An asset management approach to facilities management

by FM Media
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DR MARK JORDAN, asset management lead at Leighton Contractors, shares how strategic asset management can facilitate the decision-making process and enable informed facilities management decisions.


PAS 55, the British Standards Institution’s (BSI) Publicly Available Specification for the optimised management of physical assets, has become increasingly acknowledged as the default international framework for physical asset management.

Originally released in 2003 and updated in 2008, it has increased in popularity over the past few years, with asset owners becoming more interested in viewing PAS 55 as a mechanism in which they can measure the maturity of a service provider against its framework. When it was originally released, it was written at a more technocratic level for organisations. However, as a specification, PAS 55 was always seen as a pathway to the development of an ISO management system standard that would reflect a global rather than local view of asset management.

The culmination of this work was realised this year when ISO 55001 (Asset Management System) was released. Approximately 23 countries, including Australia and the UK, have been involved in its development, with a number of others acting as observers, such as New Zealand.

The new ISO 55000 suite of standards represents a significant advance on PAS 55 by applying the new ISO standard for a management system standard known as Guide 83 and providing improved opportunity for implementing an integrated management system including ISO 9001, 14001 and 18001.

The most significant change in the ISO standard from the PAS 55 specification is the removal of the constraint of physical asset management. The new standard does not differentiate between asset categories and provides opportunity to integrate the management of all organisational assets in achieving business value.


With the implementation of this new ISO standard, facilities management service providers should no longer conduct maintenance activities without considering the longer-term benefits and return on investment (ROI) for plausible scenarios. This is usually conducted using life cycle risk assessment techniques to determine an optimal solution over a project’s ‘whole of life’ or contract period plus handback.

One of the more significant changes in the new ISO is the introduction of financial analysis improvements and economic analysis considerations to determine the benefits and ROI. This is not just at a facilities management portfolio level, but also across individual projects and down to an asset group. As noted, the asset management process is no longer viewed as being confined to just the physical assets, but also the human, financial, information and intangible assets.

In anticipation of these changes, service providers have been developing new frameworks and project operating models to enable offerings that shift from being primarily maintenance plan management to whole-of-life asset management driven. This enables more cost-effective and efficient solutions through life cycle analysis and other assessment techniques. The development of asset management frameworks, including their delivery models, is now integrating corporate enablers, life cycle and project processes. This integrates a set of transparent criteria anchored in international standards that may directly link back to a client’s framework if desired.

The seven basic elements of any asset management system are: context of the organisation, leadership, planning, support, operation, performance evaluation and improvement.

The fundamentals of the asset management ISO standard remain the same for any asset base, whether the asset is a transportation network, gas pipeline or building. This approach places a greater emphasis on a holistic solution that integrates and creates dependency on the various asset management processes of both parties. The result is that the financial, physical, human, information and intangibles are now integrated in a manner to increase learning and to identify the interdependencies.


Organisations’ business and strategic plans provide the direction and ability to create, maintain or dispose of a facilities management asset portfolio. The strategic objectives contained within those documents identify the outcomes to be achieved within measurable time-frames.

Strategic asset management integrates key relationships between planning and delivery activities. The framework that underpins the decision-making process of those activities is key, as it allows informed decisions and correlation between strategic goals and delivery outcomes. It also acts as the integration mechanism between a singular project and an organisation’s wider portfolio of projects.

The current approach to asset management taken by most service providers can support a holistic framework that permits the integration of all aspects of any project. Strategic asset management is applied within this framework to permit:

  • the strategic intent being applied at the operational level (delivery)
  • policy and processes to provide a known operating environment in which services are being delivered
  • balancing the capital and operational expenditure over any given period (e.g. 20 years)
  • optimising the spend profiles based upon levels of service requirements
  • information technology analysis for financial and non-financial to determine appropriate impact on performance outcomes
  • tracking and tracing, through a performance management framework, the impact of historical decisions and process modelling of proposed decisions and the likely outcomes
  • a defined investment framework to permit the achievement of outcomes such as value for money parameters (e.g. socioeconomic benefits to the community or user base of the project), and
  • balancing of short- and long-term impacts of any decisions (optimal timing of the investment).

