Getting to YES: Moving Utility Asset Management From Theory to Implementation

Transcription

1 BCWWA 2011 Gold Sponsor main title of presentation subtitle of presentation if required name, designations title Getting to YES: Moving Utility Asset Management From Theory to Implementation RESULTS FROM A GLOBAL SURVEY ON WATER AND WASTEWATER UTILITY ASSET MANAGEMENT April18 th, 2011 Chris Lombard P Eng MBA christiaan.lombard@aecom.com

2 Without Asset Management you are Operating in the Dark Without asset management, you are operating in the dark. It s like driving at night with your headlights showing you just a few meters of the coming road Dr. Penny Burns

3 Without Asset Management you are Operating in the Dark MAN! Am I hungry tonight..!

4 However, Asset Management (AM) is Becoming Mainstream Over the past years AM has evolved from a fringe science to a management philosophy increasingly practiced by infrastructure asset owners the world over It is a well-documented management tool with a multitude of best practice manuals, codes, standards and research reports, supported by an abundance of complex information technology tools, and guided by many industry agencies and committees However, it is perhaps this over-subscription of the topic of asset management that contributes to confusion and it being so poorly understood and implemented within organizations - and water and wastewater utilities are no exception

5 Years If AM is Becoming Main Stream, why are we still reinvesting so little in ASSET RENEWAL and REPLACEMENT? Annual Main Reinvestment as % of Replacement Value Main Renewal Rate Water Mains: 0.5% Wastewater Mains: 0.25% Drainage Mains: 0.15% From: Water Wastewater Drainage

6 Global Survey on Water and Wastewater Utility AM What are the key business drivers for utility AM? What are the challenges to overcome? What are the key ingredients for successful utility AM implementation? What strategies could be applied to make quick wins?

7 Global Representation of Survey Respondents North America 76% Asia Africa 6% 10% No surprises here: the survey was primarily sent to individuals working in the field of water / wastewater utility asset management in Canada and the US Australia / New Zealand 5% Europe 3% 0% 10% 20% 30% 40% 50% 60% 70% 80%

8 Industry Representation of Survey Respondents Municipal 65% Consulting 29% Private water / wastewater utility 3% Research 2% Other government 2% 0% 10% 20% 30% 40% 50% 60% 70%

9 Functional Work Area of Survey Respondents Asset management (if your position is formalized as such) 39% Engineering 21% Operations Executive management Consulting 6% 11% 15% PLUS: It was good to see the emergence of the job position ASSET MANAGEMENT Administration Information technology 2% 6% NEGATIVE: We did not hear from FINANCE 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

10 Rating of Business Drivers for Asset Management 1 Ageing infrastructure 2 Sustainability in general 3 4 Measuring asset performance Reduced budgets Improving levels of service Accountability / transparency Accounting regulatory changes Technological advances Other regulatory changes Public awareness High Low

11 Rating of Challenges to Implementing Asset Management 1 Lack of time (person-hours) to do what needs to be done Lack of funding 2 Skills shortages Lack of a clear vision 4 3 Lack of awareness Insufficient management of change Cannot measure asset performance Utilities focus too much on new infrastructure Asset management is too theoretical Too much reliance on IT High Low 5 AM is seen as cure for all organizational ills

12 Rating of Benefits of Asset Management 1 Justification of long-term capital renewal and replacement needs Optimizing asset life-cycle decisions Better asset risk management 2 Linking service levels to asset performance and funding Educating stakeholders Demonstrating value for money to customers High Low Measuring asset performance 3 Introducing organizational change

13 Rating of Key Ingredients of Asset Management 1 Organizational support 2 Communication 3 Knowing asset condition 5 4 Sustaining the effort Complete asset registers Understanding and defining levels of service Knowing asset risk High Low 7 6 Knowing asset replacement values Information technology and tools Organizational change management

14 Quick Win Asset Management Strategies (80 / 20 Rule) Top-down / life-cycle analysis Communication & education Capital decision optimization Asset criticality & risk assessment Asset condition Asset inventory Maintenance Funding Change management IT Levels of service Benchmarking

15 Future Role of AM in Water & Wastewater Utilities Asset management will be a key management philosophy driving most capital and operating decisions 63% Asset management will continue to have some impact on capital and operating decisions but will not be fully adopted by senior decisionmakers 35% Optimistic view wins out A management fad that will have an impact over the short term but will disappear over time 0% Pessimistic / realistic (?) view No role 2% 0% 10% 20% 30% 40% 50% 60% 70%

16 Comments on the Future Role of AM in W & WW Utilities (1/2) As capital expenditures are more and more under public scrutiny, organizations will have to prove they conduct due diligence in their decisions. Asset Management is one of the tools municipalities will need to address this need A range of factors such as ageing infrastructure; budgetary pressures and the need for greater accountability and transparency will keep providing impetus to asset management PAS 55 is coming => ISO Regulatory Compliance Scarcity drives innovation. Lacking financial (and other) resources, it will be increasingly important to manage their use The growing infrastructure gap, funding constraints and growing capability of AM tools will demand changes in the way we do business including communicating to increase awareness of funding requirements and allocation decisions Asset management will optimize the risk service life cycle cost decisions. This essentially controls a large part of the utility's budgets

17 Comments on the Future Role of AM in W & WW Utilities (2/2) In New Zealand, utilities are regulated by the Local Government Act to prepare long term capital plans & AMPs every 3 years It is expected that AM Plans will become a legislative requirement, but compliance will in most cases be to the minimum standards, rather than being technically progressive As the infrastructure ages and funds available to provide upgrades are limited, Asset Management will become extremely important to prioritize future projects / expenditures Stronger drivers on utilities from increasing budgetary pressures, stakeholder and customer demands and efficiency improvements point towards the need for asset management to be implemented and embraced No quick wins ( AM is a continuous process) AND Magic would work

18 Water and Wastewater Utility Asset Management Summarized: Top Three Rated Components OVERCOMING KEY CHALLENGES 1. Lack of time (person-hours) to do what needs to be done 2. Lack of funding 3. Skills shortages KEY INGREDIENTS 1. Organizational support 2. Communication 3. Knowing asset condition UNDERSTANING KEY BUSINESS DRIVERS 1. Ageing infrastructure 2. Sustainability in general 3. Measuring asset performance WINNING AM STRATEGIES 1. Top-down / life-cycle assessments 2. Communication & education 3. Capital decision optimization REAPING BENEFITS 1. Justification of longterm capital renewal and replacement needs 2. Optimizing asset lifecycle decisions 3. Better asset risk management

19 Summary & Conclusions Some consistency & recurring themes in responses Beyond the light (immediate future) there lie many challenges Asset management will be the key tool to address those challenges We need to improve our communication skills to inform and educate our colleagues and customers

20 Getting to YES: Moving Utility Asset Management From Theory to Implementation We need to become expert communicators. Yes, we still need the engineering and technical skills, that is a given. But if we want to be successful at this we need to inform and educate our councils and customers on infrastructure matters, and we need to tell the story in such a manner that they understand and support us. Else we can forget it. Canadian utility manager, National Water and Wastewater Benchmarking Workshop, Banff, Canada. April 2011

21 BCWWA 2011 Gold Sponsor Thank You Questions? Chris Lombard