asset management programs...9 asset management effective asset management programs strengthen the...
TRANSCRIPT
Advancing Your
Asset Management
Program
GFOA of Western Canada 2015 Annual Conference
Whitehorse, YK September, 2015
2
Introductions
Ross Homeniuk
Director,
Global Infrastructure Advisory
National Leader,
Infrastructure Asset Management
3
Background
Public infrastructure is a growing
concern. As cities, utilities, and
public institutions and agencies,
we are challenged to balance
current and future requirements,
while living within our means.
Changing Environments
Limited Resources
Shifting Priorities
Aging Infrastructure
4
Background
Many of us are revisiting our approach to infrastructure asset
management to help better understand, plan for, and address
these challenges and opportunities.
Target limited
resources
Adapt to
changing realities
Enhance
transparency and
defensibility
■ Link assets and investments to the services they support
■ Quantify and evaluate LOS, risk and value-for-money
■ Plan-for and prioritize needs and opportunities
■ Accommodate growth without compromising existing infrastructure
■ Incorporate social considerations into plans and decisions
■ Improve resiliency and adaptability to internal and external change
■ Communicate the business case behind spending decisions
■ Justify new or increased investment based on ROI
■ Demonstrate responsibility, stewardship and due diligence
5
Drivers - Canada
The push for better asset
management is being
supported at many levels
■ Federal
■ Provincial
■ Industry
■ Grass Roots
6
Drivers - Alberta
Many drivers impacting push for
better asset management in
Western Canada’s public sector
■ Aging asset base
■ Development and growth
■ Economic downturn
■ Increased scrutiny
■ Climate change
■ Funding programs
7
Asset Management
Asset management involves balancing infrastructure system
costs, opportunities and risks against the desired performance
of assets, to achieve business goals and objectives.
Infrastructure value is created
and sustained by managing the
trade-offs between service, risk
and cost over an asset’s lifecycle.
Understanding these factors, and
their contributors, help us to…
Align assets and service outcomes
with current and future objectives
Manage the risks associated with
meeting these requirements
Optimize lifecycle investment and
minimize total cost of ownership
8
Asset Management
Important to recognize that effective asset management requires
that we move beyond minimum financial reporting requirements
and consider how these relate to long-term needs.
TCA Reporting Planning and
Forecasting
9
Asset Management
Effective asset management programs strengthen the asset
management function, and enhance the asset management
system needed to drive planning and decision making.
Strengthen the organizational enablers
needed to support and sustain the asset
management program over the long-term.
Technology People
Data Process
Policy &
Governance
Strengthen the AM Function
Enhance the activities, practices and tools
guiding robust, effective infrastructure
investment planning and decision making.
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
Enhance the AM System
10
Strengthen the AM Function
Functional alignment is critical to program
implementation, sustainment, and its overall
success. An objective assessment of current
organizational capacity and operating
environments provides an understanding of key
gaps and opportunities for improvement.
Technology People
Data Process
Policy &
Governance
11
Enhance the AM System
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
An integrated Level of
Service (LOS)
framework provides a
common platform for
measuring system
performance relative to
internal and external
goals and
requirements.
Corporate
Level-of-Service
Requirements (i.e. Why we’re here…)
Customer
Level-of-Service
Requirements (i.e. What we deliver…)
Technical
Level-of-Service
Requirements (i.e. What we do…)
Serv
ice M
anag
em
ent
Business Entity
CoLOS 1
TLOS 3
CoLOS 2
TLOS 4
TLOS 5
CoLOS 3
TLOS 1
TLOS 2
CLOS 1
CLOS 2
CLOS 3
CLOS 4
TLOS 6
CLOS 5
TLOS 7
CLOS 6
TLOS 8
12
Enhance the AM System
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
Operational
Requirements (i.e. Needed Activities)
Capital
Infrastructure
Requirements (i.e. Needed Assets)
Corporate
Level-of-Service
Requirements (i.e. Why we’re here…)
Customer
Level-of-Service
Requirements (i.e. What we deliver…)
Technical
Level-of-Service
Requirements (i.e. What we do…)
Serv
ice M
anag
em
ent
Asset and O
pera
tions
Managem
ent
Business Entity
CoLOS 1
TLOS 3
CoLOS 2
TLOS 4
TLOS 5
CoLOS 3
TLOS 1
TLOS 2
CLOS 1
CLOS 2
CLOS 3
CLOS 4
TLOS 6
CLOS 5
TLOS 7
CLOS 6
TLOS 8
Assets 3
Ops 4
Ops 5
Ops 6
Assets 4
Assets 1
Assets 2
Ops 1
Ops 2
Ops 3
Relationship modeling
identifies linkages
between physical
infrastructure and the
service it supports.
Risk analysis is used to
identify and evaluate
service gaps and
enhancement
opportunities.
13
Enhance the AM System
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
Establishes the case for change and clearly
defines the need for the investment.