A competent level of understanding of any facilities management asset portfolio is essential to determine and sustain asset management at the delivery level. Ongoing management of a portfolio is essential to maintain

knowledge and provide sound and reasonable investment decisions. There are a number of available tools for this purpose, such as benchmarking at the project and portfolio level. This includes benchmarking of financial performance and professional activities that underpin how the project is being operated to ensure the competency and knowledge base is appropriate.

There are a number of basic fundamental levels at which a life cycle analysis should occur. The operating model framework and project model should provide the ability to roll up or down any facility’s financial metrics. The levels at which this should occur are: policy, strategic, tactical, operational, system, sub-system and individual assets.


Asset management is most appropriately applied within a project as the key business or operating model that holistically integrates all aspects.

One area contained within the asset management environment to improve project metrics is operational excellence. In simple terms, it is the philosophy of project leadership that stresses the application of a variety of principles, systems and tools toward the sustainable improvement of the key performance metrics.

Approaches to improve project metrics (i.e. six sigma) are evolving in some areas of industry and are starting to be replaced by alternative approaches such as ‘Lean’ techniques (i.e. lean six sigma). This is a manufacturing-based approach increasingly adopted for infrastructure projects. This considers expenditure of resources for any goal other than the creation of value for the end customer, to be wasteful. A key measure of these metrics can be through the use of ongoing benchmarking indices that assess the overall project operating model for business and technical metrics.

High levels of investment are traditionally required to provide the appropriate asset’s specifications to operate facility asset systems across the life cycle. Sound and effective asset management policies and systems represent a critical success factor for any facility business operating model. For example, any life cycle analysis outputs need to be continually revised and recalibrated if necessary to achieve the cost-effective outcomes. This includes analysis from the individual asset through to the rolled up facility life cycle analysis.

A typical asset management model for a facility or portfolio of facilities would require five distinct, but overlapping phases across the asset life cycle. These are:

  • identification of the need for the asset
  • provision of the asset, including its refurbishment
  • operation and maintenance of the asset
  • continual improvement of the asset management process, and
  • disposal and removal of the asset from the portfolio.

Any model should reflect the specific responsibilities for the acquisition and continuing support of the facility asset base and acknowledge the management actions required. This is from the time the asset’s need is recognised through to being phased out of service.

The primary focus within the operations and maintenance phase is the corrective and preventative maintenance and support of the facility assets. This will ensure it remains in a safe, reliable and serviceable condition and is capable of delivering the required services in support of the overall performance requirements. Activity within this phase includes all maintenance in addition to the development and implementation of any engineering changes and improvements to optimise asset performance.

Many of the activities performed within this phase rely directly on the planning carried out during the acquisition phase for new assets, or equivalent planning and analysis for existing assets. This includes the determination of maintenance and logistical support requirements through to the application of specialised analysis techniques. Supporting requirements such as the provision of documentation, training and facilities to support maintenance and repair actions are critical.

Engineering management, and the document of asset configuration, control and approval of engineering changes represent a key element of the asset management task. This is critical to ensure the engineering changes are properly authorised and controlled. This is for the purpose of maintaining the required controls under the respective Acts to ensure the maintenance and support provisions remain in line with the actual configuration of the asset.


The introduction of holistic asset management for facilities is adjusting the way most organisations’ current methodology is operating. Although most businesses operate within a continual cycle of improvement methodology as per ISO 9001, this takes the next step and integrates a range of management system approaches.

A holistic approach such as this integrates and creates dependency on the various types of asset management. What this means is that the financial, physical, human, information and intangibles are now being integrated to increase learning and identify the interdependencies that will make any business a more cost-effective and efficient service provider. It improves business robustness, efficiency and consistency to deliver services within a permanent cash flow moving window of 20 to 30 years, not just a typical 12-month to three-year short-term view.

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