Why Asset Management

Reasons for Asset Management

Over my time in local government I have come to the conclusion that there are two main reasons for asset management;

  1. To fulfil legislative, reglatory, audit and reporting requirements
  2. To strive to ensure assets are managed in the most cost effective & ratepayer acceptable way possible

Fulfilling legislative, reglatory, audit and reporting requirements

To fulfil their legislative, regulatory, audit and reporting requirements Councils need to:

  • discover and document what these requirements are,
  • set up systems that make satisfing these requirements as simple and as quick as possible.

Discovering and documenting legislative, reglatory, audit and reporting requirements

As with many other asset management related tasks, all Councils need to know what their legislative, reglatory, audit and reporting requirements are, and all Councils within a given state should eventually come up with a pretty similar list of requirements. Surely it makes sense then that all Councils and State Government Departments should be working together to compile a consolidated list of requirements applicable in each state.

I started thinking about this in September 2010, but didn't put a lot of effort in to it. It is something I would like to tackle now - [1].

The fact that Councils are obliged to do certain things, doesn't necessarily mean the effort is worthwhile. Even as we do them we should be asking ourselves how much value there is in the exercise, and be prepared to argue against those requirements if we believe they aren't particularly useful.

If there was a consolidated list of requirements developed, it could not only serve as a checklist for Councils documenting their madatory reporting requriements, but as a focus for an inclusive discussion between all levels of government about the usefullness of these requirements, and about any wasteful duplication of effort inherent in them.

Once a Council has identified what their legislative, reglatory, audit and reporting requirements are, the next step is to try and simplify automate the process of fulfilling those requirements.

What do Victiorian Councils HAVE to do with regard to Asset Management?

Victorian Councils asset management responsibilities are a bit more vague than in some other states.
The term "Asset Management" doesn't appear even once in the Victorian Local Government Act, but the MAV, VAGO and Local Government Victoria certainly encourage Councils to prepare Asset Management Policies, Strategies and Plans and having these documents in place is almost if not absolutely mandatory.

The Consequences of not doing Asset Management

The main consequence of not doing Asset Management is the increased risk of wasting money on inefficient AM practices.

Asset Management Policy, Strategy & Plans

  • Being named and shamed by VAGO or some other government department.

Asset Register

  • Not being able to provide accurate information to Grants Commission, DVC, etc.
  • Not being able to properly value infrastructure assets, which would almost certainly lead to an audit qualification

Asset Management Information System

  • Loss of knowledge when a key person leaves the organisation

Simplifying the process of satisfying mandatory AM requirements.

One way to simplify the process of satisfying mandatory AM requirements, is to set up your asset database in a way that makes it possible to automatically generate reports. An even better way of doing this would be to adopt a common asset data model which I discuss in more detail later.

Managing assets effectively

Once a Council's mandatory AM responsibilities are satisfied, its attention can be turned to coming up with ways of managing its assets more effectively.

Again it is a two step process, a Council should;

  1. document its AM related processes,
  2. attempt to improve its processes & systems.

Documenting Processes

I believe hard-copy manuals and plans are an archaic hangover from the 20th Century that should be phased out ASAP. Even Encyclopedia Britanica has seen the writing on the wall and it recently announced that after 244 years the 2010 hardcopy addition will be its last. - [2]

And what has replaced hardcopy Encyclopedias? Pretty obviously it is web-based encyclopedias like Wikipedia. And in most cases, certainly in the case of Wikipedia the technology making it all possible is the wiki. As Wikipedia has shown wikis are a fantastic way of documenting information, and I believe they are best way of documenting a Councils AM (and all other) processes.

Wikis are superior to hard copy manuals in many ways:

  • They can be edited by many people simultaneously,
  • the most up-to-date version of a page is always available,
  • in most cases multimedia including; videos, slideshows and interative maps can be embeded in a page, not just photos and text,
  • hyperlinks can be included,
  • they are easily searchable,
  • some wikis can read and display content stored in databases,
  • they have excellent versioning tools that record the history of every page, insuring that information is never lost.

Wikis are also a great way of linking and adding context to all of an organisations other AM tools.

Which wiki should you use?

I have used a large number of wiki platforms, but have done the majority of my work in; MediaWiki, Wikidot and Sharepoint. Wikidot is my personal favourite; as it is very flexible and customisable. MediaWiki is really good to, and has the advantage of a familar look and feel and a large user base, because it is the platform behind Wikipedia. It has the additional advantage over Wikidot in that it can be hosted on your own server. Im my opinion Sharepoint is pretty limited compared to the other two, but it does have the advantage of being able to cut and paste content directly from Word. In the end most Wiki platforms will be a whole lot better than a hardcopy document or a series of documents saved in a series of folders or directories, so just use which ever one suits you best.

