ISO 55000 - Asset Management Standards Series

This installment in the Foundational Thinking miniseries introduces the ISO 55000 asset management standards series.?In this miniseries chronology we have finally arrived at this foundational asset management cornerstone.?The ISO 55000 standards series did not just appear.?They were developed as a collaborative, world-wide response for organizations to better manage assets and improve performance.

This newsletter will not detail the contents of ISO 55000 standards.?It will just introduce the standards and provide context and insights on how to understand and apply them.?To start, the ISO 55000 series currently includes four published standards and has three new standards in draft. ?All but ISO 55002 are being worked on at this time summing to a total of six standards that will be released in 2024.? This ISO 55000 asset management standards series includes:

• ISO 55000, Asset Management – Overview, Principles, and Terminology:?This standard describes asset management as a coordinated activity of an organization to realize value from assets and it establishes context to implement an asset management system.?The scope of information covered in this standard is asset management principles, terminology, benefits, maturity, and key concepts such as the relationship of key terms, that is, the relationship between assets, asset management, and an asset management system.
• ISO 55001, Asset Management – Asset Management System – Requirements:?This standard specifies requirements for the establishment, implementation, and improvement of a management system for asset management, otherwise referred to as an “asset management system”.?These requirements apply to asset management systems covering both tangible and intangible asset types and are universally applicable for large and small, and public and private organizations.
• ISO 55002, Asset Management – Management Systems – Guidelines for the Application of ISO 55001:?This standard provides guidance for the application of a management system for asset management in accordance with the requirements of ISO 55001:2014.?This standard will be updated after the publication of ISO 55001:2024.
• ISO 55010 – Asset Management – Guidance on the Alignment of Financial and Non-Financial Functions in Asset Management:?This technical standard provides guidance on the alignment between financial and non-financial asset management functions to improve internal controls coordinated through the organization’s asset management system.
• ISO 55011 – Asset Management – Guidance for Development of Public Policy to Enable Asset Management: ?This standard provides guidance on how to advance adoption of asset management through public policy.?This guidance is written to introduce and promote use of ISO 55000, ISO 55001, and ISO 55002 for all levels of government.
• ISO 55012 – Asset Management – Guidelines for Enhancing People Involvement and Competence:?This standard provides guidance on how to improve and enhance the involvement and competence of people in the organization who are responsible for and who perform asset management functions in the context of an asset management system.
• ISO 55013 – Asset Management – Guidance on Data for Asset Management:?This standard provides guidelines for the management of data when applying asset management principles and asset management system requirements.

An overview of pending updates to each one is covered in an earlier newsletter that summarized ISO TC 251 plenary session held in Philadelphia, Pennsylvania, USA the week of May 8, 2023 (link to this newsletter found at the bottom).?

These standards were developed and are maintained by ISO Technical Committee (TC) 251 – Asset Management.?The development and maintenance of these standards is governed by two important ISO Directives.?They are:

• ISO/IEC Directives, Part 1 – Procedures for the Technical Work – Consolidated ISO Supplement – Procedures Specific to ISO
• ISO/IEC Directives, Part 2 – Principles and Rules for the Structure and Drafting of ISO and IEC Documents

The ISO TC 251 determines what will be covered in the ISO 55000 standards series and these Directives define how it is to be documented and communicated as a written standard. ?All of this occurs under ISO governance that provides additional controls and procedures to ensure ISO standards and products support its mission, which is:

“Through our members and their stakeholders, we bring people together to agree on International Standards that respond to global challenges.?ISO standards support global trade, drive inclusive and equitable economic growth, advance innovation, and promote health and safety to achieve a sustainable future.”

The ISO 55000 standards series is part of a subcategory of standards. ?This is the management system standards subcategory that define a way for organizations to manage “interrelated parts of its business in order to achieve its objectives.?These objectives can relate to a number of different topics, including product or service quality, operational efficiency, environmental performance, health and safety in the workplace and many more.”

Management system standards are an ISO innovation.?Over 120 ISO management system standards have been published and many more are in development.? There are two types of management system standards.?A “Type A” management system standard can be used for an organization to claim conformance, whereas a “Type B” provides management system guidance related to a “Type A” standard.??

Organizations can demonstrate conformance with a “Type A” standard through 1st, 2nd, and 3rd party audits.? A 1st party audit is self-performed, often as part of common management performance improvement activities.? A 2nd party audit is when an organization hires external expertise to support a dedicated improvement initiative.? A 3rd party audit involves acquiring services from an organization licensed to certify conformance with a specific “Type A” standard.? A 3rd party audit may result in an organization gaining certification with the designated “Type A” ISO management system standard, such as being ISO 55001 Certified.

