Fundamentals of Asset Management - 10

Fundamentals of Asset Management - continuation

12.0 Asset management objectives

12.1 The need of asset management objective is clearly stated in PAS 55-1 from the Institute of Asset Management, United Kingdom and the statement is shown below:

“The organization shall establish and maintain documented asset management objectives at relevant function and level within the organization. The objectives shall derived from and consistent with the asset management strategy.”

12.2 It is very clear that emphasis is on a single asset management objective throughout the organization and the organization shall disseminate or establish asset management objectives to all staff at various levels in the organization. No single unit/sections in an organization shall have an objective deviating from the main objectives. This is necessary if any asset management policies, strategies or operational tasks need effective executions.

12.3 In realizing the asset management objectives, the organization shall consider:

a. Legal, regulatory and statutory requirements
b. Technological advancements
c. Financial, operational and business requirements
d. Related risk in asset management
e. Views for appropriate stakeholders

12.4 The above requirements are important so that the objectives developed are always relevant and in the context of the organizational business environment. In this respect, every activity and data gathering will be streamlined throughout the organization resulting in a shared vision, improved and effective information and decision-making. As such, the organization shall be able to meet service delivery objectives efficiently and effectively.

12.5 As a result, the organization would be able to plan, formulate and implement strategies and, lastly measure its performance. It is also important that a communication plan be established so that the objectives can be communicated effectively to its stakeholder, customers, users, key suppliers and so forth ensuring formulating of a set of reasonable objectives and successful delivery of service.

Fundamentals of Asset Management - 4

Asset Management Fundamentals - continuation

5.0 Roles and responsibility

5.1 In any management system, role and responsibility is important and given due recognition as one of the leading factor of a successful management system. Hence, the key success factor is always the clarity of role and responsibility in an organization. Without this clarification, everyone in an organization will assume a role but will not assume the responsibility. In such case, we have organization full of people but none is doing tasks or activities towards the organization’s objectives.

5.2 In asset management, the organization must know:

a. What is the role and responsibility of each person or unit sections;
b. Why the role and responsibility is formulated in such a way;
c. When to execute the role and responsibility;
d. Who is the custodian of the assets;
e. Who is responsible for the operation and maintenance of the asset;
f. How to execute the role and responsibility;

5.3 Once the organization has established the roles and responsibilities in the organization, the role and responsibility must be properly documented and maintained. As mentioned earlier, the role and responsibility in an asset management system is utmost important, as it will determine the successful implementation of an asset management system.

5.4 Even though it is not a necessity to create a new unit, but an asset management team must be in place either using an existing manpower or outsourcing the expertise. The asset management team will necessitate qnd implement an asset management system in the organization with emphasis on review, coordinating and monitoring asset management activities.

5.5 At the end of the day, the organization will be accountable if the asset fails to deliver the desired or the expected service delivery.


6.0 Asset objectives

6.1 It is a norm that an asset acquisition’s proposal must be accompanied with reasons and objectives of acquisition or creation. One does not build, acquire or construct an asset without any justifiable reasons or objectives unless the organization has surplus funds, which the organization does not know what to do with it. An asset will become a liability if it ceases to function and perform its primary objective. Therefore, it is necessary that an objective(s) be attached to an asset.

6.2 Clearly, all assets must have a defined objective(s). By having an objective, the asset is created with a purpose. With this objective, service criteria for the asset can be created and the asset performance can be measured and monitored. Typical assets’ objectives are:

Fig. 6.2: Typical asset objectives

6.3 At the initiation and acquisition stage, the asset’s objectives are in general adequate and justifiable. If the users’ expectations on the service provided change during the asset operational life, then the objectives of the asset must be renewed or modified to reflect the change. Cases such as this would entail a modification, a renewal or even an upgrade of the existing asset(s). There are other factors that affect the current asset’s objective such as obsolescence, technology changes, environmental changes and lastly, legislative changes. If these factors do affect the existing asset, modifications to the existing assets must be made to ensure that the asset continue to provide the necessary service and not becoming a liability.

6.4 By having assets’ objectives, the service criteria and the service levels can be determined. With these service levels, the organization can informed the public, determine the assessment rates need to be paid by the taxpayers, the budget needed to maintain the service levels and so forth. This action creates transparency and justifiable measures to the customers and the organization as a whole.