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Taking the Mystery Out of Asset Management (2 of 3)

August 28, 2019

Why You Need to Start with Solid Business Goals

By Kevin Miller, Strategic Consultant, POWER Engineers
Kevin Miller of POWER Engineers

The second of three articles that discuss asset management as it applies to effective utility business processes.

There is real value and opportunity in taking an asset management program to the next level. It seems apparent that the main job for any utility is to manage the assets which allows them to serve their customers. The better they manage those assets, the better they can serve their customers. They can drive costs lower and reliability higher. They can reduce operations and maintenance and make their capital go further. It’s obvious.

But that is not how companies and municipalities work. Rather than assets, they need to manage to goals. These goals are driven by regulation, customers, investors, voters and other market circumstances. The goals are significant because they allow every employee to understand what is important and where they should focus their efforts.

How goals are established is also important. Senior management in the organization takes input from the groups mentioned above and creates actionable goals for the organization. Good goals are actionable and achievable, and progress toward them is measurable. Once established, goals should be communicated effectively so that every employee in the organization knows what they are and the role they have in moving the metrics so that the goals are accomplished.

So, what does this have to do with your asset management program? Well, every aspect of your asset management program should align with the organization’s goals. It is critical that each dollar spent moves one or more of the metrics associated with the goals forward, so the impact upon those metrics must be measurable.

Demonstrating your program’s  alignment with goals is how to develop management support for asset management. Senior management support is critical because asset management typically spans work groups at least if not entire business units at a utility. There are a lot of moving parts in an asset management program that demand significant effort which require solid management support.

The business goals I see most often fall into three categories: regulatory, safety and reliability. A well-developed asset management program can play a crucial role in each of these categories. With planning, your asset management program can be tailored to advance specific goals. For example, in the safety category, you can focus on problematic equipment, address systematic issues and comply with safety requirements.

As you build an asset management business case, it is important to focus on practices which support corporate goals. A great exercise is to list corporate goals next to proposed asset management practices under consideration in your program (as shown in the graphic below). Draw lines between the practice and one or more of the goals. If the practice does not support a goal, you may need to rethink it. Sure, there are baseline practices which are just part of doing business that almost always need to be included. But it is important to think carefully about the need for a practice which not support one or more goals.

It is much easier for senior management to support business cases with clear and concise alignment with corporate goals. It is the “why” of the business case. This makes it easier for managers to talk to their stakeholders about the importance of funding, staffing and supporting the project. Modern asset management systems now enable us to analyze practices and evaluate results streamlining the decision-making process.

Next in this series: Five Reasons to Move Forward with an Asset Management Program Now

Also in this series: How Mature Is Your Asset Management Program?

Feel free to reach out to me if you have any questions about asset management or sign up for a link to our registration page for POWER’s next webinar on asset management solutions. You can also view our most recent webinar on demand.

About the Author:

Kevin Miller is a strategic consultant in our Geospatial and Asset Management Business Unit. He started his career with FirstEnergy where he worked for 23 years in GIS, asset management, design, and capital projects. For the last 13 years Kevin has provided expert guidance to customers, product development and sales teams to develop solutions that apply technology and process improvement to achieve business value. He understands the utility business and the systems that support the business at utilities and has worked with many of the largest utilities in North America.