ISO AM STANDARDS AND NAMS RESOURCES WORKING TOGETHER

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1 ISO AM STANDARDS AND NAMS RESOURCES WORKING TOGETHER Peter Way PSM - Director NAMS Council - IPWEA peter.way@ipwea.org Abstract IPWEA has been involved in developing the ISO Asset Management Standards over the last 7 years, for the benefits the Standards can bring to organizations, through a management systems approach. Engineering management is well attuned to applying a systems philosophy but the real benefits accrue when the whole organization embraces these principles. The leadership and commitment required from top management under the Standards all lead to a greater collaboration and alignment in meeting corporate objectives across the whole organization. This is done by maximizing value from how the assets are employed to deliver services by balancing risk, cost and performance. IPWEA s many Guidelines and Manuals like the IIMM, AIFMM, NAMS.PLUS provide the necessary How to guidance on applying the What needs to be done as stated in the Standards. Other resources such as the maturity assessment frameworks help management to test the alignment of the organisation s practices against the Standards requirements. In this way, priorities can be established that focus on improvements needed to close the gaps between current and desirable practices. These are a great way to plan for a sustainable future. This Paper explores the many benefits that can be realized by any organization, applying the ISO AM systems approach and how best to utilise the many IPWEA resources to implement appropriate alignment with these Standards to achieve those benefits. The paper highlights the latest developments in the Standards. Key Words: ISO Asset Management Standards, NAMS Resources, AM Improvement. Introduction It s fair to say that interest in the ISO Asset Management Standards is growing within organizations managing infrastructure, for the benefits the Standards can bring through a management systems approach. This is because the Standards promote a focus on maximizing value from how the assets are employed to deliver services by balancing risk, cost and performance. Whilst some are looking to the Standards and seeking certification of conformance as a means of assuring stakeholders that they are applying good practice, the majority are exploring the Standards for the benefits they can see in helping drive better business practices across the organization. This Paper explores the current status of the Standards, enhancements that are in the pipeline and the many benefits that can be realized by any organization, applying the ISO AM systems approach. The Paper also explains how best to utilise the many IPWEA resources to assist in applying these Standards to achieve those benefits.

2 State of the ISO Standards Current Status The ISO Asset Management standards were published in 2014, so with three years of application in various sectors and across the world, we re starting to see a need for some enhancements evolving. Technical Committee - TC 251 was established in 2015 and has now met four times, most recently in Brisbane, to work on a number of improvements. The most significant of these has been a major revision and rewrite of ISO 55002, the guidance part of the standards. Following a ballot in 2015, it was resolved to leave and unchanged at this point in time, but focus on revision of There has been significant work done on this and a new version is expected to be ready for release later this year. As well as a number of changes throughout the current text of 55002, there have been a number of new annexes prepared to better explain the ISO approach on some key topics. These include: Annex A - The Strategic Asset Management Plan (SAMP) Annex B - Scope of an asset management system Annex C - Comments on Value Annex D - Asset Management Decision Making Annex E - Relationship between financial and non-financial functions Annex F - Risk management Annex G Scalability Annex H - Information on asset management activities Annex I - Relationship between key elements of an asset management system With development of these annexes there has been much debate on some topics such as value and what it means to different professionals working in asset management. ISO has strongly promoted the concept of assets only being relevant for the value they can provide in delivering services or product. The Annex on what content should be included in a SAMP will also be very useful as there has been a lot of debate about that, given the lack of direction in the original document. Alignment Another key focus for TC 251, has been on providing further guidance on how organisations can better align their financial and non-financial functions. This arises from recognition that the original ISO provides encouragement for such but is short on how to go about it. This issue is driven by the fact that for many organisations, asset management is still seen as a technical or engineering activity and does not get the attention it deserves at the board room or with the financial controllers. Accordingly, as well as the Annex E mentioned above, TC 251 has embarked on the development of a new Technical Specification titled Guidance on Alignment of asset management, finance and accounting Currently, many asset holding organizations have arranged asset management, finance and accounting in different departments and functional areas with poor communication channels between these functional areas. Tthis has resulted in sub optimal processes, reporting and decision making based on a lack of transparency or incomplete information. As a result, the inaccurate reporting on assets and asset management to the different stakeholders leads to inappropriate actions. Asset Management is a function not exclusive to any one part of the organization but should be seen as multifunctional and multidisciplinary. Aligned financial planning, accounting, decision making and reporting are crucial aspects of effective asset management. Conversely asset management has major impacts on financial planning, decision making and reporting. Successful achievement of organizational objectives requires close coordination and alignment between the asset management, finance and accounting functions. This Technical Specification will provide advice on how organizations can achieve effective and efficient interaction between asset management, finance and accounting functions. This will generally result in improved internal controls, more transparent and complete and timely reporting, commonly agreed terminology relating to assets, a more efficient measurement of key performance

