Taking Asset Management to the Next Level: The Opportunity of ISO 55000

I am fortunate in that my career to date has provided the opportunity to work with some of the leading water/wastewater utilities in the world ? in the U.K., Europe, Australia and North America. Over the last two-plus decades I have seen the evolution of asset management in the water industry, from early attempts at GIS-based data collection and storage to today?s advanced analytics and optimization. Never over that period have I seen the industry more ready and more in need of implementing good practice asset management than right here, right now in the United States. The issue of a new ISO standard for asset management in early 2014 could herald a new dawn and provide the key catalyst for the widespread uptake of asset management in the U.S. water sector.

My assessment that the time is right is informed by the results of Black & Veatch?s second annual ?Strategic Directions in the U.S. Water Industry? report, which includes a survey of nearly 400 U.S. water and wastewater utilities, and an analysis of those survey results. Similar reports are also produced for the electric and gas sectors. These reports reiterate a number of key issues facing utilities in a post-2008 recession existence, including the need to manage risks related to aging infrastructure, a lack of regulatory appetite to raise rates, capital unavailability, the need to reduce capital and operating costs and the consequences of an aging workforce.

With the emphasis moving away from new build and toward optimizing the operations and maintenance of the existing asset base, U.S. water utilities are increasingly turning to asset management to enable cost-efficient service delivery. Past barriers to asset management programs, including lack of understanding of the key building blocks, reliance on complex and often-ineffective software solutions, and uncertainty surrounding the benefits of implementation, no longer stand in the way.

In 2004, the United Kingdom?s Institute of Asset Management (IAM) developed Publicly Available Specification (PAS) 55, a specification for optimized management of physical assets. PAS 55 has proven successful as an asset management framework, with widespread adoption in the U.K. utility sector as well as among a number of leading utilities around the world. As a result, it has become the default international standard for asset management. However, making PAS 55 applicable to a broader range of organizations ? and truly international ? necessitated improvements. These included the development of a common and uniform asset management language and changing the perception that asset management was only suited to large-scale utility and infrastructure organizations and physical assets. The specification needed to become more accessible to a wider range of utilities.?

Using PAS 55 as a foundation, the International Organization for Standardization (ISO) established and assigned Project Committee 251 the considerable task of developing the international asset management standard, ISO 55000. At its most recent meeting, the committee ? that includes 31 participating and 12 observing member countries including the United States ? voted to approve the current draft. Publication is scheduled for early 2014.

ISO 55000?s fundamental objective is to guide and influence the design of an organization?s asset management activities by embedding a number of key concepts and principles within the asset management framework. This includes focusing more on the value assets provide to an organization and its stakeholders. Additional emphasis is placed on leadership, culture and the need for commitment from all levels in order for an organization to realize value. Another key concept is that effective governance should provide assurance that assets will fulfill their required function and performance. This is important in the U.S. water sector, where dynamic tension exists between the need to minimize the impact of rate increases and the fact that better-informed customers are beginning to demand higher service levels.

The standard also requires organizations to develop a strategic asset management plan to demonstrate the ?relationship and alignment between the asset management objectives and the organizational objectives, as well as defining the processes, systems and activities required to achieve the asset management objectives.? This is certainly a good practice approach and at the core of several successful asset management implementations globally.

So what benefits can utilities expect to realize from implementing ISO 55000? Our experience with PAS 55 shows that implementing an effective asset management framework creates an asset-centric culture that enables organizations to balance performance, cost and risk. Organizations deliver levels of service at the right price and in a risk-informed way, making better choices about how much to spend on their infrastructure ? as well as when, where and how to do it.

Implementing an asset management framework or management system as part of a structured asset management improvement program develops a foundation from which to develop asset management plans, processes and information systems. The good news is that utilities that already have PAS 55 in place will have most of the components that ISO 55000 prescribes. However, utilities need to enter into this process with an openness to change in order to get the most out of it. ISO 55000, like PAS 55, should not be treated as a ?check the box? exercise, but as a way to promote sustainable change in the organization. The real advantage of ISO 55000 for U.S. water utilities is the opportunity to introduce sustainable change and embed beneficial asset management practices. ?

Will Williams is director of asset management with the Management Consulting Division of Black & Veatch. For additional information, visit the global company?s website: www.bv.com.?

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