1. Asset Management in the Arab Region and its Role in Improved Performance and Utility Efficiency
Lina Sheqem
Cowater International

2. Arab Utilities and Asset Management
Perception limited to financial and/or IT related
Fairly new discipline--little understanding of size of impact of good AMM practices on operational efficiency
Limited regulatory requirements are a disincentive to the adoption of good AMM practices
If available, AMM functions are piecemeal and/or non-complementary
Similarly, organizational units work more as silos and minimum integration in terms of functions and data.
O&M costs are mostly aggregated and cannot be linked to specific assets
General maintenance trend is “fix when broken”.

3. Understand and Define Requirements Develop Asset Lifecycle Strategies
The Asset Management Process*
Understand and Define Requirements
Develop Asset Lifecycle Strategies
AMM Enablers
AMM Teams
Financial/Funding Strategies
Develop AMM Policy/Strategy
AMM Plans
Capital Works Strategies
Define Levels of Service
Information Systems/Tools
Forecast Future Demand
Lifecycle Decision Making Techniques
Maintenance Strategies and Plans
Develop the Asset Register
AMM Service Delivery
Assess Asset Conditions
Operational Strategies and Plans
Quality Management
Identify Critical Asset and Business Risks
* Source: International Infrastructure Management Manual, 2012

4. One or two people assigned
AMM Enablers – AMM Teams
One or two people assigned
Cross departmental committee assigned; staff training for assigned staff; management considered AMM functions and structure
All staff have related assigned roles and supporting training; management develops policy/strategy
AMM capacity developed and monitored; AMM structure in place; cost-benefit analysis carried out

5. AMM Enablers – AMM Teams How to go about it
Define AMM capability requirements
Define AMM teams and structures
Establish capability with a change management plan

6. AMM Enablers – AMM Plans
AMM plans with basic info on assets; LOS; associated 5-10 yr financial forecasts and investment plans
As previous plus critical assets info; condition and performance description; future demand forecast; AMM processes; 3 yr AMM improvement plan
As previous plus analysis of asset conditions and performance trends; customer engagement in defining LOS; risk based decision making
As previous plus risk management programs; LOS cost/benefit analyses; largely complete improvement program with ongoing maintenance of AMM practice

7. AMM Enablers – AMM Plans How to go about it
Take the executive decision to develop a “first cut” AMM plan even if with gaps
Gradually fill gaps and refine plan
Alternatively examine good practices and work accordingly

8. AMM Enablers – Information Systems/Tools
Asset register with core attributes; asset reports manually generated for plan
Asset register reports for facility to component; planned maintenance and complaint tracking; manual reports for valuation and forecasting
Automated reports and analysis—operational, maintenance, asset conditions, performance
Integrated financial, assets, CS, operational systems; AMM functions enables

9. AMM Enablers – Information Systems/Tools How to go about it
Define related business processes and system requirements
Evaluation of available software
AMM system implementation
Ongoing management and review

10. Contracts for external service provision
AMM Enablers – O&M/Service Delivery
Roles assigned
Contracts for external service provision
Internal service level agreements; contracts with best delivery approaches; competitive tendering
Service delivery mechanisms analyzed; risks, benefits, costs of outsourcing considered

11. AMM Enablers – O&M/Service Delivery How to go about it
Define core services
Identify delivery options
Evaluate and select optimal delivery option
Procure and implement option

12. AMM Enablers – Quality Management
Simple documentation for critical activities
Previous plus quality policy and QM system
All processes documented per QM system
ISO 9001 Certification

13. AMM Enablers – Quality Management How to go about it
Business process mapping and documentation
Documentation of processes in manual to enable effective planning and operations

14. Informal expression of policy statements
AMM Requirements – Policy/Strategy
Informal expression of policy statements
Defined policy statements linked to corporate goals; high level action plans
AMM policy and strategy adopted; delineated action plans per functional group
AMM policy and strategy fully integrated into business procedures; reviewed and updated

15. AMM Requirements – Policy/Strategy How to go about it
First cut with simple corporate expectations from AMM planning
Refine and upgrade gradually going to another level of detail each iteration

16. Basic LOS and association of assets to corporate objectives
AMM Requirements – Levels of Service
Basic LOS and association of assets to corporate objectives
Defined customer groups and requirements with associated LOS and performance measures; performance monitoring reports
Customer groups needs analyzed; LOS alternatives costs analyzed; customers consulted
LOS consultation strategy implemented; key to decision making and planning

17. AMM Requirements – Levels of Service How to go about it
Developing LOS—customers; regulation; strategic; etc
Developing performance measures and setting targets
Consulting with customers
Monitoring and reporting on performance

18. As previous plus risk assessment of the different scenarios
AMM Requirements – Future Demand Forecast
Experienced staff predictions based on known trends and future growth patterns
Formal forecasts based on pop growth/historic trends; risk associated with demand considered
Forecasts based on mathematical analysis of past trends and primary demand factors; different scenarios developed
As previous plus risk assessment of the different scenarios

19. AMM Requirements – Future Demand Forecast How to go about it
Monitoring current demand
Identify demand drivers
Develop demand forecasts
Model demand scenarios