Improving your processes & systems

If it doesn't result in improving your processes or systems and therefore your outcomes, Asset Management is a waste of time.

I beleive there are at least six things Councils can do to help improve their AM processes and systems.

  1. adopt an open process improvement system
  2. publish generic information publically under a creative commons license
  3. encourage the exchange of ideas
  4. make use of the global mind
  5. adopt a common asset data model
  6. keep informed about the latest technology

Adopting an Improvement System

I used the Australian Business Excellence Framework (ABEF) for a short period during my time at Mildura Rural City Council, and whilst I could see that it had the potential to improve Council business practices, I was a bit disappointed about how old fashioned it was in many ways, e.g. butchers paper and textas instead of wikis. I think its biggest draw back though is that it was a proprietary system, not an open system. With an open system it would be much easier for Councils to share their improvement ideas. An open system itself could also be improved over time through the input of its users.

In any event step one in improving processes, is deciding on a process improvement process, even if it is as simple as this business improvement checklist. Over time the process improvement process can be improved along with all other processes.

Publish generic information publically under a creative commons license

At first glance publishing information publicly doesn't seem like something that will improve processes or systems in any way, but I believe it will for a number of reasons;

  1. Publishing something publicly makes you think very hard about what you are saying,
  2. It allows others to comment on your ideas, and give you feedback about them,
  3. The creative commons license allows other to take your ideas, and improve or modify them, and encourages them to share their new improved ideas with you and others, and keeps the improvement cycle rolling along.

The Local Government & Municipal Knowledge Base is my attempt at bit of leadership in this area. To date there are just over 500 members, and 4250 pages of information on the site.

Encourage the exchange of ideas

One of the first steps in many improvement systems is an idea brain storming session. There are probably more than 100,000 people working in local government in Australia alone. If each person had just one unique idea, that is 100,000 ideas for making local government better. Surely that is a great starting point for improving what we do. And all we have to do is collect and collate those ideas.

Make use of the global mind

If you think 100,000 ideas for improving local government is great, what if we think bigger still? The internet is creating a 7 billion element global brain, and it is getting more and more connected, and more and more useful. We should be doing everything we can to harness the creativity of this "global brain" to help us solve problems, and come up of better ways of doing business and managing our assets.

The Open Government movement has created a fantastic video on the internet, collaboration and the wisdom of crowds, and how they pertain to all levels of government, including local government called called Us Now.

Clay Shirky, one of the people interviewed in the video has also given a great TED Talk on what he has labelled "Cognitive Surplus" that gives a good insight into the global mind and how it can be used.

Adopt a common asset data model

Currently Councils are at the mercy of big software companies that charge an arm and a leg for their software and services, and it is really hard to swap over to a cheaper or better vendor because they each have their own individual data models. If Councils could get together to develop a detailed yet flexible asset data model, and encourage software companies to modify their systems to use that model, it would make swaping from one system to another much easier and force the software vendors to be more competetive. It would also make it easier share information with other Councils and Government departments. It might even enable a snap shot of a Councils data to be uploaded to a central data hub for government departments to analyse as they see fit, without the tiresome task of preparing data returns for the Grants Commision and DVC.

Keep informed about the latest technology & AM practices

There are a number of ways to stay informed about the latest technology & AM practices

Firstly, the IPWEA has set up an Asset Management (AssetMates) web forum, which a lot of Local Government Asset Management practitioners use to discuss AM related issues. This is a pretty good place to keep up with the AM side of the equation, although it would be even better if the ideas and suggestions provided by the users were sumarised and given a bit of context to make it easier to find and use them.

On the science & technology front there are a lot of websites and blogs that concentrate on science & technology, and most of them have an RSS feed. Subscribing to these sites via a news aggregator is a greatway to keep up with what's going on in Science & Technology.

This article for example appeared in my RSS feed just as I was writing this section of the presentation.

The other great way to keep up with Science & Technology is Google+. Google+ is a social network with a really large and engaged science and technology community, that you can use to keep up with current Science and Technology and discuss the issues around them.

Examples of Technology that could have a big impact on Asset Management

Developments in the asset management arena tend to happen fairly slowly, but the advances in areas of science and technology are quite astounding.

As you might expect if you are aware of Moore’s Law there are new developments, in computing, robotics, materials science, energy generation, and the biological sciences nearly everyday, and many of them will have a big impact on local government and how we manage our assets.

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Artificial Intelligence

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