Many organisations, be they public agencies or private firms, rely on a core group of capital assets to provide their key goods and services, and to do so reliably and cost-effectively.
This high priority capital asset infrastructure can include manufacturing plant and equipment; linear infrastructure supplying gas, electricity, water or communications services; special purpose-designed and centralised IT facilities; freight transport modules; or special purpose-designed centres deploying sophisticated technologies or IT systems.
These critical assets usually require scheduled management programs to ensure that they perform reliably and cost-effectively, as well as periodic upgrades to guarantee that they will continue to meet their service delivery expectations across the rest of their economic life.
But they may also be in competition for funds when the total pool for this budget item is constrained. It is therefore important that the annual cash allocation is directed to those outputs that provide the highest level of performance over the planning time horizon.
We work with business planners to develop a structured approach for optimising the economic return on the total investment that is available for a specified portfolio of assets across this horizon. It has four steps:
- Facilitation of internal workshops with managers and users of the assets to confirm that the priority service-delivery objectives remain in focus; and then to develop a business risk profile for their operations.
- Review of the data-set collected on the portfolio, firstly to establish its relevance to the performance outcomes sought, and secondly to evaluate the techniques used for collecting, storing and analysing the data.
- Development of a business plan showing the investments required to preserve or enhance the capacity and efficiency of each asset. This could be considered over a 3-5 year period initially, and then over a 10 year (+) horizon if the investment is substantial.
- Performing an economic appraisal of the preferred asset management options, to identify those that offer the highest value-adding potential whilst guaranteeing the performance objectives sought.
Our services are designed to the take account of the characteristics of the organisation and its industry sector. We also factor-in contingencies that may be created by influences such as:
- the geographical dispersion of the assets being reviewed; unexpected constraints on the availability of investment or working capital;
- changes to the needs of key user groups or external entities such as environmental regulators; or
- the arrival of new technology or other innovations that render the preferred business model obsolete.