Commentary on BS ISO 55000/01/02 Standards for asset management

Transcription

1 Commentary on BS ISO 55000/01/02 Standards for asset management April 2014

2 Standards for asset management BS ISO 55000/01/02 The International Organisation for Standardisation (ISO) series of standards for asset management was officially released in January 2014, and in view of their potential impact on public sector asset management we felt it would be useful to provide a brief summary of our understanding of the documents forming the standard. You may recall the British Standards PAS 55-1 and 2 which was originally issued in 2004 and was subsequently revised in PAS 55 was intended to lead to the development of an international standard, and it has very much influenced these new ISO standards. The ISO series comprises three separate standards: BS ISO overview, principles & terminology BS ISO asset management systems requirements BS ISO management systems - guidelines for the implementation of ISO Each is intended to serve a specific purpose, so looking at each in turn: Part 1: BS ISO overview, principles & terminology This is effectively the umbrella document, providing the overview of the concept of asset management, a description of its benefits and how it fits within the corporate environment. As an ISO, the application of the standard is generic and intended to be appropriate for use in any industry, although clearly our interest is focused on property assets in the public sector. As such not all of the document is of direct relevance to our field, and whilst the terminology within the ISO is not necessarily what we are familiar with in the context of public sector property asset management, the broad principles are consistent with the various guidance documents and practices that we have been using for some time now. The requirement of the standard is relatively straightforward and follows the concept that if an organisation has a portfolio of assets, then it should be effectively managing those assets: The organisation will have a high level corporate strategy that sets out its overall objectives for the organisation as a whole, and the assets it holds should support or contribute towards the delivery of those objectives. The Asset Management System translates the organisational objectives into asset management objectives and defines processes through which they can be achieved. Then, through various asset management activities the defined processes are followed and executed to realise value from the assets (value being how you define it and is not necessarily financial). The use of Asset Management System and Asset Management terminology may cause confusion and it is useful to understand how they are used in the context of the ISO. 2

3 The ISO states that Asset Management is an activity or something that you do to implement the Asset Management System, which is something you have defined (in the context of the corporate strategy and organisational objectives). The term Asset Management System is used to refer to a management system for asset management. So effectively it is defining Asset Management as what we do on a day to day basis to manage and maintain the assets, but within the context of the Asset Management System probably what we might call the asset strategy and organisational governance. To avoid any ambiguity, the ISO makes it clear that whilst there may well be a degree of computerisation in use within an Asset Management System, it is not merely referring to a computerised system or programme. Recognising that an effective Asset Management System impacts on the whole organisation and requires a thorough understanding of the organisations activities and how they combine to deliver the overall objectives, the three ISO documents are all structured around the same key elements of an Asset Management System: This is reiterating the principles of good asset management as we know it, albeit in a slightly different format. What is quite helpful in the ISO is the emphasis put upon the intensive use of data and information in effective asset management, not only property related data but also the wider business or organisational data. To really manage assets effectively not only requires access to this information, but also needs a multi-disciplinary and cross organisation endeavour something that many public authorities to date have struggled to get across, so a useful message. There are examples in the ISO documents of physical assets impacting on businesses, and whilst most are geared towards major industrial organisations, they do illustrate how risk management is a key part of good asset management. Again, this is a useful message to help us develop the cross organisation endeavour and ensure a better understanding of how integrating asset management with other functions can help deliver benefits to our service colleagues through lowering of risk, reduction in costs and importantly service improvement. ISO is purely a voluntary standard, and whilst it does not really offer anything fundamentally different to existing professional guidance supporting property asset management in the public sector, it does add another global standard framework to reference in illustrating that we are delivering effective asset management, or to drive improvements. 3

