A Life in Asset Management


Nov 18, 2013 (4 years and 4 months ago)


A Life in Asset Management

Dr Penny Burns

Editor, AMQ International’s

“Strategic Asset Management”

Today more is being

asked of asset
managers than ever before

To succeed, you need to be

and to be

to be

a professional

Professionals are respected, rewarded,

listened to

they make a difference

To be a

professional you must
demonstrate a knowledge of what has
been done before

why, and whether
it will work today


AM History is the KEY to

join me in
discovering it

We have been here before

It is never exactly the same


we must ADAPT rather than

We have been here before

Let me take you on a brief tour

of the last 30 years

We were ignorant but we
knew it. We sought to
establish the facts. We
asked: what did we
have? what condition
was it in? what was it

Mid 1980s



Having recorded our
assets we thought we
knew all the answers
and set about telling
others: we focussed
on renewal forecasts
and demands for
‘backlog’ maintenance

Mid 1990s

Mid 2000s

Mid 2000s


The increasing
complexity of asset
management issues
is making us aware
that we don’t have all
the answers

don’t even have all
the questions

Mid 1980s


The major concern was

by the need to put
assets in the balance

Mid 1980s


Calculating depreciated
values required co
operation between
engineers and

Mid 1980s



Both engineers and
accountants wanted to
establish asset
information systems

but for different

Mid 1990s

Mid 2000s

We projected renewal
requirements on a
status quo basis

Mid 1990s

Mid 2000s

We focussed our
attention on risk and

Mid 1990s

Mid 2000s


were mostly asset

Mid 2000s


Many more players in
the field

not only
engineers and
accountants but
economists, lawyers,
urban planners,
scientists, regulators
and the community

Mid 2000s


With the new players
come new directions:
a service focus,
productivity, financial
and environmental

Mid 2000s


The major challenge is

are the
benefits of assets
worth what we have
to give up to get

The issues we dealt with in the 1980s,
the 1990s, the 2000s are still with us

but they are not exactly the same

Recording, Valuing,
Depreciating Assets

When there were no rules, decisions
were taken to advance AM. (accrual
accounting, replacement cost,
modern equivalent assets, and in NZ,
condition based depreciation)

Now there are established standards and
more regulation

There is more data but with it has come
the demand for more justification

Data quality is now as important as data
quantity used to be

Recording, Valuing
Depreciating Assets

Renewal, Risk, Reliability

The issues used to be


gathering and

Consistent measurement

Renewal, Risk, Reliability

Technical measurement issues now
largely dealt with, interest moves to
the strategic issues

Renewal is no longer axiomatic, it has
to be justified

We have more data but not necessarily
more knowledge, interest is therefore
moving to data analysis

meaning from data

statistics is
becoming critical for asset managers

Sustainability, Productivity
and Affordability

Issue used to be

Getting persuasive measurements
of ‘backlog’ and renewal to support
financial bids. The question of
whether this was affordable hardly
ever arose

Sustainability, Productivity
and Affordability

With better data the current
unsustainable position is more

and we are expected to do
something about it!

Productivity improvement was once
a talking point, but is now essential

We once thought just measuring
renewal costs was sufficient

it no
longer is.

We have to ADAPT not merely ADOPT

Circumstances Change

Adopting earlier solutions is dangerous

Benchmarking used to be about being
‘as good as’

that is no longer

What used to work will not necessarily
work now

More is now expected of us and
previous solutions will, in many cases,
be no longer ‘good enough’

Changing Circumstances require
Adaption rather than Adoption

We need to know more than what
has been done in the past

we need
to know why, under what
circumstances and with what results

We need to know more than how
our assets work

we need to know
what is driving demand for them

There are now more players in the

we need to know not only
engineering requirements of assets
but those of the other players

Record Keeping

Change is ongoing, records have to serve
the needs of future change

Greater regulation means greater need
for detail and relevant degrees of

With more players in the game, records
need to be able to be expressed in ways
which are meaningful for regulators,
other professionals and, increasingly, the

AM is becoming professional

are you?

Universities teach principles and current

But few, if any, teach the history of AM

If we only know the present, we are but
tradesmen, to be a professional means
understanding the development of asset
management so that we can change as
circumstances change

Where do we find the story of

Asset Management?

AM is becoming more complex

Complexity is difficult

It is easier to understand if we first start with
something simple and move up

Asset Management was simple once, about 30
years ago, so start ther

Understand the issues at the beginning and
why they needed to change

Protect Yourself

Those who do not know the past try to
reinvent it!

“The further back you look, the further
forward you can see” Churchill.

An invitation

Join me and many others in exploring our
common past

Read the ‘how I got started in AM’ stories
from other Asset Managers and add your own

Think about the AM developments that have
taken place in your organisation

Contact me to join a history discussion group

Even better

Subscribe to “Strategic Asset
Management” and follow the
developments of asset management as
they happen



To find out more