New ISO Guidelines Helps Maximize Asset Value
Local governments continuously strive to maximize the value of their assets to provide better service to the public. Sharing information throughout an organization is a key component in efforts to maximize asset value. Connecting information streams to combine operational and financial data allows governments access to big-picture views that drive better decisions, facilitating effective asset management from acquisition to retirement. Unfortunately, information is often siloed in departments, preventing data exchange. Realizing the importance of strengthening data flow and reducing roadblocks, the International Organization for Standardization (ISO) has published new guidelines (ISO/TS 55010) for asset management that includes financial and operational alignment as a crucial component.
To see how this works in practice, let's look at trucks as an example of how the application of two lenses — financial and operational — creates a comprehensive, holistic view into maximizing the value of any given asset.
Two Lenses are Better Than One
When looking at a truck through a financial lens, you may analyze the costs to acquire, maintain, and use the asset, in addition to the asset book value. Analyzing the truck's acquisition costs, comparing costs to peer assets, and tracking value over time, provides a clear understanding of the financial perspective of a truck. However, this lens does not consider operational issues such as vehicle and maintenance history, or availability.
Looking at the vehicle through an operational lens lets you focus on asset maintenance, condition, availability, downtime and failure tracking. This lens allows you to review guidelines to help maximize the vehicle's lifespan, condition, readiness, and the support services needed throughout maintenance. However, this lens does not take into account various financial costs.
Both lenses have blind spots therefore, aligning the two allows for both operational and financial considerations to be a part of every asset management decision — providing a more accurate look into the value of both the vehicle and the impact it has on the organization as a whole.
A Holistic Project Management View
Looking at both financial and operational costs is also vital to understanding assets in relation to infrastructure projects. For example, an infrastructure project to replace a bridge would need to look at maintenance costs across its projected lifespan as well as project replacement costs. Ascertaining the timing of replacement to maximize the value of an existing bridge and its replacement requires careful data analysis of both operational costs and budget projections.
Collaboration is made possible, in part, through data systems that seamlessly share information across government departments.
To achieve this flow of data between the operational and the financial and throughout departments, organizations need:
In short, a successful system allows the flow of key information to the people who need it by breaking down barriers. Deploying a software solution that enables data integration is the foundation of an aligned system that helps organization get the most value from its assets.
To learn more about how aligning operational and financial systems helps maximize asset value, download the white paper: Align ERP & EAM to Maximize Asset Value.