Asset Management in Municipal Administrations.

March 12, 2018

 

What is Asset Management?

Though it may seem like a simple question, the answer can be a bit complex. The term “Asset Management” is typically used as a catch-all to describe a variety of things, and is often used by software providers to describe their product. It is important for municipal governments to understand what Asset Management means in the municipal context, when deciding on if to adopt an asset management system.

 

First thing is first - Don’t focus on the term “Asset Management”. Focus on the functionality.

The definition of asset management changes from company to company, and from region to region, so above all else, it is important that you focus on what the proposed system does. For example, does the system track maintenance history on an asset, does it help with scheduling resources for maintenance activities, or does it assess the risk associated with the failure of that asset? Each one of these features offer drastically different types of value to a municipal administration.

 

Because the Asset Management term can be vague, it is important to understand what the needs and wants of your municipality are. Once you have this understanding, you can then try and match your needs to any system’s application, keeping in mind that the application’s functionality is more important than its name. With that being said, there are three general categories of asset management systems in the market today – work order management, fixed asset registry, and asset management planning systems.

 

Type 1: Work order management

This system type can be described as a “break/fix” asset management system - they track asset “breaks”, and help issue work orders against those assets so that maintenance crews can “fix” them. These solutions are most often used by the Public Works department of a municipality, help keep maintenance activities organized, and help forecast short-term (within 18 months) maintenance requirements. GIS systems are the foundation of these programs, as they provide location data, and can house information about the asset (road classification, etc).

 

Type 2: Fixed Asset Registry

Fixed Asset Registry systems are typically used by municipalities to have firm grip on which assets are in the municipality, by building a registry (list) of assets. A fixed Asset Registry is most heavily used in Finance and Accounting, when determining the book value of assets, by considering depreciation. Financial depreciation rates can be calculated in many ways, and they are generally not very good for forecasting asset failures or asset maintenance requirements.  

 

Type 3: Asset Management Planning

Asset Management Planning is all about understanding the quality, and reliability, of a service that rate-payers receive from a municipal asset. You can regard this form of Asset Management as the 30,000-foot view.

 

When completing an Asset Management Plan, it is important to include the following considerations:

  • Asset inventory – what assets do we have?

  • Asset condition – what is the relative condition of these assets?

  • Level of service – are the assets providing enough service to the rate-payers, or are they any gaps?

  • Asset risk – are there any assets that are at risk of failing, and if so, what is the consequence of such a failure?

  • Policies – what policies do we need to put in place to ensure that our assets are managed properly?

Once again, GIS systems can be a great foundation for building out an Asset Management Planning system.

 

Getting started on Asset Management

For any municipality wanting to get started on Asset Management, it is important for them to be prepared with the necessary resources in place. Because Asset Management is a process that evolves over time, and not a project that is stagnant, making sure that the appropriate resources are in place to execute a project is essential.

 

Before embarking on establishing an Asset Management system, a municipality may want to consider getting the following resources in place:

  • Commitment establishing a system, from the Municipality’s Administration

  • Financial resources, for software systems or external consultants

  • Personnel resources:

    • Set-up team: to ensure that there is an internal team that has the authority, and the skills required, to steer the set-up of the system to completion

    • Operational team: to ensure that the system remains up-to-date, and operational, after it is set-up

 

Conclusion

Asset Management solutions can significantly help a municipality improve their operations, but it is important for Municipality to understand their own priorities and needs before selecting which form, or which combination of forms, of asset management best suit their needs. It is also important to note that all Asset Management systems are not one-and-done projects, but rather living-breathing processes that need to be continuously evolving.

 

MuniSight’s team is happy to help give guidance to any municipality that interested in implementing an Asset Management system.

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