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Asset Management and Its Alignment with Effective Utility Management

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For an asset management program to be successful, an overall change in thinking, strategy, and process must be embraced across all departments within a utility's organization. Every department and function has a role to play in an asset management program, and must understand their overall impact in order to ensure that the program achieves its stated goals and objectives. Success requires a multidisciplinary approach that includes engineering, operations, maintenance, financial, and business functions. Because asset management is so all-encompassing, it must be aligned with overall efforts toward effective utility management. Essentially, asset management is about “businesslike management of assets", and thus cannot be considered as a standalone program that is purely in the realm of engineers, operators, or maintenance personnel. This is dramatically different than the physical asset focused approach that many utilities have adopted.

This paper will define an approach that successfully integrates and aligns asset management with overall utility management efforts to provide greater assurance that strategies are adopted into practice in a sustainable way. This is critically important to ultimately meeting the needs of the community, regulators, and other stakeholders.

At its core, asset management is not just about condition assessment and rehabilitation programs but encompasses everything a utility does to achieve its service level objectives. This includes its organizational structure, culture, business processes, IT systems, data and information - all the way down to the day-to-day decisions made in the office and in the field. To be successful, asset management and utility management must be linked to and aligned with the overall strategic goals of a utility. This requires a thorough and documented strategic plan, consistently defined service levels, and detailed performance measures that quantify gaps and determine success. All of this can only be achieved with top down executive and management support and an enabling organization structure. This approach provides greater sustainability and helps to ensure that asset management and utility management have a significant impact on bottom line results as well as delivering improved performance of physical assets.

To accomplish this, utilities can start by first creating a mandate for overall change and aligning the organization with clear strategic objectives. In contrast, many utilities end up starting with the “details” of asset management including condition assessments, criticality analysis, data collection, and significant rehabilitation programs without first defining the need for change and its ultimate objective. Some common tactics to help ensure the successful start of an organization-wide asset management and utility management effort include:

Create a high level organizational role


Form a cross functional committees and identify champions


Secure senior level participation and governance


Engage the board from the beginning


Perform an overall “fitness assessment” to determine how best to proceed


Determine what is right for your specific organization


Conduct extensive training and hold workshops


Get buy-in early


Create early wins


This paper will also include highlights of utility best practices and case studies from organizations that have embraced asset management as a whole organization approach – typically starting with strategic planning or organizational improvement programs. Examples and case studies will be drawn from the electric, water, and wastewater utility sectors and will include practices and lessons learned from both public and private sector entities.
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Document Type: Research Article

Publication date: 2006-01-01

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