All ISO “Type A” management system standards conform to strict requirements detailed in ISO/IEC Directives Part 1, Annex SL – Harmonized Approach for Management System Standards.?This approach leads to the application of a harmonized level structure or HLS to organize the standard.? What this means is the core elements of every “Type A” management system requirement standard uses the same structure / table of contents. This leads to about 60% of the words in every ISO “Type A” management system standard being identical.?This is important because it promotes coordination and integration of multiple management systems. ?ISO even has a handbook on how to facilitate this titled: Integrated Use of Management System Standards (IUMSS). ?

For many, including myself, this harmonized level structure and governance first appeared cryptic and complex.?With practice and understanding most will realize that it provides a streamlined, scalable means to improve an organization’s overall performance using a universal system-of-systems strategy.? An analogy I have found helpful is management system standards are like breaks on cars, they help you go faster - meaning management system standards provide controls and safeguards organizations can use to improve overall performance.

Most management system “Type A” standards end with the XX001, which makes ISO 55001 the “Type A” requirements standard for the ISO 55000 asset management standards series.?Management system requirements standards do not explain how the management system works or how to implement the management system.?These topics are better covered in industry-based guidance, such as provided by professional associations that support specific markets or industries.

It is also important to recognize that complementary “Type B” standards are limited to establishing context and providing guidance related to the "Type A" standard it supports as detailed in its Purpose and Scope sections. "Type B" standards also do not explain "how to" operate a management system. Instead, they provide guidance on "how to" apply "Type A" management system requirements. This may disappointed readers until they realize that they and their organization are best equipped to address specific issues related to the organization, and that the ISO management system standards are only meant to develop competencies important to managing risk and improving performance.

What management system “Type A” requirements standards do is they detail the features, attributes, and behaviors that must be demonstrated to pass a conformance audit. Passing a conformance audit signifies that an organization has a robust and stable approach to achieving desired performance outcomes covered by the management system. For ISO 55000, that is the realization of value from and through assets to achieve the organization's objectives and fulfil its purpose.?

In a "Type A" management system standard these features, attributes, and behaviors are called out with “shall” statements.?It is likewise important to note that you will never find a “shall” statement in a “Type B” standard.? Adherence and conformance with ISO 55001 “shall” statements is intended to lead an organization through a continual improvement process that will mature its asset management capabilities.

Development of ISO standards involves a rigorous and technical process.?This is covered in detail in the ISO Directives. As foundation for this, ISO/IEC Directives Part 2 states that terms and definitions in ISO standards are “normative”, which means when used they become a technical term and are to be applied as defined. ?The following additional ISO standards provide important insights on the development and use of terms:

• ISO 704 – Terminology Work – Principles and Methods
• ISO 860 – Terminology Work – Harmonization of Concepts and Terms

These guidance standards explain how information in ISO standards is developed, communicated, and used.?Key terminological elements include:

• Objects – objects are something that is perceived or conceived.?Objects in terminology provide meaning, focus, and context for the establishment of terms and definitions.
• Terms – terms are stipulative (for a specific meaning or purpose) or ostensive (meaning conferred through context or examples).?Terms establish the technical language used to understand the meaning and intention of the standard.
• Concepts – concepts are developed by relating terms and objects.?Assembly of objects used to interconnect terms leads to “units of knowledge” called concepts.?Definition and application of concepts in standards forms the basis for communications and understanding.
• Harmonization – this concept anticipates that language will be different and be used differently in different contexts.?Therefore, application of every ISO standard must be translated and tailored to the organization's context while preserving the meaning and intention behind the terms and concepts communicated in the standard.

Professionals that apply ISO standards need not become experts in terminology, but will benefit from understanding that ISO standards use technical language. Specifically, when a term is defined in a standard it needs to be understood that this is done purposefully to establish important concepts. ?Important current and forthcoming ISO 55000 concepts are as follows:

• Purpose of Asset Management – asset management is the coordinated activity of an organization to realize value from and through assets.
• Scope of Asset Management – the scope of asset management includes:
• o??Numeration and qualification of the organization’s desired outcomes,
• o??Asset management principles established by the organization;
• o??Application of asset management system requirements to implement and continually improve policy, objectives, and processes to achieve these objectives; and
• o??Defining the relationships between the asset management system and the organization's other management systems,
• Asset Management Principles: value, alignment, integration, leadership, adaptability, sustainability, and governance (assurance).
• An Asset Management System is a part of a System-of-Systems
• Relationship of Key Terms: asset, asset portfolio, asset management, and the asset management system
• Asset Management is a Journey, not a Destination – this journey involves continual application and improvement of asset management to achieve the organization’s objectives and fulfill its purpose.