Business Needs &
Desired Outcomes
Identification, analysis, and screening of a
comprehensive list of options to demonstrate
due diligence in the selection of choices.
Preliminary Options
Screening
Full comparison of each viable option against
the evaluation criteria identified in the
preliminary analysis
Viable Options
Analysis
Recommendation of a preferred option
based on the net advantages of the viable
option over all others.
Justification &
Recommendation
Strategic considerations for how the
investment will be managed and supported.
Managing the
Investment
Lifecycle summary of benefits and costs
associated with implementing the
recommended investment.
Lifecycle
Summary
A structured business
casing framework
provides an effective
platform for evaluating
project options and
defining scope, budget,
schedule and lifecycle
management
requirements.
Lifecycle
Bu
sin
ess C
asin
g F
ram
ew
ork
14
Enhance the AM System
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
A multi-criteria
prioritization (MCP)
model evaluates
projects based on
business objectives
and service impacts,
and prioritizes
investment on a value-
for-money basis.
Essential LOS
Maintain ELOS
Address Regulated Change
Quality LOS
Maintain QLOS
Enhance QLOS
Image LOS
Maintain ILOS
Enhance ILOS
Economic
Improve Operational Efficiency
Support Business Growth
Environmental
Improve Environmental Stewardship
Social
Improve Corp. Social
Responsibility
Support Community
Development
Business Objectives
Investment No. 1
Investment No. 2
Investment No. 3
Investment No …
Improve Climatological
Resiliency
15
Enhance the AM System
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
Capital investment
plans (CIP) are
developed using risk
and scenario analysis
to evaluate and stage
prioritized projects
based on funding,
resource and
deliverability
constraints. $
YR 1 YR 2 YR 3 YR 4 YR 5
Low Risk Filter Full Staging Flexibility
Moderate Risk Filter Limit Staging Variance
High Risk Filter
Prioritized Projects
Maintain Recommended Staging
16
Enhance the AM System
Define Goals
Assess Needs
Evaluate Options
Identify Priorities
Develop Plans
Track Outcomes
The validation of
investment outcomes
against business case
goals and objectives
demonstrates value for
money and ensures the
ongoing transparency
and defensibility of the
planning process.
Planned Outcomes
■ Service Impact
■ Business Impact
■ Cost
■ Schedule
■ Quality
Actual Outcomes
■ Service Impact
■ Business Impact
■ Cost
■ Schedule
■ Quality
17
Starting your asset management journey…
Build Buy-in and Support
Formalize Commitment
Set Clear Direction
Develop the Plan
18
Build Buy-In and Support
Establishing a common understanding of stakeholder viewpoints
is crucial in proactively building common vision and focus on
asset management needs and priorities.
Stakeholder Key Issues Business Goals Area of Influence Expected benefit from asset management
Finance (Example)
■ PS-3150
reporting
requirements
■ Financial stability
■ Maintain compliance
■ Fair valuation of
assets
■ Understand cash-flow
requirements
■ Stable financial plan
■ Historic financial
information
■ Financial accounts
■ Financial plan
■ Stable long term
financial plan
■ Cost savings
■ More readily
available information
Council
Leadership
Engineering
Operations
Etc…
19
Formalize Commitment
An Asset Management Policy
formalizes an organization’s
commitment to and provides a
clear understanding of goals
and objectives, roles and
responsibilities.
Asset Management Vision
Goals and Objectives
Roles and Responsibilities
Strategic Relationships
20
Set Clear Direction
An asset management strategy sets clear direction by defining
the actions through which the vision will be achieved. The
actions are expressed in the form of business improvements
which are staged based on urgency and return on investment.
AM Plan(s)
AM Strategy
AM Policy Principle/ Objective
Action
Improvement/ Investment
Improvement/ Investment
Action
Improvement/ Investment
Principle/ Objective
Action
Improvement/ Investment
Improvement/ Investment
21
Develop the Plan
An Asset Management Plan (AMP) serves as the business
plan, documenting an organization’s approach and strategy
for meeting defined business and service objectives through
ongoing investment in operations, infrastructure and
business change.
■ Why are we
here as an
organization?
■ What is our
vision and what
do we want to
achieve?
■ What services
do we need to
support these
goals?
■ At what level do
we need to
provide them?
■ How does our
infrastructure
support service
delivery?
■ Where are the
gaps and
opportunities?
■ What do we
need to do to
achieve this?
■ What capital and
operating
investment is
needed?
■ What will this
cost us and how
will we pay?
■ What trade-offs
are needed to
make this
sustainable?
