Achieving business sustainability with a management systems approach, aligned to ISO 55000

GHD Pty Ltd

By Farshad Ibrahimi, Executive Advisor & Service Line Leader, Asset Management, GHD Advisory
Tuesday, 21 March, 2017


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Asset management requires a multidisciplinary approach. It spans across a wide range of disciplines including engineering, finance, operations, information systems, management, contract and supplier management, human resources and organisational development.

Increased service expectations and asset utilisation, combined with a challenging economic outlook, are some of the challenges facing managers of critical water infrastructure.

Water utilities and other organisations with large asset portfolios are increasingly being asked to show regulators and stakeholders that they are delivering services in the most sustainable and efficient manner.

Plan for Victoria

In what is claimed as a first for the Victorian water industry, GHD was engaged to undertake a review of South Gippsland Water’s (SGW) Asset Management (AM) strategy, and develop an improvement plan, in alignment with two distinctive frameworks, namely: ISO55001 AM standards and the Victorian Department of Treasury and Finance (DTF) Draft Asset Management Accountability Framework (AMAF) requirements.

ISO55001 defines the requirements of an asset management system to provide an organisation with a disciplined approach to maximise value and/or minimise liabilities for its portfolio of assets. Most organisations aiming to increase their AM maturity are aligning their current practice to the key requirements of this standard, which will also set the organisation to efficiently achieve ISO certification in the future, with less additional effort.

The AMAF details mandatory asset management requirements as well as general guidance for state government agencies in Victoria. Mandatory requirements include developing asset management strategies, governance frameworks, performance standards and processes to regularly monitor and improve asset management.

Both the ISO55001 and AMAF frameworks share a focus on outcomes, and intend to help the organisation deliver better services. They encourage an increased focus on governance and executive-level ownership of asset management, using a management systems approach. Furthermore, asset owners are encouraged to display further diligence in maintaining and protecting their portfolios (sometimes billions of dollars worth of assets), which are integral to the sustainable futures of our communities, and the environment we live in.

The role of asset owners and managers (ie, utilities and essential service providers) is increasingly signified and recognised as one of utmost importance in creating livable communities while protecting the environment for the long term. Local frameworks like AMAF increasingly reflect the global focus on better asset management and service delivery. In this context, asset managers are at the forefront of driving and influencing change that will benefit not only our current, but future generations.

The project

SGW’s existing AM Strategy was focused on four strategic improvements: embedding AM into the business, using data to make informed decisions, formalising AM activities and implementing advanced AM.

The project involved a full review of the enterprise asset management framework, and the development of a strategic asset management plan and roadmap for full lifecycle asset management, through a Management Systems approach, aligned to both ISO and AMAF.

GHD used a carefully structured process to compare SGW’s AM Strategy and practice against the requirements of ISO55001 and AMAF. This involved:

  • a comprehensive document review;
  • an initial status quo assessment and validation;
  • engaging key stakeholders from executives through to practitioners;
  • comprehensive review of a series of AM and business documents;
  • development of a strategic asset management plan.

Outcomes

The exercise identified a series of challenges for SGW, both strategic and operational. A corresponding number of improvement strategies have been developed, supported by detailed action and implementation plans. Each improvement plan correlates to a mini business case, outlining context, background, issues/challenge, recommended actions, estimate of resources and timelines.

The strategic asset management plan developed for SGW will also inform the utility’s attestation effort, to publicise its asset management activity outcomes through its annual reporting frameworks, with more confidence. It provides the roadmap for a seamless transition towards compliance with global asset management standards (ie, ISO) and sets the benchmark for similar-sized organisations to take the leap.

Lessons for the industry

This level of improvement planning allows asset owners and managers to not only understand the metrics and strategies they need to comply with international standards and meet state government requirements, but also to be guided with the level of effort involved in driving change. Driving and influencing change at this level is not limited to technical and business process level improvements, but also extends to cultural transition, capability building, and increased operational and business resilience. Most importantly, the focus is on outcomes: ie, driving better service delivery to the community.

With advances in technology, and the Internet of Things, making information and knowledge readily available at our fingertips, our customers are becoming smarter in managing their service providers. The demand for improved service levels, and justifications for cost of service, are notionally at an all-time high, driving a customer-centric approach to service levels, and asset management strategies and investments. Asset owners and managers are therefore obligated to demonstrate further diligence in development of responsive strategies to meet these demands, and adapt an appropriate management systems mindset, moving forward.

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