A few additional points that are important for users of ISO management system standards to understand are:

• Purpose:?Each standard has a purpose statement that sets context for its application.?Each standard in the ISO 55000 series does not state how asset management is to be implemented at an organization.?ISO 55000 standards focus on setting the context to employ asset management and the role of an asset management system.?This means it is the responsibility of every organization to define how to apply and implement asset management to improve its performance. This is the starting point of each organization's asset management journey.
• Scope:?The scope of each standard defines the subject of the standard, its objectives, and limitations.?Scope statements for standards in the ISO 55000 series focus on the coordination of management activities related to the management of assets.?These scope statements do not state what the organization's objectives are or need to be - that is an organizational responsibly and not the job of the standards.
• Normative References:?Each standard cites normative references.?When a source is cited as a normative reference it means that the source applies in full as if it were written directly into the standard.?There are no normative references listed for ISO 55000, which means it is an apex source.?The only normative reference listed for all other standards in the ISO 55000 series (listed above) is ISO 55000 with one exception ISO 55013.?What this means is ISO 55000 sets the context for implementation of ISO 55001, which defines requirements for an asset management system.? This means understanding ISO 55000 guidance and context is essential to understanding how to implement ISO 55001 and the other standards. The other ISO 55000 standards in the series, with one exception, likewise cite ISO 55000 as its only normative reference. This reinforces the important role ISO 55000 has in setting the context to apply ISO 55001. ?ISO 55013’s exception is it lists both ISO 55000 and ISO 55001 as normative references.?ISO 55001 is listed as a normative reference in ISO 55013 due to its explicit alignment with ISO 55001 requirements.

In summary, the ISO 55000 Asset Management standards series define the only complete definition of an asset management system for an organization that is supported by international consensus.?It was developed in response to decades of recognized gaps and limitations in industry best practices from across the globe.?This Foundational Thinking newsletter miniseries only highlights one part of this story.? As an interesting footnote, ISO 55000 standards have always been a vanguard of ISO management system thinking.? The reasoning for this is, ISO 55001 was the first management system standard published using ISO’s harmonized level structure (HLS), setting many precedents, and likewise will be one of the first to be revised under this evolving methodology.?

The ISO 55000 standards series was born from and integrated many best practices, notably the British Standards Institution (BSI) – Publicly Available Specification (PAS) – 55:?Specification for the Optimized Management of Physical Assets that was first published in 2004 and covered in an earlier newsletter.?Since that time, ISO 55000 has taken on a life of its own that encompasses both tangible and intangible assets.?It was first published in 2014, and right now is going through a major revision with six new or updated standards to be published in 2024. This will include updates to its flagship ISO 55000 and ISO 55001 standards.? And, the most exciting outcome to all of this is the simple objective this seeks to achieve – that is, to help organizations improve performance through streamlined coordination of management activities.

Written by: James J. Dempsey | July 18, 2023

#assetleadership #assetmanagement #investmentstrategy #riskmanagement #enterpriseriskmanagement #iso55000 #iso55001 #facilitymanagement

Helpful Links:

ISO TC 251 Philadelphia Plenary Synopsis - https://www.dhirubhai.net/pulse/iso-tc-251-asset-management-plenary-session-jack-dempsey/

ISO Strategy & Mission - https://www.iso.org/publication/PUB100364.html ?

ISO Management System Standards – https://www.iso.org/management-system-standards.html

ISO 55000:2014 / ISO/DSI 55000:2023- Asset management — Overview, principles and terminology https://committee.iso.org/sites/tc251/home/projects/published/iso-55000.html

ISO 55001:2014 / ISO/DSI 55001:2023 - Asset management — Management systems — Requirements https://committee.iso.org/sites/tc251/home/projects/published/iso-55001.html

ISO 55002: 2018 - Asset Management - Management Systems - Guidelines for the Application of ISO 55001:2014

https://committee.iso.org/sites/tc251/home/projects/published/iso-55002.html

ISO/TS 55010:2019 / ISO/DSI 55010:2023- Asset management — Guidance on the alignment of financial and non-financial functions in asset management

https://committee.iso.org/sites/tc251/home/projects/published/isots-55010.html

ISO/DIS 55011:2024 - Guidance for development and application of public policy to enable asset management

https://committee.iso.org/sites/tc251/home/projects/ongoing/iso-55011.html

ISO/DIS 55012:2024 - Asset management — Guidelines on people involvement and competence

https://committee.iso.org/sites/tc251/home/projects/ongoing/iso-55012.html

ISO/DIS 55013:2024 - Asset management - Guidance on data for asset management

https://committee.iso.org/sites/tc251/home/projects/ongoing/iso-55013.html

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