A Life in Asset Management

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Nov 18, 2013 (3 years and 9 months ago)

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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
seen

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

Knowing

AM History is the KEY to
Professionalism


join me in
discovering it

We have been here before

It is never exactly the same

Therefore

we must ADAPT rather than
ADOPT

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
worth?

Mid 1980s


Mid

1990s


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


we
don’t even have all
the questions
!

Mid 1980s


Mid1990s



The major concern was
VALUATION and
DEPRECIATION


driven
by the need to put
assets in the balance
sheet

Mid 1980s


Mid1990s



Calculating depreciated
values required co
-
operation between
engineers and
accountants

Mid 1980s


Mid1990s



AIS


Both engineers and
accountants wanted to
establish asset
information systems


but for different
reasons


Mid 1990s


Mid 2000s


We projected renewal
requirements on a
status quo basis



Mid 1990s


Mid 2000s


We focussed our
attention on risk and
reliability



Mid 1990s


Mid 2000s


We

were mostly asset
centric



Mid 2000s
-

?


Many more players in
the field


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

Mid 2000s
-

?


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


Mid 2000s
-

?


The major challenge is
affordability


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

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


D
ata

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


getting
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
evident


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
sufficient


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
field


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
accuracy


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
community


AM is becoming professional



are you?



Universities teach principles and current
practice.


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
e



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
at
www.amqi.com


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


www.amqi.com



THANK YOU!


To find out more

www.amqi.com