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Integrated Strategic Asset Management: Frameworks and Dimensions

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DOI: 10.1007/978-3-319-02493-6_6

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Third International Engineering Systems Symposium
CESUN 2012, Delft University of Technology, 18-20 June 2012

Integrated Strategic Asset Management: Frameworks

and Dimensions

Martin Laue1,2, Kerry Brown1,2, Pascal Scherrer1 and Robyn Keast3

1
School of Tourism and Hospitality Management, Southern Cross University, Australia
2
Cooperative Research Centre for Infrastructure and Engineering Asset Management (CIEAM)
3
School of Management, Queensland University of Technology, Australia

Contact author: kerry.brown@scu.edu.au

Abstract. In this paper we build on the conceptualisation that asset

management is embedded in organisations through the a) temporal, b)
organisational, and c) spatial dimensions as suggested by Amadi-
Enchendu et al. (2007) to characterise asset management in a
comprehensive way. Our research question examines how an integrated
approach to asset management might consider the whole range of
interrelations and interactions of these dimensions. It is argued asset
management should address the operational management of the asset
as well as the strategic management of the asset (time dimension). It
should take the overall organisational management, the technology and
information management, and the human factors management into
account (organisational dimension). In addition the inclusion of the
different management topics which arise from the interaction between
the asset and stakeholders and clients, ecological environment,
industrial sector, and the government is critical (spatial dimension). We
argue that a strategic standpoint for asset management establishes a
framework that includes governance, policy, tactical and operational
aspects that are brought into a comprehensive integrated approach.
Prior research and frameworks have identified the various elements
that need to be considered, however, these models have not addressed
how to operationalise the various levels and have neglected governance
and broader contextual factors in building an asset management model.
The research considers the provision of a coherent framework as a
possible alternative to start to develop integrated asset management
from a strategic point of view. Based on our integrated asset
management approach we present a possible approach to developing a
capability maturity model which addresses all three outlined
dimensions. For the development of such a capability maturity model it
is necessary to define asset management process areas, capability and
maturity levels, and capability and maturity indicators for each process
area.
Keywords. Maturity model, indicators, operationalisation, governance
1 Introduction
Effective and efficient asset management should be core business of any organisation
with significant infrastructure assets. As such, it is not surprising that a plethora of
models have been developed to support organisations in managing their assets and
providing a gauge of how well they are so doing. In recent years, an increased focus
on monitoring and evaluation and benchmarking has further contributed to the
development of maturity models, in attempts to encourage organisations to
continually review and improve their management of assets. However, current models
exhibit a distinct weakness in that they focus primarily on the operational and
technical level and neglect the levels of strategy, policy and governance as well as the
social dimensions. In this paper we build on conceptualisation that asset management
is embedded in organisations through the temporal, organisational, and spatial
dimensions to characterise asset management in a comprehensive way. We describe
the findings arising from a research project funded by the Cooperative Research
Centre for Integrated Engineering Asset Management (CIEAM) with the aim of
developing an integrated asset management capability maturity model. Our research
question examines how an integrated approach to asset management might consider
the whole range of interrelations and interactions of these dimensions.

2 Dimensions of Asset Management

Asset management is ‘the process of organising, planning and controlling the

acquisition, care, refurbishment, and disposal of infrastructure and engineering assets.
It is a systematic, structured process covering the whole life of physical assets.’
(CIEAM 2012). Based on this definition of asset management we examine the
different dimensions in which asset management is embedded to obtain a holistic
view. Amadi-Echendu et al. (2007) highlight five different dimensions (spatial, time,
measurement, statistical, and organisational) to describe the generality of asset
management. From our point of view and as outlined in the following sections, the
time, organisational, and spatial dimensions are sufficient to characterise asset
management in a comprehensive way. Section three then describes the integration of
these dimensions, while section four will focus on the development of a capability
maturity model.

2.1 The Time Dimension of Asset Management

The first dimension in asset management considered in this research is time. The
dimension of time can have two different characteristics. The first characteristic
relates to the different stages of the asset lifecycle (acquisition, care, refurbishment,
and disposal) as derived from the CIEAM definition of asset management. The
second characteristic deals with the planning horizon which is adopted in the asset
management process. This research will focus mainly on the latter aspect. The
planning horizon in asset management extends from an operational point of view
(short term) across a tactical one (middle term) to a strategic perspective (long term).
Historically, the focus of asset management has been primarily on operational
elements such as maintenance actions. Consequently, attention to a strategic
perspective such as policy and governance arrangements that determine, regulate, and
facilitate the operational activities has been lacking (Tywoniak et al. 2008). Non- or
mis-alignment of operational activities with a strategic perspective can lead to sub-
optimal asset performance (Mardiasmo et al. 2008). Thus, it is important to consider
both the operational and the strategic perspectives (we merge the tactical and the
strategic aspects into the strategic) together. Figure 1 shows the two time dimensions
of asset management: (1) strategic asset management and (2) operational asset
management.

