asset management: why linear long-term planning isn’t the answer
Linear long-term planning has its place. But for the perennial issue of ageing assets, it will not be the catalyst that speeds you to the resilient leak-free uplands. While capital investment will help, it won’t solve the problem either. Creating sensor- and AI-fuelled intelligent networks to monitor asset performance and automate processes is now common practice. Yet even with insightful data, investment and a long-term plan, water companies are struggling to resolve the issue of underperforming assets.
The prize here is huge. According to Water UK, the industry has invested 40% of its turnover in new assets in recent years. That is a significant amount, but the estimated replacement value of tangible assets is over £250bn. What is needed, alongside a linear long-term asset replacement plan, is an exponential improvement in the performance of current assets.
A new relationship with your assets and network
To deliver improvements in parallel to capital investments, you need a new relationship with your assets and network. A relationship driven by deeper joined-up insights into asset health and performance, threats and risks to service and customers, and the ability to take better informed decisions. This will enable you to maximise asset lifetime value, reduce the cost of failure, and optimise service performance and resilience.
Of course, you already know this is where the opportunity lies. You’re doing everything you can within the financial, organisational and technological constraints you operate in. But what if there was a better way to navigate these constraints in order to prise out the potential that lies within your assets, data and people?
Our clients’ constraints typically fall into three areas:
where data and analytics highlight the multiple interdependent factors behind underperformance, but departmental siloes block the cross-functional collaboration needed to address them
where new digital tools can enable fast access to data and insights and simplify ways of working, but business and technology functions are not always aligned
where exploration and innovation are vital to transformation, but Business as Usual priorities are consuming all the resources and expertise
The key is to reframe how you tackle the problem, bringing people, process and data together to test your ability to make better asset management decisions.
Consider this scenario: your sensors are triggering multiple alarms, giving you invaluable data on the state of your assets. But when you investigate, you find that just 10% of these alarms require action; 90% could be eliminated by better understanding root causes. This is just one example of the benefits our clients have gained from taking a fresh-eyed, multi-disciplinary approach to asset performance issues. Asset replacement is in the long-term plan, but asset optimisation will make a big difference in the meantime.
Maximising asset performance
To rapidly improve asset performance, we help our clients to create and run Asset Performance Pilots (APPs). These embrace the concept of develop, test, fail, learn, the aim being frequent innovations, each feeding into the next iteration of ideas. It’s fast, agile and powerful, delivering multiple potential solutions long before the linear planning process has produced a tangible outcome.
There are some critical success factors to fully reap the benefits of the APP:
Create a sense of possibility: Identify one or two simple use cases for the application of data & analytics to improve asset management and network performance. Keep them grounded in reality and engage people in the potential benefits. Define the direction of travel with a ‘what if’ mindset rather than prescribing the precise end goal.
Be the glue between different teams: Teams will be busy with existing priorities, often functionally driven. To start with, your project team will need to keep bringing different functions together. As the benefits manifest, the pilots develop their own momentum, but before that it’s important to have a dedicated central team driving the change.
Listen to the frontline stories: Work with your frontline teams to define and explore pragmatic use cases, where added insight/intelligence will impact on asset management and networks now. Your people will know where the problems and opportunities are; their stories and anecdotes will be backed up by data stored in multiple sources. Listen to the stories and declare a ‘data amnesty’ to understand what data exists and how it might be used to accelerate your journey.
Take accountability and act: take one end-to-end business story, and just get going. Exploit what already exists: initiatives that may have been started and need that little extra push to get over the line. Make accountabilities clear and tap into passions and frustrations to investigate (again, with the front line) how better information might improve asset management.
Bring your APP to life: don’t hold back if you don’t have the technical capability to showcase the possibilities, that can follow – there is still a place for pen and paper to create engagement and excitement. Develop and showcase working models and, where possible, test them against real life examples to demonstrate the potential, refine the thinking and create excitement.
Integrate and scale: To reap the rewards of data & analytics, you will need to start managing your assets and operating your networks differently on the ground, integrating new ways of working across the whole organisation. Make ‘little and often’ your mantra: release incremental new capabilities and practices regularly and frequently, reflecting the organisation’s ability to absorb change. Don’t get lost in the excitement of multiple APPs, which then don’t get translated into new ways of working.
Prioritise: Success breeds interest, which in turn gathers momentum. Before long, you may be inundated with ideas. That is a happy problem to solve, and it needs managing. Capture the growing interest and expectations by engaging your stakeholders and influencers to identify, qualify and prioritise the next set of use cases that will make a tangible difference to the performance of your asset base.
Bringing together people, process and data to explore new possibilities, this proven approach will enable you to maximise asset lifetime value and get the best from what you currently have. If you succeed, before long you will be setting up a multi-functional APP factory to drive the exploration, development and scaling of asset performance improvement innovations. This will be the innovation heart of your business, as people learn that it’s possible to make a difference quickly with what’s already available and underway.
As a water company, you excel at delivering capital management. With a change in mindset, you can also excel at delivering change and innovation. Remember, it’s not linear, it’s exponential.
This article was written by Laurent Elfassy and Ari Iso-Rautio and was published in the Winter Edition of Institute of Water