Asset Management and the Value of Data

With the increased interest in asset management, many companies are chasing an asset management certification and neglecting some the basics of their businesses. One example would be not utilizing the proper asset information system to collect the necessary data to manage their assets. One of the major concerns in this area is the lack of support for existing management information systems. For decades CMMS/ EAM systems have been underutilized in most organizations. One of the main reasons for this is the lack of a return on investment in the utilization of these systems. However, that may be changing.

In the Institute of Asset Management’s (IAM) Asset Information Subject Specific Guidelines (SSG) on page 10, the value of asset information is discussed. It is highlighted that studies have shown the impact that asset information has on the efficiency and performance of asset intensive businesses. Organizations operating efficient asset information processes have been found to indirectly spend around 20% of their total annual budget, (both OPEX and CAPEX) on asset information. Businesses with poor asset information processes are found to spend even more, typically as much as 25%.

These figures may appear high, but consider if you include the direct cost of preparing and recording asset information when performing maintenance and overhauls; then the significant hidden costs, such as management and staff time spent searching for information, collating, and processing information from various sources and formats, and perhaps repeating or duplicating the process across multiple business units. The majority of the cost is incurred in the core business processes that are dependent on asset information. If a company can improve the efficiency of how asset information management is performed in the business, it offers a potential improvement for savings which has been estimated to be in the order of 1 to 5% of the total business expenditures. Now this type of information may help raise the priority of properly utilizing an asset management information system.

An even greater benefit can be realized if asset information is used effectively to influence decision-making on business expenditures, such as capital programs to improve asset serviceability or optimum whole life cost decisions regarding maintenance and overhaul choices. Simply stated, the appropriate utilization of asset information will enable the right work to be done on the right asset at the right time. Conversely the lack of reliable asset information can result in poor or suboptimal decision-making which can expose the business to unnecessary cost or risk and adversely affect overall business performance.

In one business vertical, (Utilities) 47% of the executives feel the single most important issue that could improve business performance was the quality and availability of asset and unit cost data. This figure rises to nearly 70% if respondents were asked if they felt asset data was either the most important or second most important issue of the business needed to address. This clearly illustrates the significance of data issues.
A sample of the most basic types of asset data includes:
• Asset information.
o Including the numbers, types, size and purpose of the plant.
• Asset performance and condition data.
• Asset value, unit cost, and refurbishment and repair costs.
• Location information such as grid reference post or ZIP code or operational zone.

Asset information is held in asset registers (typically EAM Systems), while location and connectivity and the network data such as links and material types, are held in GIS systems. Both systems are needed and a degree of integration is necessary. That ensures the GIS holds conductivity, location, and operational boundaries of network/plant while the EAM systems hold the history and service record a particular plants be it unit, pumps, switchgear and transformers of whole facilities, such as pumping stations or treatment works.

Integration of data across systems and the business requires common data structures to be replicated in all major corporate systems. This can be achieved by creating asset hierarchies that define the relationship between tactical asset information and strategic data. The concept, design, and use of hierarchies and the architecture of asset data are some of the most far-reaching decisions utility company can make to increase the effectiveness of the organization.

As organizations continue to investigate the benefits of adopting an asset management strategy, they may find that the benefits are difficult to quantify. This problem could be due to the fact that they do not have the proper asset information to develop this strategy. Perhaps an increased priority of collecting and then utilizing the data typically found in a CMMS/ EAM system will help solve this problem.

Material for this blog was taken from:
IAM’s Asset Information Subject Specific Guidance (SSG)
Asset Management – Chris Lloyd Editor – ICE Publishing
Strategic Asset Management – Deadman – Troubador Publishing

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