he enters the coffee shop, he sees Jerry sitting at a table in the far corner next to a large window. He must have seen him when he drove in. Actually, maybe he did not notice him, as he seems to be deeply immersed in reading something on his laptop, and he has a stack of papers next to him.
“I see that you have been killing a few trees. Think about sustainability, my friend,” Darren says as he stands right in front of Jerry’s table. “So what have you found out, and how is Mouroum Inc. coping with asset management and its governance framework?” Darren asks.
Darren actually startled Jerry, as he suddenly looks up almost toppling his laptop.
“Good evening, sir,” Jerry greets him. Jerry has always been a very respectful and polite gentleman, and that is maybe why Darren likes him so much. Darren finds it very difficult to turn him down and not respond to his request for help, even though he is himself running around like a headless chicken.
Darren takes a seat at the table and puts his bag on the vacant chair next to him. Jerry orders two coffees and then starts providing Darren with an update on his progress.
“First of all,” he starts, “you were right in saying that there is a ton of information out there available on the internet. I can see that there is a broad range of asset management approaches and methodologies, varying in complexity and sophistication, that are in use in different industries and organizations.”
“Yes,” Darren nods. “However, while there are existing pockets of best practice, it is recognized that a more consistent approach to the management of physical assets will yield significant benefits. Therefore, organizations are recommended to adopt a corporate approach to the physical asset management framework spanning across the whole organization.”
“What do you mean by that?” Jerry asked. “I mean by a ‘corporate approach’?”
“What I mean,” Darren starts to explain, “is that the approach must be blessed, endorsed, and championed from the top to the whole organization. It does not matter the size and complexity of the organization, but if organizations recognize and agree for the need of an asset management program, then the commitment has to come from the top down. No matter if it is called corporate or not, but the commitment and buy-in must be there. Otherwise, it will be another of those initiatives that fizzle out after some time without any accomplishments. The ultimate aim is to develop and implement consistent asset management approaches across all functions and departments of the organization.”
“This is exactly the challenge I am facing in my job at this moment. I am having a hard time getting our asset management program started, and there is no buy-in,” Jerry exclaims.
Darren drinks a sip of his hot coffee and says: “I understand what you are going through, and I would advise you take a well-calculated approach as you are about to take your organization on a long transformational journey. You’ll definitely want to get off to a good start.”
Step 1: Develop an Asset Management Governance Framework
“The first step I would recommend to you is to start developing an asset management governance framework. Too many times we see organizations diving into projects or programs focusing on short-term gains only. They do not bother to have a framework or structure in place to sustain the long-term outcomes of what was started. The result is that either the project or program does not deliver expected outcomes, or it just dwindles over time and loses momentum or interest. If you want to build a long-lasting physical asset management system in your organization, a governance strategy is the foundation piece that I recommend you start with.”
Jerry looks excited, and he starts taking notes on his laptop as Darren speaks.
“The governance framework will be a key component of your physical asset management system that will ensure consistency in asset management strategies across the organization via the adoption of policies, practices, procedures, templates, and standard tools,” Darren explains. “A governance structure provides effectiveness and efficiency by constantly sharing reliable and relevant information in the asset management decision-making process through a standard approach and formal definition of asset management roles and responsibilities. The governance framework takes into account both the short-term delivery and the longer-term asset management system sustainability. The key objectives for an asset management governance framework can best be described as follows:
• To provide an organizational design that will strategize implementation of a physical asset management system
• To provide an organizational design that operationalizes integrated and comprehensive asset management practices across all functional areas
• To provide clear strategic roles and responsibilities for staff involved to enable and facilitate the transformation process as required
• To ensure consistency in asset management concepts and practices across the whole organization at the strategic, tactical, and operational levels”
“How do I get started with developing such a framework?” Jerry calmly asks. “I think this is what is missing in our organization, where I am constantly struggling to pull everyone together to dedicate time to work on the asset management program.”
“In Chapter 12 of my book, I talk about ‘ownership’ and the ‘ideal organizational structure’ to lead the implementation of and maintain a physical asset management system. It also elaborates on three different governance models and does mention the fact that a lot will have to do with the context of your organization. First of all, you will have to understand the external and internal context of your organization: What are the social, cultural, political, legal, financial, economic, and environmental factors having an impact on the strategic objectives of the organization? What are the organizational culture, values, size, complexity, policies, strategies, and capabilities driving the needs for a physical asset management system?”
Darren watches Jerry type on his laptop as he takes a swig of coffee.
“Then you will need to identify the stakeholders relevant to your organizational physical asset management system and understand their needs and expectations,” Darren says. “Make sure you consider both internal stakeholders such as the shareholders, owners, different departments, functional areas, and employees, in general, as well as external stakeholders such as customers, users, suppliers, contractors, regulatory authorities, and other agencies.”
Darren takes a pause and adds, “Mind you, the lists I mentioned to you are just examples. I would suggest you have a few sessions with your team at different levels in your organization to brainstorm and come up with a list of external and internal factors that would define your organizational context, as well as a list of applicable external and internal stakeholders with their needs and expectations.”
“This looks like quite a lot of work!” Jerry exclaims. “It will take quite some time to get this done.”
“I couldn’t agree more,” Darren continues. “I can guarantee you, though, that it will be time and effort well spent. At the end of this exercise you will get a pretty good idea of the context of your organzation, and, on top of that, you will have started engaging key stakeholders in the process. You will be able to recommend a governance structure that will fit your context. The governance model chosen will have to provide stakeholders with the necessary autonomy and flexibility to interpret, adopt, and implement physical asset management approaches and practices into their existing activities.”
Darren
