Chapter 2: Importance of Maturity in Implementing Asset Management Introduction Transportation agencies are facing many of the same challenges and could benefit from the adoption of asset management principles. These challenges include increased demand from customers, reduced budgets, and greater challenges to deliver value for money and transparent and auditable processes for investment. However, many organizations lack the resources and/or experience to initiate and grow an asset management program. Therefore, PIARC has developed this guide to support transportation organizations in their implementation of asset management There are many factors influencing the way transportation organizations make decisions about managing their transportation assets. The traditional way of doing business, which postpones repair activities until major deterioration occurs, is no longer sustainable. It is too expensive, and it erodes the value of these important assets. As the costs of operating and repairing roads continue to increase and available funding decreases, it has become more difficult for governments to meet the demands of an aging infrastructure while dealing with public expectations to provide the same level of service for less money. The public also demands transparency and accountability from transportation organizations, requiring justification for decisions and responsibility taken for results. The typical way of doing business, which frequently relied on repairing the worst roads first after extensive deterioration has occurred, does not work. It is an expensive and ineffective way of maintaining transportation assets. It allows transportation assets to depreciate, resulting in a loss of asset value as well as asset conditions far below those expected by the traveling public. Therefore, in today s economic environment, organizations need to approach the management of transportation assets differently than in the past. There can be substantial consequences associated with continuing to manage assets ineffectively, including not providing safe and efficient movement of people and goods, all of which will ultimately cost the public more. No matter the size of the organization, the size of the transportation network, or the maturity of the organization with regard to data, analysis, and tools available, an asset management framework will support an organization in effectively managing its assets. Asset management is sometimes confused with pavement management and bridge management computer systems. It needs to be stressed that asset management is not a computer program, nor is it a rigid protocol. It is a set of business processes for decision making that encourages continuous improvement in infrastructure management. Asset management provides the organization a framework to communicate its approach to its workforce, to external stakeholders including politicians, to the media, and to its external partners and the public. Asset management is a framework leading to improved management of infrastructure assets and improved decision making based upon quality information and decision making. This guide will focus on various levels of a transportation organization s maturity in undertaking the activities that comprise the asset management framework. The levels of maturity focus on the following: 5
Organizational goals and objectives Inventory of pavements, bridges, and other major infrastructure assets Knowledge of the age, condition, and deterioration of these assets Availability of information to undertake lifecycle cost analysis for all major asset types and asset classes Information to undertake risk management analysis at the enterprise and program level Information to develop the organization s financial plan to support investment Development of investment strategies to manage the network for its whole life For organizations with little or no data concerning their assets and little or no experience in undertaking analysis as well as agencies with a wealth of information, there are five key questions, as listed in Table 2.1, that are the goal to be able to answer. Table 2.1 Key questions to work toward answering Question Section 1. What is the current state of my assets? What do I own? Where is it? What condition is it in? What is its remaining useful life? What is its remaining economic value? 2. What is my required level of service/ performance level? What is the demand for services by stakeholders? Are there regulatory requirements? What is my actual performance? 3. Which assets are critical to sustained performance? How does it fail? How can it fail? What is the likelihood of failure? What does it cost to repair? What are the consequences of failure? 4. What are my best Operations and Maintenance and Capital Improvement investment strategies? What alternative management options exist? Which are the most feasible for my organization? 5. What is my best long-term funding strategy? 6
Getting started No matter the size of the organization, its inventory, or the information and data it has concerning its assets, asset condition, and network, the organization should get started with the information it has. Step 1: Establish asset management goals and objectives that align with the agency s mission, desired outcomes, and business strategy. If the agency does not have a written mission that identifies desired outcomes and a business strategy, this should be developed and shared with stakeholders. It is important to set goals and objectives outside of silos in order to obtain the broader perspective from stakeholders, including elected officials and the public. (For example, the goal for pavement condition involves those responsible for pavements, but the goals of the condition are developed or supported by politicians and the public.) Getting started, questions to ask may include the following: What assets do we own, and what condition are they in? Does the organization have an inventory? Is the inventory and condition information of the organization s assets in a paper file or in a computer file, or does the agency have a computerized management system? Does the organization know how much has been invested in the subject assets in the past? What are the top priorities for the organization? What is the goal for the condition of pavements and bridges? Is this goal realistic, or is it aspirational? What is expected concerning asset condition by the public and politicians? Are the expectations and goals aligned? Are these goals openly shared? What strategies