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Why your asset management needs change

asset change management

Municipalities and state-owned enterprises that are required to deliver integrated infrastructure to support the new Integrated Urban Development Framework (IUDF) are some of the largest owners of physical assets in South Africa. 

While sound asset management should be at the heart of how these entities operate, most struggle with establishing an effective asset management organisation. The simple reason behind this is that asset management needs change management to work.

The skills shortages in South Africa, which is a common theme among developing countries, leads many organisations to require the services of consultants to assist with developing asset registers and an asset management improvement programme. Many of these use highly reputable asset management methodologies, which follow international best practice and conform to the ISO 55000 standard, yet a year later, the organisation often fails to make traction with its asset management programme. As with many intended strategic changes, it falls by the wayside.

In this article, we highlight useful ways in which we have managed to reduce the failure rate of asset management adoption by looking at the required steps through the lens of change management.

AM technical phase cycle

Collaboration wins buy-in

The first step should always be an assessment of the current asset management maturity of the organisation. Such an assessment should cover the full scope of asset management because this will provide the basis for the planning and implementation of an asset management improvement programme, and highlight the most crucial areas to be addressed. Typically, consultants carry out their assessments by capturing hard data and through interviews with key people responsible for the different stages and functions related to the asset base. The organisation is scored on a wide range of key performance areas with suggestions on which areas to prioritise for improvement, and the consulting engagement is closed out with delivery of the report to the organisation. This is the first lost opportunity where substantial gains can be made in organisational buy-in. While the assessments need to be undertaken independently, we have found that by changing the scoring process into a collaborative, intense exercise with all the organisation’s stakeholders in their asset management ecosystem, scores can be discussed and accepted, improvement targets can be challenged, and ultimately everyone leaves knowing and believing where they need to go. 

Asset management maturity is relative and there are always tough realistic choices to be made – trade-offs between performance, risk and cost. Managers sometimes don’t appreciate the extent of the trade-offs they’re making and the potential impact those choices will have. Serious engagement is required on prioritisation of improvements in order that the asset management strategy speaks to the organisational strategy and goals. By being part of the process, managers own the belief that the goals being set are achievable and necessary. Through this level of collaboration and communication, top management begins to accept asset management as indispensable to achieving the overall organisational strategy. Very often the current course of the organisation needs to be laid out explicitly in crisis management terms so that action is taken now to prevent a more difficult future position developing.

Entrenching a master plan

The second step is to develop an asset management charter to take cognisance of how people, plans and processes come together. At one of the largest water utilities in Southern Africa, a team of consultants facilitated discussion between senior managers in operations, procurement and the executive leadership, around establishing an asset management policy that met their budgetary forecast, and highlighted how funds could be allocated in terms of their service provision mandate. The policy established a standing steering committee comprising senior members from all their departments to oversee the implementation of the asset management programme and to provide regular status updates to senior management. The steering committee was of sufficient strategic level in the organisation to ensure continued top management support. The committee also performed a coordinating role that broke through silos to secure buy-in further down the organisation, with the result that the content of the charter’s annual costed and resourced master plans were adopted into each department’s annual plans. Involving people from all departments also had a material effect on creating a culture of cooperation and team spirit with all parts of the organisation understanding their individual contribution to achieving asset management improvement.

Implementation and motivation

The next step is to implement the master plan and monitor progress against the key performance indicators (KPIs) defined in the charter. In implementation, there are many organisational change management processes that are dependent on the organisation’s overall culture, which can throw an asset management improvement programme off its rails. Leadership gaps sometimes emerge where an implementation manager has left and a lack of management succession planning has resulted in an asset management void. Quite often, the competition for top management time pushes out and lowers the priority of overseeing the improvement programme. To counteract this, we have sometimes extended the engagement with the organisation to taking over the responsibility of the secretariat role in the steering committee. These small measures along the way help keep the programme on track.

Another issue that can often creep up during implementation is despair. Once the various teams get to work on implementing the master plan, it can seem to be a mountain of work and this intimidation can lead to inaction. We have found that coaching organisational managers through these human aspects is very important. It’s important to bite off bits and pieces, create a culture of celebrating small successes and going for a few small, quick wins to charge-up an organisation with momentum. When it comes to upping leadership buy-in, it’s even good to work with the organisation to make a big deal out of it, publically. Once there are expectations and a public campaign, the top managers have some extra impetus to get things going and keep things going. 

Change may require agility

Finally, when it comes to monitoring progress against the KPIs defined in the charter, it’s important to regularly review whether changes in the external or internal environments need to be taken into account. An example of this can be legislation changes, which create higher requirements on safety or quality. Another case involved a small utility that was effectively acquired by a much larger one. This created a whole new asset base to look after, which had a vastly different maturity to the larger organisation. In addition to the technical replotting, there were also organisation culture changes that were required. 

Resistance to change is a given and when you try to change how an asset-intensive organisation manages its assets, you are changing how a great many people need to do their jobs. The human factor is always a critical complement to getting the technical right.

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