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Value-based Infrastructure Asset Management - an introduction

London Underground case study cropped for AM











Image: Kings Cross Underground Station, London 

Introduction

The ISO family of standards on asset management, published in 2014, brought worldwide attention to through-life management of physical assets, shifting the emphasis from minimising cost to realising value. 

This requires clearer determination of the value realised from assets and how to make value-based asset management decisions.

CSIC has developed an innovative structured approach to specifically help asset owners and operators make such decisions and provide much-needed clarity on determining the value realised from assets from a multi-stakeholder
perspective. 

Taking a value-driven approach 

CSIC has developed a structured methodology which applies a systematic approach that identifies the key stakeholders of the assets (e.g. asset owners, maintenance contractor and the end users), their needs and requirements from the asset, and how these requirements are fulfilled by the effective maintenance policies adopted through the asset life cycle. This ensures that the asset continues to provide the best value for money.

Value mapping tools

The main enabler for the new methodology is the Value Mapping Tool that facilitates easy visualisation of key value elements. The tool provides information regarding key factors that influence the value provided by the asset and also the levers that the asset managers can pull to manage or control the value. 

  • The value map also helps asset managers devise maintenance policies by taking into account the various possibilities and evaluate the best value options. 
  • The Value Mapping Tool will be supported by mathematical modelling techniques to determine through-life costs, risks and performance of the assets. This will help the asset management program to maximise the value to the various stakeholders at the best possible cost.
  • A key benefit of this approach is that it requires asset managers to think systematically about the different ways by which asset value can be managed, and highlights important information necessary to manage the asset.

Value-driven decision-making methodology – a three staged approach

The value-driven decision process consists of three stages.

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Value-based thinking removes the ‘do-what-is absolutely-necessary’ mindset, and promotes innovative thinking to improve value rather than simply minimise cost. It allows the organisation to systematically identify risks and build a sound business case for investment and expenditure. This is particularly relevant, even crucial, to infrastructure, where value is generated for many years after the initial investment. Applying CSIC’s method to value-based asset management positively shifts emphasis from managing the cost of assets to managing the value generated by assets.

Ajith Parlikad, CSIC Asset Management

Downloadable case study