Let's pick up from our earlier discussion on Asset Management, to focus on the importance of 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.
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:
- what Value each asset brings or adds to the business
- how each asset mitigates Risk within the business whether it is financial, commercial, reputation, safety, etc
- 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.