Fig. 1. Time dimension of asset management

2.2 The Organisational Dimension of Asset Management

The second dimension in asset management considered in this research is the
organisational dimension. Asset management processes consist of different tasks.
CIEAM’s definition of asset management, describes the tasks of organising, planning
and controlling. Each of these tasks are characterised by their elements:
• an object of the task (in our case the asset);
• an operation of the object (in our case for instance the controlling of the asset);
• an agent;
• work equipment and information; and
• working conditions (based on Hacker (1995)).

To achieve comprehensive asset management, the management of human factors

(agents) and the management of technology (work equipment) and information need
to be considered. These two management areas, expressed by a consistent knowledge
base in the field of technology and information management and effective human
resource development in the field of human factors management, are probably the
most pressing challenges facing asset management (Amadi-Echendu et al. 2007).
Working conditions consist of elements relating to the themes of workplace, work
environment, time, and organisation. The management of these themes relates to
higher level organisational processes which can be summarised as organisational
management and in the context of asset management includes themes like corporate
governance and innovation management. As Figure 2 shows, a holistic asset
management approach should consider technological and informational subjects,
individual and social issues and organisational topics.
 Organisational
Management

Technology and Information

Human Factors
Management

Management
Asset
Management

Fig. 2. Organisational dimension of asset management

In this way the organisational dimension of asset management includes: (1)
technology and information management, (2) human factors management, and (3)
organisational management.

2.3 The Spatial Dimension of Asset Management

The third dimension in asset management we consider is the spatial dimension. This
aspect relates to the degree of consideration of environmental factors in the asset
management process. This dimension ranges from a perspective which encompasses
only management processes relating to the asset itself and the nearest environment
such as performance and condition monitoring, to a perspective which includes the
broad interaction between the asset and environmental factors. We propose to cluster
relevant environmental factors in four groups: (1) stakeholders and clients, (2)
ecological environment, (3) industrial sector, and (4) government. Figure 3 indicates
the different management themes which arise from the interaction between the asset
(management) and these four environmental factor groups.

Asset Management

Asset

Stakeholder Risk and Inter- Governmental

and Demand Sustainability Organisational Regulatory
Management Management Collaboration Framework

Stakeholders Ecological Industrial

Government
and Clients Environment Sector

Environmental Factors

Fig. 3. Spatial dimension of asset management

The interaction between the asset (management) and environmental factors can be
diverse. For example, legislation (environmental factor) may influence asset
management at different stages of the asset lifecycle. Assets may also influence
environmental factors, such as in the example of sustainability management where the
interactions of assets with the ecological system are considered. There are also
interactions where the asset management of an organisation influences and gets
influenced by the asset management of another organisation, such as in the process of
collaboration. Thus the spatial dimension of asset management includes: (1) the
management of the asset itself and the nearest environment; and (2) the management
of the interaction of the asset with environmental factors (stakeholder and demand
management, risk and sustainability management, inter-organisational collaboration,
and governmental regulatory framework).

3 Integrated Asset Management

Integrated asset management not only combines the different dimensions of asset
management into a greater whole, but also considers the whole range of interrelations
and interactions between these different dimensions. Before we look at an integrated
asset management approach, we want to describe the relation of the asset and
organisational internal and external factors.

3.1 The Asset and Organisational Internal and External Factors

The three dimensions of asset management also reflect the relations between the asset
and organisational internal and external factors. The time dimension reflects the core
of asset management which is described in the spatial dimension as the management
of the asset itself and its nearest environment. The organisational dimension reflects
internal organisational factors and processes and their interrelations with the asset and
also with the organisational external environment. The spatial dimension describes
organisational external factors and topics which arise from the interactions with the
asset and with the organisational internal environment. The interrelations and
interactions of the asset, organisational internal factors, and the organisational
external environment are visualised in Figure 4 which is based on the Human-
Technology-Organisation – approach (Dunkel 1996).
The Human-Technology-Organisation approach postulates that humans, technology
and organisation are interdependent and together influence the task or process (in our
case the management of the asset). It is necessary for the integration of asset
management to investigate ‘heavily in the merger of new technical solutions,
management processes and the human factors’ (Woodhouse 2001) and simultaneously
and equally address all three factors in the management of the asset.
However, not only the organisational internal factors need to be considered. The
organisational external factors should also be addressed. The concept of sustainability
management delivers significant insight in these relations. Sustainability management
in asset management is the ability to manage assets in such a way to meet present
needs without limiting the ability of future generations to meet their own needs
(Australian Procurement and Construction Council 2007).
organisational
external
Ecological
Environment

organisational
internal

Organisation

Stakeholders
Asset Government
and Clients

Technology
and Human
Information

Industrial
Sector

Fig. 4. The asset and organisational internal and external factors

Based on the concept of the three pillars of sustainability, economic factors (like
financial interests of stakeholders) are embedded in the society and can’t exist without
it. The economy and society (for instance expressed by cultural interest in the
conversation of heritage assets) are again constrained by the ecological environment
and also cannot exist without them (Scott 2009). Therefore holistic asset management
has to address organisational external factors as well as organisational internal factors.

