Aligning Asset Management Strategy with your Organisational Strategy

One of the most complex challenges that organisations face is driving strategic change within the organisation, and most notably from an Asset Management perspective, ensuring that the asset management strategy aligns with the organisational strategy.

You achieve alignment by:

1. Understanding the Value proposition
2. Creating Asset Management Objectives
3. Planning to achieve your Asset Management Objectives
4. Integrated Planning

Let’s explore how to achieve alignment to ultimately derive maximum value from your assets.

The benefits of alignment

The ISO 55001 standard specifies the key requirements that should be in place for an organisation to have:

• clearly articulated AM objectives that are aligned with organisational objectives,
• good quality SAMP and AMPs that will assist the organisation to achieve its organisational and AM objectives, and
• an AM planning process that is integrated with the organisation’s other planning processes.

You do not have to be certified against the ISO standard to gain benefits, but you need to be aligned with the requirements of the standard to a level that is relevant to your organisation. The ISO 55001 standard is all about having robust aligned and integrated processes to manage your assets in a coordinated fashion.

ISO 55000 lists some potential benefits of applying Asset Management as shown below.

The benefits stated above can only be achieved through focused and aligned asset management as an integrated, cross-functional, continually improving approach to delivering value from your assets. As an organisation you need to be clear on which of the benefits you are aiming for since it is unrealistic to expect that you will achieve all the listed potential benefits. The benefits you are striving for also inform the value you are trying to derive from your assets, as well as what your Asset Management Objects would be.

How do you achieve alignment?

1 – Understanding the Value proposition

Everyone familiar with ISO 55000 will know that Asset Management is defined as the “Coordinated activity of an organisation to realise value from assets”. So how do you define this value?

To better understand the value, you are trying to derive from your assets you need to answer a few basic questions:

• Firstly, what do your organisation value? Is it focused on performance, cost, or risk? For example, higher profit / lower costs / sustainable performance.
• Next, you need to define what the consistent and aligned organisational value requirements will be at the different levels in the organisation.

The target you are aiming for is the Value you want from your assets with due consideration of the consistent and aligned organisational balance of the cost, risk, and benefit trade-offs over time.

There is an optimum balance between these three things, and it is unique to each organisation depending on local factors such as, market share, maturity, risk aversity or appetite to name a few.

2 – Creating Asset Management Objectives

ISO 55000 defines that Objectives are “results to be achieved”.  The AM objectives you develop must be linked to Value and be supporting your organisational strategy.

You can only derive the value from your assets if you have alignment across the organisation on your asset management objectives.

Your higher-level strategic AM objectives should be aligned with your organisational objectives, which also mean that your detailed asset management objectives, should be aligned with your strategic asset management objectives.

If there is misalignment between your organisational and asset management objectives, you are effectively wasting money on actions that do not add value to the organisation.

Your asset management objectives should be SMART to effectively drive alignment. From experience most organisations struggle in defining SMART objectives. In most cases the objectives are too generic, often conflicting, or just simply unclear. And, in many cases objectives and associated KPIs are non-existent.

When developing your Asset Management objectives, you need to understand the organisational asset management capabilities and maturity, as well as the criticality of your assets in terms of their impact on the achievement of the organizational objectives.

You also need to consider objectives at the asset level, as appropriate. Other items to consider include:

• Asset performance, capacity, and condition,
• Whole life cost and budget compliance, and
• Environmental Impact and Sustainability, to name just a few.

You further need to consider objectives relevant to all key stakeholders including your customers.

The more specific your AM objectives are the more likely value will be achieved.

3 – Planning to achieve your AM Objectives

Now that you have SMART objectives defined, you need to have clear plans in place for achieving these objectives.

You should develop Strategic Asset Management Plans (SAMPs) and Asset Management Plans (AMPs) that are aligned with the organisation’s objectives and are closely linked to the organisation’s strategic plan. This forms part of the coordinated activity of the organisation to realise value from your assets.

You develop your SAMP by focusing on the organisational objectives, this then cascades down to your AM objectives and detailed objectives, which you compare with the forecasted performance based on asset condition etc. to identify performance gaps. You then identify the actions to bridge those gaps. 

By doing this you can ensure that your planned asset management actions are aligned with the achievement of organisational objectives, which is one of the key selling points for a systematic approach to asset management when talking to senior management. 

4 – Integrated Planning

Of course, you don’t always get what you want, perhaps this is due to budget constraints, so optimising and integrating your AM Plans are a bit of a cyclical process, but at some point, the plan gets locked in, and the outputs are then fed into budgets, project plans, risk management plans etc. 

So, the timing is critical. Your AM Plans need to be finalised just prior to the finalisation of budgets and other organisational plans. 

These plans further do not just relate to the maintenance you perform but looks at all the elements related to how you manage your assets. Elements such as information management, people, competencies and skills, performance measurement and other decision-making processes.

In other words, AM Planning is not a standalone activity, and this helps with alignment to the Organisational strategy. And if it is seen by senior management as being an essential part of the business planning process then it helps win them over.

Conclusion

This article is an adaptation of a presentation I delivered at the 2023 Mainstream Conference to show the benefit of ensuring that an organisations organisational and asset management strategies are aligned to deliver the value organisations expect from their assets. We provide a wide range of asset management services focused on helping organisations achieve alignment.