Aneurin Hughes, the Senior Principal at Cardno in Brisbane, is an asset management consultant on the IPWEA’s NAMS.AU supporter group. He shares his thoughts on what it will take to deliver asset management best practice around the country.
What challenges do asset managers face on a regular basis?
It’s difficult to get management and elected members to commit to asset management over the long term. There is still a fair bit of lip service being paid to it further up the chain. It’s harder to get people to change at the top and at the bottom of the organisation. At the top, they have to respond to what the community sees as being the urgent priorities while at the work face they don’t often understand why traditional work practices have to change. They can get a bit cynical about management fads and ideas.
There is a tendency for the larger councils to work within silos to certain degree, although they are trying hard to overcome this tendency. There are separate groups with different approaches and priorities. Each department thinks that their approach is the right one. We have to get across to management that there are no shortcuts when it comes to asset management. Getting a consultant in or buying an expensive asset management system can be part of the asset-management process, but they are not going to solve anything alone. There is an ongoing need to invest in staff and systems and having an asset management system is just a start.
There also isn’t one correct approach. Having a process of gradual continuous improvement is more effective than spending a huge amount of money and investing in a lot of different initiatives. It doesn’t always work and there can be a lot of disappointment and disillusionment, if the large investment doesn’t provide the promised returns in the short term.
Another challenge is getting the organisation to go beyond regulatory requirements. There must be more than just a compliance mentality, whereby the attitude is “We’ve done what we need to comply and that’s it, let’s get on with doing some real work”. We also have to go beyond the ‘ribbon-cutting’ mentality. Elected members like to be seen opening new facilities, so there can be a focus on building new assets rather than making the best use of existing infrastructure.
Getting resources allocated to asset management and attracting and retaining staff are big issues as well. There is a fair bit of staff turnover in public works, but it is particularly high within asset management.
Why do you think councils haven’t taken asset management as seriously as you’d like in the past?
Elected members, in response to community perceptions, like to be seen to be doing things and responding to problems. Sometimes it can be better to be seen to react to an event than it is to plan beforehand. The public sees that the organisation has responded very quickly to an event, but maybe it could have been avoided if better planning had been in place.
It’s a bit like superannuation. People understand that it is worthwhile doing, but the urgent takes precedence over the important. If we weren’t required to make superannuation contributions from our salaries, it’s likely that most people would prioritise short-term expenditures (essential and non-essential) rather than funding their retirement in 30-odd years’ time. A person may realise a few years before retirement that their superannuation nest egg will be inadequate, by which time it will be too late. Similarly, if a council doesn’t have a long-term financial plan to sustain its services, then the community will have to be subject to significant rate increases or reduced service levels.
What are some of the things that the public works sector is doing well to manage assets?
Overall, they do a really good job, especially in the design and construction areas. There is an improved understanding of lifecycle costs.
There is also a greater understanding that new assets require allocated funding to cover operation and maintenance costs. Councils are pretty good at addressing problems and short-term needs. Funding constraints in local government do necessitate innovative cost-effective solutions. They have to do more with less to meet community needs.
There are a number of enthusiastic asset management champions within councils. But the problem will be when these champions leave the councils. In many instances the momentum of any asset management initiative drops. Unfortunately, many of these champions are not always on the top rung of the organisation. They need to be further up the organisation.
There certainly has been greater understanding between technical and financial staff in relation to asset management. There is a better understanding that asset management is about providing the required infrastructure to sustainably deliver services at the level that the community requires and is prepared to pay for.
There are improving asset management plans already out there, but that is just a start. The IPWEA’s NAMS.PLUS initiative has been excellent and the IIMM manual has been great. This has all been very positive.
In what areas is the sector still falling short?
The quality and reliability of asset information needs improvement. There is a lot of data out there, but the actual quality and reliability of the information might be poor. Making decisions on unreliable information can have undesirable and expensive consequences.
There is a lack of documentation on procedures. The documentation also must be succinct, in plain English and appropriate to the user.
One area that is important is undergraduate training. They need to see the context for the design and construction process, whether it is getting people from A to B, or improving public health and education or other community objective. Not all solutions have to be infrastructure either but these aren’t really considered in an engineering course. Economists (sometimes quite correctly) criticise engineers for being too narrowly focussed on building infrastructure rather than looking at other options. The undergraduate training also needs to account for lifecycle costs and other asset management principles.
Not everyone will be involved in cutting edge design and will be involved in a lot of other important activities. A lot of graduates, particularly civil engineering graduates have very little understanding of asset management. In the future there may be a specific asset management undergraduate degree (or at least a major elective to an engineering, finance or management degree) which covers the technical, financial, economic, information management aspects of infrastructure management.
Asset management needs to become more attractive and needs marketing – but not by engineers. We need experts in marketing to help us stimulate the minds of high school students. Many people currently perceive asset management as being rather unexciting and involving collecting a lot of data and looking after an asset register. While these are important activities, asset management has a far wider scope and we need to get across that it is an essential contribution to a capital-intensive business, which is what local government is. The billons of dollars’ worth of infrastructure require a multi-disciplinary approach. If you are marketing the asset management profession, you should be marketing a picture of an executive managing a huge infrastructure portfolio and making large capital and operating investments in that infrastructure, based on a wide range of options, to meet community needs.
Asset management is still a backroom activity. We need to promote it as a leading activity. If you’re managing expensive infrastructure, it should be a core part of your business. While I said there has been a closer relationship between technical and financial staff, and asset managers, there are still a lot more opportunities to work even closer together.
The information on how to do asset management is available. It is really now a matter of getting people on all levels to go out and do it.
How long do you think it will before local government has completely adopted best-practice asset management?
It will vary across the country. It will really depend on management commitment, to me that is the most important reason for the success or failure of any asset management initiative. Having ISO 55000 will help, particularly with the larger councils, which will probably see this as a means of implementing, and continuously improving asset management. It will be a bit beyond some of the smaller councils to go down a formalised ISO 55000 track, but the principles can be adopted by all organisations. Certainly, it will be great when the standards are in place.
From my observations of the last 10-20 years, I’ve seen organisations that have come close to an appropriate level of best practice. But then, for a number of reasons – management, staff or priority changes, for instance – the momentum falls away. They then have to start again three or four years later. Embedding an asset management culture is the key, but that takes a lot of time. We can have all the required regulation in place, but you really need formalised asset management as part of the fabric of doing business in local government to achieve real improvements.
The larger Australian water utilities, like Sydney Water for instance, are leading the way in asset management. These organisations have been developing their asset management practices over the past 20 to 25 years. Having some regulatory drivers also assists in maintain the momentum. These bigger water industry organisations are probably the closest to best practice.
The leading asset management organisations are always trying to improve and never think they’ve reached the destination. The ones that worry me are the organisations who think completing an asset management plan is all they have to do. The hard work begins after the planning is done. Those organisations will never reach best appropriate practice.