20. AMM Requirements – The Asset Register
Basic information on a spreadsheet; incomplete; informal
Information that enables asset valuation
Reliable register of physical and financial attributes in IS with data analysis and reporting; systematic collection of data; focus on critical assets
Information on history, type, cost, condition, performance, etc recorded at asset level; optimized data collection; covering critical and non-critical assets with minimal assumptions

21. AMM Requirements – The Asset Register How to go about it
Identify information requirements—legislative, then valuation and replacement, then maintenance management, then risk management and lifecycle analysis
Establish hierarchy, structure and numbering system
Establish system for data collection and management

22. AMM Requirements – Asset Condition
Condition assessment at asset group level to cover critical assets and regulatory requirements
Risk based condition assessment program for major asset types; data for asset life assessment; data management system in place
Cost/benefit based condition assessment; good data for all types of assets; data management process integrated into business processes; data validation
Condition information supports risk based decision making, lifecycle decision making and financial performance reporting

23. AMM Requirements –Asset Condition How to go about it
Determine scope of a condition assessment program—which assets
Delineate suitable assessment techniques
Develop appropriate practices

24. AMM Requirements – Critical Assets & Business Risks
Critical assets understood by staff involved in maintenance/ renewal decisions
Risk framework with critical assets and high risk identified with associated risk management strategies
Risk analysis supports decision making; risk register updated and monitored
Risk management policy; quantified risk with mitigation options evaluated; risk involved in all aspects of decision making

25. AMM Requirements –Critical Assets & Business Risks How to go about it
Identify risk management context (policy, objectives, criteria, scope)
Identify risk (categories, events, critical assets)
Assess risk (consequence of failure, probability of failure, risk ranking)
Manage risk (identify and evaluate treatment options, develop action plan)

26. AMM Lifecycle Strategies – Decision-making Techniques
AMM decisions based on staff judgement and corporate priorities
MCA/CBA applied to major projects/ programs
MCA/CBA applied to all operational and capital asset programs; critical assumptions and estimates undergo sensitivity analysis
As previous plus risk based sensitivity analysis

27. AMM Lifecycle Strategies – Decision-making Techniques
How to go about it
Establish CBA analysis—start organizational and extend to socio-economic
Establish MCA
Include risk based sensitivity analysis

28. AMM Lifecycle Strategies –Operational Strategies/Plans
Operations understood by key staff; plans not documented; mainly reactive; asset utilization measured for some key assets
Emergency response plan; demand management considered in major asset planning; asset utilization measured for critical asset groups and analyzed
ERPs; business continuity plans developed and tested; demand management affects all decision making; asset utilization measured and analyzed for most asset groups
Operational plans analyzed, tested, improved; debriefs after incidents; asset utilization measured real-time for all asset groups; operational programs optimized using CBA and risk analysis

29. AMM Lifecycle Strategies –Operational Strategies/Plans
How to go about it
Document and review business procedures
Measure asset utilization--ROI
Consider demand management programs based on CBA
Develop contingency plans for critical asset failure
Develop and test business continuity plans

30. AMM Lifecycle Strategies –Maintenance Strategies/Plans
Asset functions aligned with org objectives; regulatory compliance; maintenance records maintained
Asset criticality considered; maintenance objectives established; performance based vs. prescriptive maintenance examined
Asset failure modes understood; contingency plans; preventive maintenance plans CBA optimized; MM software implemented
Root cause analysis of major faults; trend analysis; optimization of reactive, preventive, predictive maintenance and renewal plans; procurement model in place

31. AMM Lifecycle Strategies –Maintenance Strategies/Plans
How to go about it
Staged development of maintenance practices
Develop maintenance strategy—structure, functional requirements, data/information, prioritization of maintenance activities
Identify maintenance objectives and performance measures and targets
Develop more detailed maintenance plans
Risk based maintenance plans
Maintenance monitoring and reporting

32. AMM Lifecycle Strategies –Capital Investment Strategies/Plans
Proposed capital projects and costs based on staff judgement and future requirements
Project identified from several sources (hydraulic models, operational staff, etc); 3-yr capital project plan fully scoped and estimated
As previous plus business case and options analysis for major projects for 3-5 yr period; major projects for yrs conceptually identified with broad cost estimates
Long term CIP defined using advanced decision making (e.g. predictive maintenance and risk based analyses)

33. AMM Lifecycle Strategies –Capital Investment Strategies/Plans
How to go about it
Identify potential projects
Develop options for each project
Evaluate options and prioritize projects
Scope projects
Develop renewal programs (projection of historic expenditure; broad estimates for replacing assets at end of life; predictive modeling)

34. AMM Lifecycle Strategies – Financial and Funding Strategies
How to go about it
Asset valuation (Depr. Replacement Cost, straight line depr.; replacement cost; useful life and remaining useful life; asset value)
Develop long term financial forecasts and funding requirements—10 years, O&M, renewal and development costs; resulting from AMM strategies/plans; updated annually)
Project future revenue/funding sources and cashflows
Identify and highlight funding gaps and communicate to decision makers

35. QUESTIONS?
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