Principles of Asset Management

What this module covers

Module 1 carries 20 of the 60 questions, a third of the paper, so it rewards preparation more than any other single module. Most of the marks are for precision rather than insight. The examiner wants to know whether you can tell apart terms that sound alike when you are under time pressure. Treat it as a glossary you have to be able to use, not a chapter you have to be able to summarise.

Assets, asset management and the asset management system

An asset is anything with actual or potential value to the organisation. The test is value. Physical form doesn't settle it, purchase cost doesn't, and neither does appearing on the fixed asset register. A spare pump sitting in a warehouse is an asset. So is a data set, or a piece of software. The accounting definition is narrower, and the gap between the two turns up in questions.

Asset management is the coordinated activity of an organisation to realise value from its assets. Two words in that definition do most of the work. Coordinated means that one depot doing excellent maintenance on its own is good maintenance, not asset management. Value means that activity which can't be tied to value is just cost.

An asset management system is something else again: the policy, objectives, processes, plans, people and governance that an organisation uses to direct its asset management. It is not software. Candidates lose marks every sitting by equating the system with a maintenance package.

The four fundamentals

ISO 55000 names four ideas that underpin the whole discipline, and you should be able to recognise each one from a short scenario.

• Value. Assets exist to deliver value against organisational objectives. They are not preserved for their own sake, and value need not be financial.
• Alignment. Decisions and plans lower down are demonstrably driven by the objectives above them.
• Leadership. Top management sets direction, provides resources and makes the culture possible.
• Assurance. The organisation can show that its assets and its system are fit for purpose. Saying so is not enough.

A common question describes an organisation getting three of these right and asks you to spot the fourth.

Line of sight and the document hierarchy

The organisational plan says what the organisation is trying to achieve. The asset management policy states the principles that follow from it. The strategic asset management plan (SAMP) turns organisational objectives into asset management objectives and sets the approach. Asset management plans then specify the activities, resources and timescales for particular assets. Line of sight is the traceable connection along that chain, in both directions. You should be able to take any task back up to an objective, and any objective down to the work that delivers it.

The standards and frameworks

Know which document does what. ISO 55000 gives the overview, principles and vocabulary. ISO 55001 sets the requirements a system is assessed against. ISO 55002 gives guidance on applying them. PAS 55 was the BSI specification that came before the series. Alongside these sit the GFMAM Asset Management Landscape, which divides the discipline into subject groups, and the IAM Competences Framework, which describes what individuals need to be able to do. ISO 31000 covers risk, which Module 4 picks up.

Where marks are lost

• Treating an asset management system as a software product
• Confusing the policy, the SAMP and an asset management plan
• Assuming an asset must be on the fixed asset register, or in service, to count
• Believing that contracting out work transfers accountability for the risk. It doesn't: the organisation must keep control
• Mixing up which part of the ISO 55000 series sets requirements and which gives guidance