Asset Management

Utilities across the United States are all experiencing the same challenge: aging/deteriorating infrastructure and limited budgets. Asset management is a means to help utilities make informed investment decisions, extend the useful life of existing assets, and optimize use of available funds.

Asset management is not new. Every company uses systems and processes to manage their assets since they were acquired. Asset management is a way of thinking, of seeing the infrastructure world from an asset-centered view as opposed to one that is operation-centered, and it depends on the entire organization. It allows utilities to direct limited resources where they are most needed and is the basis for both short- and long-term investment planning, setting rates, and “telling their story.” Your customers need to understand what you do, and that what you do has value; they must also accept as true that the way you do your work is competent, if not exceptional. An asset management program can do just that.

With asset management, utilities are able to:
• revise maintenance strategies that align with current asset condition and failure risk,
• proactively replace and maintain assets,
• limit reactive activities to primarily those assets that can tolerate the risk of unplanned failure (e.g., difficult-to-assess pipes with low consequence of failure),
• provide more accurate budgetary forecasts associated with asset maintenance and replacement, and
• assist in the systematic development of rational and reproducible methods to justify investment costs in a utility environment—capital, operations, maintenance, and administration.

Asset management practices make every dollar work as hard as possible. Approximately 20% of asset cost goes into construction, while 80% of the cost is in operation and maintenance. When considering asset life-cycle costs, it is sensible to consider new tools and processes to manage assets more efficiently. Implementation of asset management frameworks and practices should be given priority over other activities, especially during challenging economic times, because this ensures best value decisions are made on a consistent and systematic basis.

In short, asset management is about improved decision-making.