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Placing Asset Management in Context for your Business

When establishing or reviewing an asset management system, it is important to ensure that its design, scope and implementation are consistent and aligned with the external and internal context of your organisation, ie: what is relevant for your business, what are the external and internal factors that impact the criticality/operations of your business.

Let's pick up from our earlier discussion on Asset Management, to focus on the importance of Context. 

External context

Understanding your organisation's external context needs to consider, among other things:

  • the social and cultural, political, legal, regulatory, financial, technological, economic, competitive and natural environment factors whether international, national, regional or local,
  • key drivers and trends in factors that are identified as potentially having an impact on the objectives of your organisation, and
  • the relationships with, and perceptions and values of, external stakeholders and interested parties.

Internal context

Understanding your organisation's internal context needs to take into account:

  • governance requirements
  • policies and objectives, together with the strategies in place to achieve them
  • your organisation's culture and values
  • organisational structure, roles, accountabilities and authorities
  • the size and complexity of your organisation
  • capabilities from a resources and knowledge perspective (eg:  capital, time, people, systems and technologies)
  • information systems, information flows and decision-making processes (both formal and informal)
  • standards, guidelines and models adopted by your organisation
  • relationships with, and perceptions and values of internal stakeholders
  • the form and extent of contractual relationships
  • your organisation's risk management plans including tolerance limits, capacity and attitude towards risk.

The three pillars of Asset Management

Ultimately the internal context revolves around your organisation’s culture and leadership. The contextual question needs to answer and confirm that your entire organization understands and commits to the three pillars of asset management, ie: Value, Risk and Revenue.

Does your organization understand:

  1. what Value each asset brings or adds to the business
  2. how each asset mitigates Risk within the business whether it is financial, commercial, reputation, safety, etc
  3. what Revenue does the asset generate or save.

When assessing the internal context against these three pillars, it’s essential that all the internal stakeholders share an understanding of and commitment to the concept of asset management.

Asset Management context

How to assess external and internal impacts on the business

At the strategic level, tools such as Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis and Political, Economic, Social, Technological, Legal, Environmental (PESTLE) analysis may be used for identification and evaluation of contextual issues. A simpler approach, such as brainstorming, can also be productive depending on the size of your organisation.

Ultimately a little common sense about the business and the industry in which it operates, the criticality of various operations, and the impacts that assets have on the operations, should drive the overall need for a reasonably detailed asset management framework.

What does all this mean in relation to the application of the ISO Standard and achieving compliance with the standard? A few key things to consider:

  • What types of asset assist in making the business function and how critical are they? ie: Without these items, could your business function? For example, if you’re a logistics business, then the trucks that generate revenue for you are critical. If you are the Tax Office, then data storage and the client portal will be critical to your business.
  • Is the business subject to a level of regulation? External requirements, such as customer service levels and safety regulations, drive a level of policies and procedures to secure reliability. For example, power poles would be subject to safety and other regulations to ensure a level of reliability of service.
  • Safety! If the assets interact with staff and external third parties then the assets require a level of asset management. For example, a man-hole covering on the street will need a level of asset management to ensure it sits flush with the pavement, is not broken etc.

So, there is much to consider when establishing the parameters for your organisation’s asset management system. Fortunately, in many circumstances such a detailed analysis brings clarity and alignment to the whole organisation and can deliver broader benefits.

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