First published in January 2014, ISO 55000 emerged from earlier work to generate a common language for asset management within an organisation.
Designed, for example, to help technical engineers talk to finance about risk or human resources to engage with operations, this ambition has evolved to enable best practice to transfer between sectors as well as within an organisation.
In requiring ISO 55000 certified organisations to break down their business into core processes and consider long-term strategic goals within that, the standard is also helping critical infrastructure companies, such as energy utilities, to make good decisions based on knowledge and understanding.
Asset management standardsThere are three related standards: ISO 55000, which gives an overview of asset management general principles and terminology, ISO 55001 covers the management system requirements and tends to be the standard that people get certified against, while ISO 55002 is the guidelines for applying and implementing the standard.
However, there are just four central ideas at the heart of ISO 55000. The first is the need for organisations to have aligned objectives.
They should be consistently aligned both top to bottom and across the organisation. During this process, many organisations realise that their objectives are not well aligned, there is internal conflict and that therefore makes it difficult to make decisions.
The second requirement is a set of rules for transparent, consistent decision making that enable businesses to decide where to invest limited financial resources.
A third element is the need to establish a long-term strategic view.
As Rhys Davies, Chair of the ISO/TC251 Committee and President of eAsset Management, explains in the recent Value, Values And Asset Management Decision Making webinar: “Often if you’re an infrastructure organisation, your asset life cycle extends way beyond the business planning cycle or regulatory cycle.
“ISO 55000 forces organisations to take a really long-term view of how they invest in their asset base and how they manage risks associated with their asset base.”
The final key principal of ISO 55000 is the requirement for risk-based decision-making, but from a position of knowledge, rather than business instinct or any other suspect process.
Davies summarises: “You can simplify that down to one, which is ‘If we only had €100 left, what should I spend it on to generate the greatest value to our organisation?’. ISO 55000 forces that thinking into the controls and decision-making process in an organisation.”
Having aligned objectives, established rules of engagement and developed long-term strategic goals, businesses are able to focus strongly on value and values.
Releasing value from a utility assetThe assumption is that assets exist to provide value – a value that can be tangible or intangible, positive or negative – but it is asset management that enables the realisation of value.
As Davies explains: “People argue that an asset may have an inherent value, but you can only realise that inherent value by making a decision.”
Ultimately, the key to effective asset management is how to define value. ISO 55000 can help. By establishing key requirements, including ‘Understanding the needs and expectations of Stakeholders’, the standard forces organisations to determine the stakeholders that are relevant to the asset management system.
This may include shareholders, workers and unions, regulatory and government bodies, customers, consumers and neighbours, for example.
Certified organisations also need to establish the requirements and expectations of these stakeholders with respect to asset management, their criteria for asset management decision making and requirements for recording and reporting financial and non-financial information.
“It’s stakeholders that define value and values,” concludes Davies. “As with all groups of stakeholders, they don’t all have the same point of view. We have very different perceptions of value from government, from regulators, from employees and unions, from investors and from customers.
“As asset managers in the organisation we need to seek balance between all of those.”