Disciplines of RM >

 Infrastructure Asset Management

With regulations imposed on major utility and infrastructure companies, Asset Managers are now having to make investment decisions based on the assessment of and management of risk in determining whether assets should be maintained or replaced.

Benefits that Risk Management can bring to Infrastructure Asset and Facilities Management:

• Increase asset life and serviceability. Better understanding of high cost areas in asset management such as maintenance, refurbishment leads to efficient cost control.
• Revenue enhancement due to higher production rate. Cost reduction through “smart” expenditure.
• Accurate forecasting of future cash flows and associated risk mitigation. Understanding of the effect on related portfolio return and portfolio risk.
• Reduce downtime. Extend asset life and reduce fixed asset replacement investment cost .
li>Whole life analysis (promoting long term business objectives over short term issues) to ensure sustainability, long term returns, steady growth, progressive improvement without surprises.
• Optimal balance of spend and benefit (considering maintenance enhancements, renewal timings, cross functional factors) to ensure all assets relating to delivery of service are considered.
• Discovery of enhancement opportunities during the conceptual and design phase rather than later in the life where the cost of change is much higher.
• Assistance in developing inspection strategies, reporting and monitoring practices to achieve high technical integrity.
• Increase compliance (e.g. Regulatory requirements, PAS55, Company Policies/Procedures).
• Risk occurrence/incident trends/metrics (asset condition, performance, cost base, retained risk, revenue generation, failures).
• Better response to asset failure (ability to restore service through risk based contingency/fallbacks) ensuring business continuity.
• Extend assets operational, maintenance and inspection capabilities.
• Understand how key issues impact asset’s revenue, cost and risk management and recognize areas of exceptional and poor performance.
• Identify opportunities for improvement through a combination of protocols and hypothesis generation.
• Develop the basis for performance improvement strategies.
• Determine how risk management strategies might improve today’s performance level to future expected levels.
• Assessment of impact of risk on safety and asset integrity. Asset vulnerability (increased visibility of risk associated with asset condition and intrinsic design). Better understand asset contribution to business performance.
• Improve visibility of effective governance (increased confidence, improved likelihood of securing funding from government and the markets, increased customer patronage, lower corporate insurance premiums).
• Strategic decisions can be made using an appropriate level of detail relating to performance, condition of assets, costs, serviceability to determine where investment will add the greatest value, prior to any significant investment taking place.
• Assess the viability and lifecycle profitability before any significant investment has been made (evaluating a proposed investment by considering changes in the company’s cash flow can aid the decision as to whether or not an investment in an asset adds value over time).
• Better evaluate the viability of opportunities before any significant investment is made (considering the large outlay of capital for new assets, typically offset by high future revenue streams).
• Better understanding of risks associated with change (risks of maintaining the status quo, risks associated with change, residual risks following change).
• The implications of unplanned events can be incorporated into business decision analyses that seek to evaluate the viability of alternative operational strategies.
• Earn a higher return on capital employed (ROCE) whilst simultaneously maintaining safety and environmental standards.
• Development and implementation of practical, well-structured, risk-based, forward-looking approaches to maintenance and operational planning.
• Improved approach to the identification of maintenance requirements for refurbishable assets.