at the center of decision making

The provision of municipal services requires competencies to design, operate and maintain assets in line with the strategic objectives. Such an asset management system and its processes could be defined as the “systematic and co-ordinated activities and practices through which an organisation optimally manages its physical assets, and their associated performance, risks and expenditures over their lifecycle for the purpose of achieving specific levels of service in line with the organizational strategic plan”. Asset management aligns the organisational strategy and the level of service with capital investment planning for asset investment and maintenance to financial planning. It requires the optimisation of total cost of ownership and operation with the objective of delivering service levels to meet customer expectation at defined levels of risk.

Managing these risk in the face of limited resources has long been an implicit component of asset management in the municipal sector yet increasing pressures ranging from financial self-sufficiency to financing constraints have created a climate in which municipalities have to negotiate spending on capital investment and maintenance schemes in light of acceptable levels of risk. Over- or under-engineering facilities with the presumption of screening out all risk or tolerating excessive levels of risk are no longer acceptable for stakeholders. Instead, asset management is becoming an increasingly explicit trade off between cost and risk to achieve an acceptable level of service.

Municipal sector specific asset management models and systems support municipalities that have processes in place to introduce, implement and operate asset management. This system is based on business processes that produce good asset management decisions.

These processes may include:

• setting operational objectives for assets;
• managing data from asset performance and statistical reliability data;
• deriving acceptability criteria for risk and reliability that define ‘system safety’;
• risk assessment and prioritisation for assets
• specification of safety criteria based on risk assessment;
• engineering specification, e.g. technical reliability, materials;
• the design specification for data flow, monitoring and control for human-machine interfaces and machine-machine interfaces;
• the design of operational processes and procedures;
• the design of incident detection and response procedures; and
• the definition of normal and abnormal operating procedures.

An effective asset management system will provide recommendation how and when to:

• operate the existing physical asset better to provide service and to control risk;
• design new assets to maintain or increase levels of service or eliminate, reduce or isolate the risk; and
• maintain the existing assets to upkeep serviceability.

These decisions are usually made dependent on the whole life cost of assets and their tangible benefits such as level of service or serviceability, operational reliability and other benefits defined by the strategic objective of the client organization. 

Monitoring, evaluation and optimization in asset management activities are supported by formal systematic processes. Tools and processes at strategic, policy and tactical level form an integrated framework to proactively and consistently identify and assess risks and select appropriate controls. This places performance and risk identification, assessment and control at the centre of asset management and therefore the availability and quality of asset data at the centre of asset decision making.