4 Part 2: BS ISO asset management systems requirements The second document provides the meat of the standards, setting out what actions should be taken by an organisation wanting to manage its physical assets responsibly. Much of it is very similar in content to existing property asset management guidance that we are familiar with, but it might serve as a useful reminder or refresher of what should be in place, or to highlight what might be missing. Using the ISO terminology, the Asset Management System is structured around the key elements referred to earlier. Each element sets out what should be done to meet what are considered good asset management practices and these have been summarised below for ease of reference. Organisational context: Any organisation will have internal as well as external drivers, issues and constraints which need to be understood and reflected in the Asset Management System. It is essential that the needs and expectations of all stakeholders around asset management are understood and reflected in the Asset Management System. This can be a complex picture but the organisation as a whole needs to determine which stakeholders are relevant to the Asset Management System, their requirements and expectations for both financial and non-financial information and how this will be reported. The public sector is no different and the ongoing changes in the way public services are currently delivered, and will be in the future, is now involving other public, private and/or voluntary sector bodies as well as service users themselves which gives us even more of a challenge to get this right. Leadership: The ISO describes three main requirements for effective leadership, namely leadership and commitment policy organisational roles, responsibilities and authorities The emphasis is very much on the senior management of the organisation taking the lead role in ensuring that the value of asset management is recognised, communicated and integrated into the organisation s business planning. Senior managers should also promote crossfunctional collaboration, ensure asset management policies fit the needs of the organisation and are effectively communicated, and ensure that asset management is appropriately resourced. Senior managers should have clearly defined roles and have responsibilities formally assigned to ensure the suitability, adequacy and effectiveness of the asset management system and high level reporting on the performance of the asset management system. Much of this is just good business planning, but as we know from experience some elements can be more challenging for the public sector than others. Planning: Planning is a key element of the Asset Management System to ensure the organisation is clear how it will deal with risks, opportunities and its asset management objectives. The ISO emphasises the need to integrate the planning of asset management objectives with other organisational planning activities such as Finance, HR, ICT and other support functions. 4

5 As in any endeavour, there are both risks and opportunities which need to be identified and addressed to ensure the Asset Management System can achieve its intended outcomes, to prevent or reduce undesired effects and to achieve continual improvement. Plans are needed to address both the risks and opportunities, considering how they may change with time and organisational context. Again, those activities must also integrate with Asset Management System processes and in turn with other organisational processes. Objectives need to be established for all relevant functions and levels reflecting the requirements of stakeholders and other financial, technical, legal, regulatory and organisational requirements. These objectives should be included within the asset strategy and policies, be measurable, monitored, communicated, reviewed and be updated as appropriate. All of this should be documented and be clearly set out in plans to deliver the defined objectives. The delivery plans should clearly set out factors such as: Decision making and prioritising methods and criteria Processes and methods for managing assets throughout their life cycles What will be done, with what resources and in what time frame An overall time horizon for the plan, and review periods Actions to address risks and opportunities in the context of the organisation s overall risk management approach and contingency planning Support: The earlier elements of the Asset Management System have made it clear that asset management does not operate in a vacuum and integration and collaboration within the organisation and with other stakeholders is essential. The ISO identifies the need to allocate appropriate resources to deliver the objectives. A clear understanding and continuous review of staff competency needs should be undertaken and actioned with education, mentoring or training, which should be evaluated for effectiveness and documented. All staff need to understand how their work supports or impacts on the overall objectives and who they need to communicate with and how. We all know that data and information is key to asset management and the ISO is clear that the organisation needs to determine its information requirements to support its Asset Management System and the achievement of its organisational objectives. As such it should specify, implement and maintain processes for managing its information, determine the requirements for alignment of financial and non-financial terminology relevant to asset management throughout the organisation, and ensure that there is consistency and traceability between the financial and technical data and other relevant non-financial data. Whilst some authorities have achieved integrated corporate systems, many are still facing challenges to align technical property data with other corporate data systems, and this has a real impact on the ability to really coordinate effective asset management. A common theme running through the ISO is the requirement for documentation within the Asset Management System, and the standard provides details of what this should include. It is essentially requiring a formal document management system to include all relevant processes, plans, procedures etc, which should be appropriately controlled and kept current. 5