3 indicators and enhanced availability and accuracy of information for decision makers. These improvements will without a doubt contribute to the achievement of the organization s strategic objectives. The TS will go on to provide the necessary how-to guidance to actually achieve that alignment. The technical specification is being developed with input from a wide crosssection of the TC 251 global asset management and financial members. It is expected to be ready for publication in early ISO TC 251 Website Other significant enhancements being driven by ISO TC 251 include improved channels for feedback and dissemination of materials that can help organisations on their asset management journey. One prime example of this is the recent launch of a TC 251 website. Performance improvements: Effective and efficient management of short and long term opportunities improves sustainability, allowing the organization to consistently meet or exceed the performance and social responsibility expectations of stakeholders. Cost improvements: An asset management system facilitates improved return on investment and cost reduction metrics without sacrificing short or long term organizational performance. Management of risk: The ongoing review of processes, procedures, and asset performance enables informed management decisions that balance cost, risk, and performance data to improve organizational efficiency and effectiveness. Assurance of business growth and improvement: A robust asset management system aids improvements with formal, collaborative, prioritized, and coordinated implementation plans that enable the entire organization to communicate and understand the goals and commitments. Reliable decision making: Implementing an asset management system drives reliable decision making for the development, coordination, and control of asset related activities. It also aligns these activities with core organizational objectives. The site includes details of various resources available and articles written by TC 251 working groups such as: Managing Assets in the context of Asset Management Improving Alignment between Technical and Financial Management within Organizations Key Benefits of Adopting ISO As highlighted on the TC 251 website, the following key benefits can be expected from applying these Standards: Enhanced stakeholder confidence through compliance and improved reputation: Using the ISO standard, based on the guidance of ISO 55002, supports a clear policy and strategy that maintain and continuously improves the asset management system and demonstrates alignment with other management systems. IPWEA role in the ISO standards Genesis of the Standards IPWEA was invited, with a number of other peak bodies, to be part of a Standards Australia Mirror Committee to work internationally on the development of the ISO asset management set of standards. Whilst our main focus from IPWEA was infrastructure, we also brought our experience from local government on the importance of

4 financial sustainability. So we lobbied to ensure that the importance of linking asset management with financial management, was recognized in the standards. It has been interesting to see how these new standards are helping invigorate many organizations to adopt more of a management systems approach in how they go about their asset management task. Of particular importance is the emphasis placed by the standards on things like commitment from top management, a value proposition and a risk based approach. IPWEA Manuals Throughout the development of the ISO standards, IPWEA was very mindful that whilst the standards embodied all the various requirements in other words, the what to do, they did not cover the how to do it. That is why we in the infrastructure management sector, are fortunate that we already have such a great resource as the IIMM which does provide the necessary how to. IIMM The 2015 IIMM has been updated to reflect the ISO approach but includes a strong focus on the asset life-cycle as applicable for infrastructure assets. It includes a separately available Quickguide which provides an overview of the content. There is also a freely available Supplement which links each of the how to parts of the IIMM to the relevant requirements clause of ISO Go to AIFMM The companion Manual to the IIMM of interest to the asset management practitioner is the Australian Infrastructure Financial Management Manual (AIFMM) revised also in 2015 to reflect ISO and to maintain its currency with the ever-changing Australian Accounting Standards. The AIFMM provides the link between the technical and financial aspects of infrastructure asset management. NAMS.PLUS for AM Planning In 2007, NAMS.AU recognised that even with manuals like the IIMM available, many councils and other organisations, were struggling to actually develop useful asset management plans. Some utilised consultants to help them achieve their first plan. But often, there was a lack of in-house involvement, understanding and hence application of the planned actions. This situation led to the establishment of the NAMS.PLUS suite of templates and training. Continuously evolving, it has some 60% of Councils in Australia as subscribers and a growing number in Canada where the tools have also been found to be of direct relevance and applicability. It is particularly attractive to the many small Municipalities in Canada who like the hands on, simple approach it provides. A recent product refresh of NAMS.PLUS3 is complete and includes updates of: Templates and resource updates to align with IIMM 2015 and ISO using international language. Asset management plan (Comprehensive and Concise) Expenditure template AM Plan Templates are now customised to suit all asset intensive organisations (not just local government) in-line with Section 4.2 of the IIMM. The templates: Are suitable for any infrastructure organization regardless of size and level of asset management maturity or Country. Software is currently being configured to enable a new section for a Strategic Asset Management Plan template and modelling (graphs and reports) to align with the IIMM 2015/ISO requirements. Another useful part of NAMS.PLUS are the two maturity assessment tools, one that assesses against the National Assessment

