Australia has six states: New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania. Similar to the United States, each state widely differs from one another. From geography, politics, economics, and culture, each state widely distinguishes itself from the other. In this respect, policies and practices in asset management are also unique. In 2011, the total economic value of Australia’s built assets exceeded AUD 600 million. Assets could be anything that is integral to the country’s urban and regional development, which is why asset managers are expected to comply with certain policies and practices. The types of assets that may come under a policy would be equipment, land and infrastructure. While each state has incorporated a different asset management policy, this blog will detail how an asset management policy can be made.
What is an Asset Management Policy?
An asset management policy refers to a document which standardises asset planning and management whilst considering how asset support services can be offered in the most appropriate, effective and efficient manner. Forming an asset management policy is integral as it is one of the core requirements of the ISO 55001:2014 certification. In this sense, companies can easily meet stakeholder and legal requirements. It would generally be applicable to a wide range of public officials, Including departmental employees and consultants. A typical guideline would ideally include features and policies related to demand management, whole-of-life management, risk management, cross-agency coordination in delivery, value management and related aspects. In short, it should provide a set of guiding principles, goals, intentions and asset management methods. This allows organisations to effectively and sustainably manage assets whilst adding value to the company. It is important to distinguish an asset management policy from other documents like an asset management stategy or plan. The central goal of the policy is, therefore, to identify the theoretical framework that would be adopted to manage assets best.
Steps for Creating an Asset Management Policy
There are four steps to creating an asset management policy:
- Intent: Individuals involved in this process need to consider the intention of adopting the policy. In this stage, governments can set out expected outcomes, offering a feasible mode to monitor its progress. Consider core values that need to be integrated. For instance, sustainability would be a vital factor that will be incorporated into an asset management policy in this day and age.
- Scope: In this stage, it must be identified what form of assets the policy cover. It will be based on this, for instance, that each person’s services and roles can also be determined. Another way to consider this aspect is to assess how a policy may affect a person, service, or asset. This ensures there is a clear and defined scope which would help to establish expectations and accountability tools.
- Principles: A statement of principles is the starting step to formulating general asset management rules. It is also a way to ascertain how a policy will be implemented in practice. Hence, principles offer the blueprint for asset managers to make key decisions. This can be demonstrated by, for instance, establishing reporting standards and seeing practically they can be assessed.
- Responsibilities: This acts as an accountability mechanism whereby the policy directly identifies who is bound by the relevant rules and regulations specified in the policy document. This would not be limited to asset managers but also contractors, resource persons and more.
Features of a Good Asset Management Policy
Multiple aspects of an asset management policy determine how effective or good it is. Here are a few of them:
The Broader and More General the Policy Is, the Better
It is best to keep a policy as general as possible. This does not mean that a policy guideline should be extremely vague but should offer those accountable under the policy some leeway and flexibility in how they conduct themselves. As implied by the steps of an asset management policy, the finalised guideline would have a level of certainty in terms of its scope, goals and principles. Hence, it is important to strike a balance between having a clearly defined set of standards and not being too restricting the key players involved in the asset management process.
It Should Address the Five Core Questions of the Asset Management Framework
One essential aspect of a good asset management policy is that it must address five key areas. This includes assessing the current state of assets, the level of service each requires, identifying critical assets, calculating minimum life cycle costs and finalising long-term funding. Asset managers will have to use estimates where information is hard to find. Having policies that address these aspects ensures that best practices are upheld. It also forces policymakers to consider realistic aspects, such as what is a sustainable level of service when implementing an asset management policy framework.
Implementing Guidelines for Follow-Up Steps
An asset management policy is not centred on simply implementing a standardised maintenance plan. This is one reason why many countries and even states within Australia have undergone many revisions in their asset management policy. Therefore, a policy is subject to change depending on the evolving industry standards. To ensure the policy implemented is feasible, governments are required to review them. Hence, based on how accurate and effective the asset management policy is, the best form of the policy framework is customised according to the unique challenges faced in each area.
The Importance of Adhering to an Asset Management Policy in the Public Sector
While asset management policies can be incorporated into a corporate culture, ensuring a feasible policy for the public sector is in place is important. This controls governmental standards, regulates best practices, and ensures costs are incurred only when necessary. Any asset manager in the water, wastewater, roading or other industries in the utility sector will directly experience the difference an asset management policy can make when it is implemented. Investing in a powerful technological software suite trusted by city councils in Australia would be useful for tracking the progress and success of the policy.