3.2 An Integrated Asset Management Approach

An integrated asset management approach which wants to be comprehensive has to
consider the whole range of interrelations and interactions of the time, the
organisational and the spatial dimension. It has to address the operational
management of the asset as well as the strategic management of the asset. It further
has to consider the encompassing organisational management, technology and
information management, and human factors management. And finally, it has to
include the different management themes which arise from the interaction between
the asset, the stakeholders and clients, the ecological environment, the industrial
sector and the government. Figure 5 shows the combination of the whole range of all
three dimensions of asset management in an integrated asset management approach.
 Fig. 5. Integrated asset management

3.3 Topics of Integrated Asset Management

The integrated asset management approach was first adopted in a modified version by
the Australian Asset Management Collaborative Group (AAMCoG) in the
development of the ‘Guide to Integrated Strategic Asset Management’ (AAMCoG
2011). The industry-oriented guide was developed in cooperation with the
Cooperative Research Centre for Infrastructure and Engineering Asset Management
(CIEAM) and the Australasian Procurement and Construction Council (APCC). The
guide is backed by an extensive research document (summarising the relevant bodies
of knowledge) with detailed supporting information on the topics of the guide. The
guide addresses an important gap in existing asset management models by introducing
governance and strategic topics as well as human, social and organisational issues into
asset management (Laue et al. 2011). Table 1 describes the process areas grouped by
management areas and listed against the three dimensions of the integrated asset
management approach. These process areas were developed in cooperation with
members of AAMCoG, CIEAM and the APCC during the development of the guide.
 Table 1. Process areas of integrated asset management
Dimensions Management Areas Process Areas
Asset Governance
Asset Management Policy
Asset Management Strategy
Strategic Asset
Asset Management Plans
Management
Asset Performance Measurement
Management Reporting
Review, Audit
Operational Management of Planning, Design, Creation,
Time Acquisition
Operations Management
Maintenance Management,
Operational Asset Incident Management
Management Facility Management
Performance and Condition Monitoring
Continual Improvement
Operational Management of Renewal, Refurbishment,
Shutdown, Disposal
Corporate Governance
Corporate Policy
Organisational Corporate Strategy
Management Strategic Management (Strategic Analysis Techniques)
Innovation Management
Financial Management (Accounting Techniques)
Data Management
Technology and
Organisational Document Management, Asset Register
Information
Information Systems
Management
Knowledge Management
Competence Management
Leadership
Human Factors
Communication
Management
Organisational Culture
Change Management
Stakeholder and Stakeholder Management
Demand Management Demand Management
Risk and Sustainability Risk Management
Management Sustainability Management, Social Procurement
Spatial
Inter-Organisational Collaboration (Cross-Organisation, Cross-Government)
Collaboration Contract Management, Private Provision
Governmental Government Policy Framework
Regulatory Framework Legislation

4 An Integrated Asset Management Capability Maturity Model

A capability maturity model is an approach to appraise and improve processes in
organisations through the description of an evolutionary path from immature
processes to mature processes. Two different representations are used to achieve this;
the continuous and the staged representation. The continuous representation uses
capability levels to improve processes of an individual process area or a group of
process areas. The staged representation uses maturity levels which represent a pre-
defined set of process areas and so describe a path for improvement for the entire
organisation (Carnegie Mellon Software Engineering Institute 2006). The following
sections describe the integrated asset management capability maturity model under
development through the CIEAM program ‘AMCaMM’ (Asset Management
Capability Maturity Model).

4.1 Development of an Asset Management Capability Maturity Model

The first step in the development of a capability maturity model for (integrated) asset
management is the definition of asset management process areas. The second step is
to define capability and maturity levels. The third step is to define the capability
indicators for each capability level for each process area (continuous representation)
and the maturity indicators for each process area (staged representation). With the
assumption of five capability and five maturity levels, Figure 6 illustrates the
continuous representation of an asset management capability maturity model and
Figure 7 presents the staged representation of an asset management capability
maturity model.

