Bruce Lee statueCredit: Image by tee2tee from Pixabay

Bruce Lee once said: “Absorb what is useful, discard what is not, add what is uniquely your own.”

The idea of constantly researching and refining his own experience was key to Lee’s way of life. As it is with the advent of IoT, high speed communications, mobile field tools, and other business and operations enablers, modern utilities are refining how they work by learning from asset performance, as are other heavily capitalized businesses that depend on their assets.

While some companies may view assets as things that consume operations expenses, they probably view asset management simply as work maintenance. In reality, asset management is the coordinated activity of an organization to realize value from assets.

Success comes from coordinating specific activities and using that coordination to build a framework for coordinating other activities. How do you optimize asset performance and improve situational awareness so that you can improve your decision-making processes? Building new IT systems can help automate processes but data quality and information management are the foundation for making all this effective.

Key Takeaway

Topics that are at the top of the priority list for many utilities are improved decision-making, risk management, asset management, system performance, and digitization but the key to effective realization of these goals is good information management.

Performance Measurement for Assets and the Asset Management System

The following diagram depicts performance measurement for both assets and the related Asset Management System. Asset health and performance management are both becoming increasingly important as utilities and other companies try to extract maximum value from their assets. This means delivering value to customers and that in turn means learning from prior failures, understanding trends in health and performance and the links between them. This is achieved by developing measures to enable a move from being reactive to proactive by being able to forecast health and performance while using sensors and inspections to validate those projections.

By creating both leading and lagging indicators and monitoring both against asset health and performance, we are able to create a closed-loop system that enables continuous improvement. This helps to eliminate uncertainty and nasty surprises while creating a more solid foundation for future capital and operational investment planning.

Figure 14 in the Institute of Asset Management (IAM) publication: “Asset Management – an Anatomy”.
© 2019 The Institute of Asset Management – reproduced with permission
Asset Management System

It begins with the Asset Management System (AMS), which is defined by the Institute of Asset Management (IAM) and the ISO 55001 Management System standards as a system of direction and control for asset management that complies with the following seven multidimensional requirement areas:

  1. Defining the organizational context
  2. Leadership commitment and direction, and roles and responsibilities
  3. Multilevel planning for assets and asset management
  4. Support for effective management resources (including competence), tools and information
  5. Operational control of the management system and dependent asset systems
  6. Evaluation of the performance of the management system and dependent asset systems
  7. Improvement, including correction and prevention in a quality-process environment

The “system” in AMS is not a software package. It refers to a collection of policies, procedures and supporting systems that provide the necessary components for an organization to perform its asset management activities and realize its goals. Each of these seven requirements are supported by between five and 20 “shall statements” to provide the detail for each requirement. Furthermore,Clause 2.4.3 of ISO 55000 … states that: ‘An asset management system is used by the organization to direct, coordinate and control asset management activities. It can provide improved risk control and gives assurance that the asset management objectives will be achieved on a consistent basis. … [from  IAM’s publication “Asset Management – an Anatomy” Section 3.2 ]

In this article, we have chosen to focus on requirement No. 6: Evaluation of the performance of the management system and dependent asset systems, specifically the performance of the asset systems.

Process Maturity

The AMS must be suitable for the underlying assets and the level of process maturity. If the underlying assets are simple, less risky — e.g., noncritical or with redundancy built in — and inexpensive, the related asset management processes and AMS should reflect that. Conversely, if the underlying assets are complex, have interdependencies and high impacts of failure and are expensive, the asset management processes and related AMS should be suitable for managing the higher risk and costs of those assets.

Organizations differ in scale and sophistication and, in terms of asset management, some may be relatively mature while others are at the beginning of the journey. Accordingly, there is flexibility for each organization to adopt its own fit for purpose approaches and solutions that are economic, viable, understandable and usable.

For example, if a utility is responsible for managing a small utility-scale solar farm, the processes and AMS for those assets would be less complex than those required for managing a nuclear power plant. The level of state and federal regulations would also be much greater for the nuclear plant, requiring greatly increased risk and management controls.

Asset risk profiles change over time with the addition of new assets or the deterioration of the condition of existing assets. When this occurs, asset management processes and the AMS should accommodate these changes (and anticipate them) to reflect the corresponding changes to risks and costs, bearing in mind that changes in risk can create opportunities as well as potential liabilities.


The ISO 55000 standard has developed the following definition for an asset: “an item, thing or entity that has potential or actual value to an organization.” For a “wires” utility, actual assets are the different types of equipment that are installed and operating on its transmission and distribution network (i.e., transformers, breakers, capacitors, conductors, etc.), while assets of the same types stored in a warehouse waiting to be put into service have potential value for when they are installed and actual value as contingency against unexpected failures.

For a “wires” utility the following diagram depicts the information systems and information needed for asset management:

While the above examples are not exhaustive, they give a good representation of the asset management information systems and information typically used by most utility companies.

In studying this list, one can see that asset management information systems and information are enterprisewide — they are not confined to just one department or group within a utility company. Asset management requires information from multiple departments, including Human Resources, Finance, Risk Management, Customer Service, Billing, Information Technology, enterprise GIS and Transmission & Distribution (T&D) Planning, Operations and Maintenance. If a utility also has generating plants, add Generation Planning, Operations and Maintenance to this list as well. Asset management is truly an enterprisewide endeavor for utility companies.

As an enterprise service, asset management also requires enterprise data management. As the above diagram indicates, business information for asset management comes from multiple departments and groups within a utility company and needs to be shared between departments. In order to manage this information properly, utilities have to take an enterprise-wide view of all information created, received, updated and deleted (i.e., CRUD analysis: create, read, update, and delete, which are the four basic functions of persistent storage and may also used to describe user interface requirements) by asset management processes within the utility.

This enterprise view of data management will be more fully addressed in the next article.