The Asset Journal, Volume 13, Issue 4
Asset Management is among other things a system that enhances decision making. Not only Technical or Organisational decisions, but foremost Financial and Investment decisions. This is also highlighted by the recent release of the companion Standard to ISO 55001, namely ISO 55010, the Guidance on the alignment of financial and non-financial functions in Asset Management.
Apart from the Investment decisions for the creation of new assets these decision processes are of eminent importance to the replacement timing of Assets. "When is the right time to replace?" is an often and most debated issue on principles that apply. Which objective measures should be applied? Is it technical alone or is it financial? As the Asset Valuation is generally an accounting function, it is natural that accounting rules apply. Here decision making becomes less transparent, at least for many of the Technical personnel trusted with Asset Management. Accounting rules and rule sets are not necessarily the strength of Engineers. Asset Valuation, Current Replacement cost decisions and especially decisions to upgrade with new and digitally controlled Assets or Asset support systems are key questions of today.
Life Cycle costing could be one of the foundations of Investment decisions, as Life Cycle Costing would provide the baseline against which to assess not only current performance but provide the background to understand what was expected of the Asset during its life. But do we really understand the underlying factors leading to the decay of our Assets? My observation is that in many Organisations not only in Australia, Assets are often replaced when they are no longer ‘useful'. Is that the right time to replace?
Articles in this edition refer to some experience in the optimum decision processes. More computing power than ever is at our fingertips and Organisations could use that power to support the Investment decisions much better than ever before. The question is whether this computing power is usefully applied to support the important Investment decisions that are to be made over the life time of an asset? The rule of simplicity should also apply here and while now there are mighty analytical packages available that promise us the Nirvana of effective and optimised management of Asset life cycles, we should reflect on the key ingredient of all these analytics – data. Valid and appropriate data are the life blood of analytics and we often find, to the Data Analysts dismay, that collected data is not really providing useful results. The advantages of the digital era should assist Asset Managers to improve their Investment decisions.
We extend Season's Greetings to all our readers and trust that you will enjoy the 2020 editions of The Asset. Please feel free tp provide your feedback and comments on the Journal.
Editor in Chief