Fig. 6. Continuous representation of an asset management capability maturity model

 Fig. 7. Staged representation of an asset management capability maturity model

To combine the continuous and the staged representation it is necessary to define the
capability levels of the process areas of the continuous representation which have to
be fulfilled to get to the next maturity level of the staged representation. Table 2
illustrates this relationship.
Table 2. Combination of continuous and staged representation
Asset management process Capability level to
Maturity level
area fulfil
1
A 2
2
B 2
C 3
3
D 3
E 3
4
F 3
G 3
5
H 3

4.2 Appearance of an Asset Management Capability Maturity Model

In regard to the first step, the definition of asset management process areas, the areas
described in Table 1 provide a basis for further discussions. The segmentation and
classification as well as the suitability for a capability maturity model of the different
process areas should be discussed.
In relation to step two, the definition of capability and maturity levels, we examined
different capability maturity models, especially in the field of asset management
(physical asset management, information technology asset management, information
asset management, intellectual asset management, and general management). In these
models the levels of the capability and maturity levels range from zero to six. Three
models use a range of six levels, 13 models a range of five levels, and three models a
range of four levels. As a result, it is proposed to develop a range of five levels as
described in Table 3. The definition of capability and maturity indicators will then
inform the development of indicators in step three.
Table 3. Levels of maturity and capability
Level Name Description
The processes are performed in an unscheduled way and are not documented,
1 Performing
analysed, standardised, integrated, or optimised.
The purpose of the processes, input and requested output, the necessary
2 Analysing workflow and information, other process agents and their roles, and required
work equipment are documented and analysed.
Process-elements such as input and output, workflow, information, roles, work
3 Standardising equipment, and process conditions are clearly stated and are standardised. These
standardised processes provide consistency for all process areas.
The different processes are integrated in an overall approach and comprehensive
4 Integrating
organisation functions are implemented.
The processes and their elements are continually improved through analysing,
5 Optimising
standardising, integrating, and optimising.

In summary, we argue that a strategic standpoint for asset management establishes a

framework that includes governance, policy, tactical and operational aspects that are
brought into a comprehensive integrated approach. Prior research and frameworks
have identified the various elements that need to be considered, however, these
models have not addressed how to operationalise the various levels and have
neglected governance and broader contextual and social factors in building an asset
management model. This research establishes a coherent framework as a possible
alternative to start to develop integrated asset management from a strategic point of
view. Based on our integrated asset management approach we present a possible
approach to developing a capability maturity model which addresses all three
dimensions. For the further development of such a capability maturity model it is
necessary to define asset management process areas, capability and maturity levels,
and capability and maturity indicators for each process area.

5 References
Amadi-Echendu, J., Willett, R.J., Brown, K.A., Lee, J., Mathew, J., Vyas, N., Yang, B-S.
(2007) What is Engineering Asset management? In Proceedings 2nd World Congress on
Engineering Asset management and the 4th International Conference on Condition
Monitoring, pp. 116-129. Harrogate, United Kingdom.
Australian Asset Management Collaborative Group (AAMCoG) (2011) Guide to Integrated
Strategic Asset Management.
Australian Procurement and Construction Council (2007) Australian and New Zealand
Government Framework for Sustainable Procurement.
Carnegie Mellon Software Engineering Institute (2006) CMMI for Development, Version
1.2. Pittsburgh: Carnegie Mellon University.
CIEAM (2012), http://www.cieam.com/site/2/about-us. (last accessed on 25 February
2012).
Dunckel, H. (1996) Psychologisch orientierte Systemanalyse im Büro, Bern: Hans Huber.
 Hacker, W. (1995) Arbeitstätigkeitsanalyse - Analyse und Bewertung psychischer
Arbeitsanforderungen, Heidelberg: Asanger.
Laue, M., Brown, K.A., Keast, R. (2011) Strategic and human issues in asset management
models. In Proceedings 6th World Congress on Engineering Asset management, Cincinnati,
Ohio, USA.
Mardiasmo, D., Tywoniak, S., Brown, K., Burgess, K. (2008) Asset management and
Governance – An Analysis of Fleet Management Process Issues in an Asset-intensive
Organization. In International Conference on Infrastructure Systems: Building Networks for
a Brighter Future. 10 – 12 November. Rotterdam, Netherlands.
Scott, C.M. (2009) Green Economics. London: Earthscan
Tywoniak, S., Rosqvist, T., Mardiasmo, D., Kivits, R.A. (2008) Towards an Integrated
Perspective on Fleet Asset management: Engineering and Governance Considerations. In:
Jinji, G., Lee, J., Ni, J., Ma, L., Mathew, J. Proceedings 3rd World Congress on
Engineering Asset management and Intelligent Maintenance Systems Conference (WCEAM-
IMS 2008): Engineering Asset management – A Foundation for Sustainable Development.
pp. 1553-1567. Beijing, China.
Woodhouse, J. (2001) Asset Management. John Woodhouse Partnership Ltd.

6 Acknowledgements

This paper was developed within the CRC for Infrastructure and Engineering
Asset Management, established and supported under the Australian Government’s
Cooperative Research Centres Programme.

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