6 Operation: The ISO outlines the basic requirements to plan, implement and control the various processes needed to meet and implement all the plans, and the need to ensure this is appropriately documented. Change is inevitable, and something we will continue to face in the public sector. The impact and risks of that change on achieving the asset management objectives needs to be assessed and managed, and actions taken to mitigate the risk accordingly. The ISO also refers to outsourcing of activities, again something that is familiar to many of us in the public sector, and which can have a significant impact on achieving asset management objectives. (Whilst the ISO seems to refer to outsourcing asset management activities, we should be applying the same principles when considering the outsourcing of wider public services as this could equally impact on future property requirements). Any potential outsourcing needs to be considered in the context of its impact on asset management, the risks identified and processes established to ensure effective performance management and knowledge sharing. Again, all should be formally documented. Performance evaluation: To some extent, there may have been a tendency in the past to create a bit of an industry out of performance evaluation, losing sight of what is really important to measure. The ISO sets out the need for organisations to determine what needs to be measured and monitored, the methods to be used and how this should be evaluated, analysed and reported. This should essentially be a documented and evidence based evaluation and report on: The asset performance The asset management performance, including financial and non-financial performance The effectiveness of the asset management system As the senior managers in the organisation have a responsibility to ensure the suitability, adequacy and effectiveness of the Asset Management System (see Leadership above), they should also be ensuring it is appropriately subjected to internal audit review and management reviews at planned intervals to identify any improvements needed and lead to continual improvement. This is probably something that doesn t routinely happen in most authorities, the focus is more often around the performance of assets rather than the system itself. Improvement: Non-conformities will occur if the Asset Management System, or elements of it are not followed. As well as dealing with the consequences, corrective actions and controls will be required to eliminate the cause and prevent reoccurrence. The organisation should have formal and documented responses to non-conformities and should review the effectiveness of the corrective actions taken, and changes should be made to the Asset Management system accordingly. As well as responding to failures or non-conformities, the organisation should establish processes to identify potential failures and evaluate the need for preventive action with the aim of continually improving the suitability, adequacy and effectiveness of its asset management and the Asset Management System. 6

7 Part 3: BS ISO guidelines for the application of ISO This third document is perhaps the most useful of the three and focuses on providing guidelines to how to go about meeting the high level requirements of ISO and the specific requirements of what is needed in ISO The first two documents need to be read to get the full benefit of the guidelines, but the referencing used in the guidance helps with cross referencing specific paragraphs within them. Most of the guidance document expands on the requirements of ISO 55001, adding a lot more description, examples and things to consider in each of the key Asset Management System elements set out above. Because it is a generic standard applicable to all industries, it includes perhaps more than is needed for the public sector alone but it is a very useful reference for practicing asset managers to help understand the purpose of some of the ISO requirements. As it is generic, the standard is not prescriptive and there will be a need to interpret the requirements and action them in a way that makes sense to your own organisation but in this way it does encourage wider thinking of applicability in the public sector environment. Conclusion Whilst ISO outlines the main actions that should be taken in an organisation managing its assets effectively, as already mentioned much of it is a re-emphasis of what we have already seen in various guidance documents. However, we know from experience that not all authorities are putting everything into practice and the ISO might serve to perhaps provide additional weight to your argument if you are struggling to get the message across in some parts of your organisation. Collaboration across and within the whole authority together with external stakeholders is a key theme of the standard, along with the need for formal documentation and most importantly senior officer leadership of the asset management function - something we should all be aiming to put into practice. Although the standards are voluntary, they will no doubt serve to challenge thinking, both in organisations that think they have got it cracked and those that still have some way to go. This applies across all industries, and in some ways the public sector may be ahead of the game with the bespoke guidance we have been working with for some time - although of course the real test is whether or not we are practicing what we know we should be doing. 7

8 CIPFA Property The Quadrant Chester West Sealand Road Chester CH1 4QR cipfa.org/property Certificate Number 5524 ISO 9001 ISO 14001