The new International Standard ISO 55001 on asset management systems is set to be published in early 2014 and we asked Rhys Davies, the chairman of the committee developing the standard (PC 251) to give us his lowdown on the document.
So, Rhys what is an asset and why would someone need to manage it?
Well, in this new standard we have defined an asset as an item, thing or entity that has potential or actual value for an organization. This is vague, but in fact purposefully so. We wanted to make it clear to everyone that an asset can be anything from tangible and physical items such as rails, trains and vehicles to the more intangible such as the reputation of a company.
All of these things can bring value to a company and need to be well managed in order to make the most of that value.
These are quite diverse things, is managing rails really the same as managing a brand?
There are many similarities yes, and the fundamental principles are the same. If you do nothing with things, and this applies to both a brand and rails, they deteriorate. Their value, or potential value, decreases. All assets need maintaining so although the actions we take to maintain them might be different (e.g. for rails this might be renewing them, whereas for brands it might be choosing to sponsor new events), both will benefit from long term plans and strategies.
Asset management is about knowing what we want to achieve with an asset and how to make it happen, in addition to assessing risks associated with that asset. It is about having a long term strategy.
Most successful organizations and companies have long term strategies, complete with yearly objectives and so on. Why do we need a strategic asset management plan as well?
One of the key things with assets is that their life span can be much longer, or much shorter, than the average strategic plan. A brand's reputation will (hopefully!) outlast a five year plan, as will the physical infrastructure of a railway for example, so the long term strategic asset management plan has to take this longer life span into account and plan for it.
This longer term approach also forces us to get to know our assets much better. We may not always be aware of everything that has value or has the potential to create value for our organization. Identifying assets, what we want to achieve with them and how to get there, requires in-depth knowledge of the asset in question, which can help in operational decision making and an organization’s performance overall.
What are the benefits of using this standard?
The major benefit is of course being able to realize value from your assets, and one of the great things about this approach is that there are many quick wins early on in the process. Some are related to the improved knowledge of assets, as I have already mentioned. In addition, the approach can help improve the relationship with stakeholders. Value doesn't necessarily mean monetary gain and defining what the value is for an asset is often a conversation that happens with people outside the company or organization.
For example, there has been a lot of interest from cities in this standard. The notion of value from a public park will not be expressed in monetary terms and defining it will mean getting closer to those using the public park. This is very beneficial for many organizations.
Who is this standard for?
This standard can be used by many types of organizations and companies, public or private. Everything from a city or local service provider to a supermarket chain can benefit from good asset management.
You have been the chairman of the committee for the past 3 years. What is the most exciting thing about its development?
That the standard is soon finished and will soon be available for use. I was involved in the development of BSI PAS 55 (a British standard concentrating on physical assets) and I have seen that grow up and be adopted in lots of different industries. The ISO route and the inclusion of non-physical assets will open up new markets for that story, where previously companies and organizations wouldn't have used that document. This means we are able to get a good story out to more places - more industries and countries can benefit and we can get more feedback to improve the approach even further.