Business Goals
and Objectives
State of
Infrastructure
Desired Levels
of Service
Financial
Strategy
Management
Strategy
22
Asset Management Plans
Business Goals
and Objectives
Desired
LOS
Financial
Strategy
Promote Sustainable
Service Delivery
Economic
Environmental
Social
Balance Budgets
Operate Efficiently
Stewards to the Environment
Resilient to Climate Change
Accessible and Responsive
Support Community
Development
$ of projected deficit
OPEX variance as % of budget
GHG emissions as % of 2010
Values
Unmitigated Climate Risk
Hrs needed to respond to
service request
# of denied development
requests
Assets
Activities
Activities
Assets
Activities
Assets
Activities
Assets
Grant
Tax
Reserve
Borrow
Fee
$ of sustaining capital vs. revenue
Crew utilization rate
Overtime hours as % of
budgeted
$ of backlogged upgrades
# systems requiring
adapt. Plan
$ of backlogged adaptation
works
Hrs of crew backlog
Yrs of backlogged
serviced land
State of Infrastructure
Asset Management Strategy
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
$
1 2 3 4 5 6 7 8 9 10
23
Barriers to Success
Losing focus on the Business
Infrastructure doesn’t exist to be infrastructure. It exists to
serve a purpose. When done effectively, asset management
helps us align our infrastructure, and associated capital and
operating investments with our business goals and priorities.
Understanding relationships between our business
priorities, our service requirements, and our physical
infrastructure assets helps us understand the
dependencies of improvement on business outcome
Will also help in identifying relationships between
stakeholders and establishing plans to overcome silos, and
communicate and manage needed change.
Isolating improvement
Sound Policy and Governance, People, Process, Data and
Technology are organizational enablers needed to successfully
introduce and support effective asset management over the
long term.
To be effective, an AMP must consider the interrelationships
between all of these factors, and how they will work
together to support business need.
Integrated strategy needed to ensure that needed supports
get introduced along with improvements to practices and
tools.
24
Barriers to Success
Trying to control everything
Pushing asset management from the top is difficult and often
results in conflict and animosity between corporate and
business unit teams. Eventually this results in business units
“doing their own thing” after the initial push has subsided.
Balance corporate control with business unit autonomy –
AMP must introduce overall guidance and support, while
respecting that some flexibility is needed for OCs to
function effectively
Change strategies should be tailored to each operating
company, demonstrating and aligning structure around
common needs and priorities, while respecting OC
mandates and intricacies
Limiting engagement
Stakeholder engagement is critical to achieving buy-in and
support for EAM corporately and within the operating
companies.
Identify stakeholders and dependencies early on
Keep engagement and change management at the forefront
of all work activities
Work collaboratively and flexibly to effectively target and
utilize people’s time
Employ proven facilitation techniques to maximize input and
contribution
Track and communicate progress – nothing builds support
like success.
25
Available tools and resources
Over the past decade significant advancements have been
made in the field of asset management across Canada, and
much information aimed at supporting this process introduced.
Infrastructure Asset Management Alberta (IAMA) www.assetmanagementab.ca
Asset Management BC (AMBC) www.assetmanagementbc.ca
Saskatchewan Municipal Asset Management (SMAM) www.assetmanagementsk.ca
Municipal Finance Officers’ Association of Ontario (MFOA) www.mfoa.on.ca
Canadian Network of Asset Managers www.cnam.ca
Federation of Canadian Municipalities (FCM) www.fcm.ca
Institute for Asset Management www.theiam.org
Institute of Public Works Engineers of Australasia www.ipwea.com
New Zealand Asset Management Support www.nams.org.nz
International Standards Organization ISO 55000:2014 www.iso.org
26
Take-Aways…
A robust approach to
asset management
supports us in making
sustainable and
effective plans and
investment decisions
Guides us in targeting limited resources
by weighing the trade-offs between front-
line outcomes, costs and risk to service
Supports us in adapting to changing
realities by considering needs and
investment requirements over the entire
asset lifecycle
Enhances transparency and defensibility
by introducing rigour and consistency
into how needs and priorities are
established and communicated
27
Take-Aways…
Policy and Governance – Aligns asset
management thinking and provides mandate
by demonstrating executive support
People – Builds organizational competence
and capacity and integrates thinking in to day-
to-day activity
Process – Introduces consistency and
transparency in to planning and decision
making activities
Data – Informs and supports the objective
assessment of needs and investment priorities
Technology – Reinforces procedure and
supports and streamlines the collection,
management and use of information
A successful asset
management program
is built upon a well
thought-out foundation
of organizational
enablers and supports
28
Take-Aways…
AMPs are meant to be living documents and
evolve over time as needs, practices and
priorities change
AM system components are used to
demonstrate alignment between spending and
strategic goals and priorities.
Initial plans will be basic, reporting current
practice and spending priorities, and establish
a plan for AM system improvement.
Mature plans will demonstrate progress in
meeting service objectives, inform budgeting
and guide long-term investment strategy
Asset Management
Plans guide long-term
investment and provide
a platform for
benchmarking and
improvement
Thank you
Ross Homeniuk
Director,
Global Infrastructure Advisory
T : +1.204.891.7569
Email: [email protected]
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