should be applied to reach these goals? Step 2: Undertake a self-assessment and gap analysis to determine the organization s current position across a range of asset management practices, and then prioritize areas that need to be addressed to meet the desired position. The most basic self-assessment can be based on the five core questions above; more complex questions pertaining to data, analysis, and the use and availability of this information can also be addressed. This information can be used to prioritize weak areas that need to be addressed. Step 3: Scope the specific improvement actions. It is important to take a holistic view of how asset management relates to the organization s mission and strategy. Key issues to be addressed include identifying the scope of assets to be included, the framework for decision making, internal business processes, capabilities, data needs, and benefits and costs. Transportation organizations need to look at the way they do business and undertake a self-assessment and gap analysis to assess where they are and what they need to do to better manage their network. This may be a need for additional data, or better sharing of the data, or enhancing processes within the organization. Questions to ask are the following: Is asset management a way of doing business in the organization? What strategies should be applied to reach asset management goals? 7
Should additional assets be included in the organization s approach to asset management? Does the agency adequately undertake a risk analysis to manage risk? Does the agency manage its assets for the long term? Is the agency able to communicate system condition, performance, and needs? Is a detailed gap analysis study needed? Maturity models There are a number of maturity models that exist for assessment of an organization s asset management competency. Examples include the following: AASHTO Transportation Asset Management Guide A Focus on Implementation International Infrastructure Management Guidance ISO 55000 Self-Assessment Methodology The AASHTO approach to self-assessment The AASHTO Transportation Asset Management Guide A Focus on Implementation uses a maturity scale to describe levels of transportation achievement in a way that allows an agency to reliably locate its current position and to help determine the next steps it should take. The maturity scale is not a value judgement; it does not separate good organizations from bad ones. Every agency is on a journey toward improved asset management, and the maturity scale merely provides the you are here marker on the journey. It also simplifies discussion of some aspects of TAM, allowing management, corporate governance, and other types of decisions to be set out in relatively self-explanatory terms. A scale presented in the AASHTO Transportation Asset Management Guide A Focus on Implementation is presented in Table 2.2. Table 2.2 TAM maturity scale TAM Maturity Scale Level Generalized Description Initial Awakening Structured Proficient Best Practice No effective support from strategy, processes, or tools. There can be lack of motivation to improve. Recognition of a need and basic data collection. There is often reliance on heroic effort of individuals. Shared understanding, motivation, and coordination. Development of processes and tools. Expectations and accountability drawn from asset management strategy, processes, and tools. Asset management strategies, processes, and tools are routinely evaluated and improved. Source: AASHTO Transportation Asset Management Guide A Focus on Implementation. Executive Summary. January 2013. Copyright 2011, 2013 by the American Association of State Highway and Transportation Officials, Washington, DC. Used by permission. 8
Case study: Asset management gap analysis and selfassessment effort of the US Federal Highway Administration (FHWA) The FHWA is assisting state departments of transportation (DOTs) in conducting and reviewing the results of an organizational gap analysis, which includes a self-assessment. The selfassessment considers, at a minimum, the adequacy of organizational strategic goals and policies with respect to asset management, whether asset management is taken into account in the agency s planning and programming of resources, as well as whether the agency is implementing adequate data collection and analysis policies, undertaking whole-life lifecycle cost analysis, and undertaking programmatic risk assessments to support an effective asset management program. Based on the results of the self-assessment, a gap analysis is undertaken to determine which areas of the agency s asset management process require improvement. The self-assessment questions are available at http://www.fhwa.dot.gov/asset/gap/selfassessment.pdf. The FHWA works with state DOTs in undertaking the asset management gap analysis, which includes the following: Review of asset management materials Undertake and analyze the results of the asset management self-assessment Interview key personnel from various offices Conduct in-person, real-time asset management self-assessment (clarify and discuss responses in a group setting) Interview state DOT senior agency leaders Develop draft implementation plan Coordinate workshop with DOT to review the draft improvement plan Final implementation plan Case study: Self-assessment using the IAM Toolkit The Highways Agency in the UK (now named Highways England) made it a contract requirement for its asset support contracts for the contractor to undertake a competency assessment against the requirements of PAS 55 (a Publicly Available Specification published by the British Standards Institution (BSI)) in order to assess asset management capability. In the first year, the contractor is required to achieve maturity level 1 and after two years maturity level 2. The approach uses the Institute of Asset Management (IAM) self-assessment methodology and toolkit. The level 2 assessment takes the following form: A gap assessment of the current competencies through interviews with key staff and a review of relevant documentation A report with recommended actions against each of the requirements in PAS 55 using the IAM assessment tool 9
A final review of the actions undertaken through furthered structured interviews and a final report assessing the maturity level The outcomes of this approach will be a set of asset management competencies and an action plan to achieve level 3 maturity. Figure 2.1 Example of a radar chart showing asset management competency clause scores 10