5 Framework set by COAG and the other against the ISO requirements. Both can be done as self assessments or with the help of a third party oversight. They provide guidance on desirable future improvement for the organisation s asset management development. 8 elements of asset management planning with 8 modules over 10 weeks and includes: 8 x 90-minute live webinars, forum challenges, multiple choice questions, 2 assignments, including preparing a draft asset management plan, How to videos and resources, and A qualification of Professional Certificate in Asset Management Planning on successful completion. Currently in its 4th year of operation with registrations exceeding 670 participants with an average completion rate greater than 73%. The next course is scheduled to start in the second week of September Details can be found at: Graduate Certificate and Bachelor of Technology (Professional Honours) in Infrastructure Asset Management For more on NAMS.PLUS3 go to the website: agement/namsplus Training for Applying the Resources It is obviously not enough to simply produce documents like the various manuals and resources already described here. IPWEA has risen to the challenge of providing training to any interested parties, on application of the various tools and resources now available. Professional Certificate in AM Planning The Professional Certificate in Asset Management Planning is delivered across the world and is supported by the American/Canadian Public Works Association, Canadian Network of Asset Managers, Finnish Association of Municipal Engineering and the International Federation of Municipal Engineering. This on-line course encourages greater participation and on-going commitment from participants. The certificate course is based on Recognising the need of some for more formal education options, leading desirably to a university-based accreditation, IPWEA teamed up with the Centre for Pavement Engineering Education (CPEE) and the University of Tasmania to offer post graduate courses in Infrastructure Asset Management. This has proved popular and the courses now offered are the Bachelor of Engineering Technology (Professional Honours in Infrastructure Asset Management) and the Graduate Certificate in Infrastructure Asset Management programs. Details are at We are also looking at the possibility of further collaboration with NZ NAMS, CPEE and others, to explore the possible rollout of the NZ NAMS Diploma in Asset Management in Australia. Practice Notes Another need identified by many of our constituency, was that of practical guidance for those involved in work such as carrying out

6 condition assessment of various asset classes. This is so essential to gain a full appreciation of just what condition our infrastructure assets are currently in and what remaining useful life they might have. Also very importantly, the Practice Notes address what strategies need to be implemented to replace or renew assets at the optimum time in their life-cycle. The aim has been to work with leading industry practitioners to provide tools to assess condition grades (1 to 5), backed up by pictorial examples of actual assets in the different stages of life. To date we have produced the following list of practice notes: PN 1 Footpaths & Cycleways v PN 2 Kerb & Channel (Gutter) v PN 3 Buildings v PN 5 Stormwater Drainage v PN 6 Long-Term Financial Planning 2012 PN 7 Water Supply & Sewerage v3 PN 8 Levels of Service and Community Engagement 2014 PN 9 Road Pavements (Visual Assessment) 2015 PN 9.1 How to Assess Road Pavement Condition 2016 PN 9.2 How to Integrate Pavement Assessments into AM Planning 2016 PN 10.1 Parks Management: Inventories, Condition and Performance Grading 2014 PN 10.2 Parks Renewal Planning, Valuation and Asset Management Plans 2016 PN 10.3 Parks Management: Levels of Service 2016 PN 11 Towards More Sustainable Street Lighting 2014 PN 12 Useful Life of Infrastructure 2017 New Practice Notes are under development on topics such as Prioritising Capital Works Programs and Managing Natural Assets. For more detail see: Asset Management Congress With its growing acceptance by government agencies and across industry sectors, IPWEA has recognized that it also can play an important role in advocating on policy, with respect to how asset management should best be progressed for infrastructure agencies across Australia. With that in mind, IPWEA has developed a number of policy positions mainly on long-term financial planning, appropriate use of debt and on appropriate application of the ISO standards for asset management. To further this role, a biennial 2-day IPWEA Asset Management Congress is proposed to commence in It is intended that this will aim to engage our political parties on the importance of investing in infrastructure and its appropriate level of asset management. Accordingly, Canberra is the likely host City and we are looking to announce dates and venue at the IPWEA 2017 International Public Works Conference. Conclusion IPWEA is pleased to be able to participate in the work of developing Standards such as ISO and assist asset management practitioners as they continue on the journey of implementing best appropriate practice for their organisations. The many tools and resources available through the wide industry support, including particularly our NAMS.AU Consultant Supporters, is testimony to the great collaborative effort that can be harnessed by those of a like mind, prepared to pool expertise to further the infrastructure asset management cause. References 1. IPWEA 2015 Australian Infrastructure Financial Management Manual, Institute of Public Works Engineering Australasia, Sydney, NSW. 2. IPWEA 2015 International Infrastructure Management Manual, Institute of Public Works Engineering Australasia, Sydney, NSW.

7 3. ISO Asset management Overview, principles and terminology 4. ISO Asset management Management systems - Requirements 5. ISO Asset management Management systems - Guidelines for the application of ISO Peter Way PSM Biography Director NAMS Council - IPWEA peter.way@ipwea.org Having semi-retired from Logan City Council and with some 40 years experience in local government engineering, Peter Way is now devoting his time to advancing asset management through the IPWEA National Asset Management Strategy Council. Peter has been the principal author of a number of the Practice Notes on condition and performance assessment on key asset classes. Peter has also been the principal author of the study material based on the IIMM and the AIFMM for the Post Graduate Courses in Infrastructure Asset Management run through the University of Tasmania. Peter also represents IPWEA on the Standards Australia Mirror Committee for the ISO Standards for Asset Management. Peter is a Civil Engineer with post graduate qualifications in Urban and Regional Planning and an MBA from UQ.