Using asset management solutions and technology to create solid ROI projections
By Kevin Price
For asset management teams responsible for critical infrastructure, budget planning season can be a highly stressful time, fraught with questions that have no easy answers. The annual budget submissions and requests for funding often prompt decision-makers to request further documentation and cost justification. With an Enterprise Asset Management solution in place, the data needed to support strategic planning is readily available. For organizations struggling without the adequate solutions to support their needs, now is the time to invest in the future.
Budgets are tight across all sectors as utilities, municipalities, and public agencies try to optimize resources and enhance services—while also maintaining or retrofitting aging infrastructures. From bridges and reservoirs to public transportation terminals and government centers, U.S. infrastructure has slid into declining reliability.
Every four years, the American Society of Civil Engineers’ Report Card for America’s Infrastructure depicts the condition and performance of the country’s infrastructure in the familiar form of a school report card. The 2017 grade: D+
The National League of Cities said in their 2018 State of the Cities report that 56 percent of US cities cite infrastructure as one of the top five problems.
With this level of focus on infrastructure, maintenance teams can expect their proposals to be scrutinized. Projections for Return on Investment (ROI), and reports on Condition Assessments will likely be requested. Lack of visibility to current status may be part of the problem. Aging assets may be scattered over a large geographic area and mired in decades of spotty record-keeping and minimal service history tracking. Without sound data to support request for funds, investment in infrastructure repairs or replacement may be tabled for another year.
Upgrading IT solutions to enable tracking of Condition Assessment and State of Good Repair for infrastructure assets is essential. Advanced software solutions—purpose built for asset management—can help provide a holistic view, from Facility Condition Assessment to Remaining Useful Life and Estimated Replacement Cost. The recent as-serviced history as well as costs of asset maintenance and any service contracts or warranties on the assets can also be considered.
For many towns, government agencies and utilities, impact of unexpected downtime associated with repairing or upgrading assets must be a factor, especially if public safety is jeopardized.
Software can help answer such questions and identify the opportunities where investments will provide the greatest impact, improve confidence in the infrastructure assets, and ensure continuous service to constituents—whether school children on a bus, commuters crossing a bridge, or veterans receiving treatment at a VA hospital.
Moving toward a Condition Assessment approach requires some homework. The sooner you begin the data capture, the sooner you can begin leveraging analytics to capture insights.
In addition to the obvious criteria to record, such as location of the asset, age and condition, be sure to also consider any regulations and compliance issues that may pertain, such as ADA accessibility and security vulnerabilities.
A comprehensive risk assessment is a prerequisite to determine which assets carry the most impact or risk. This helps prioritize the order in which assets will be addressed. Once the priority is established, it is time to measure and gather condition assessments. As part of the assessment, the “value” to the stakeholders is defined. This means replacement costs, convenience to the public, usability, and modern, digital experiences are all important. This includes features such as the ability to pay utility bills online, access to transportation schedules through apps, and the ability to digitally report a pothole or traffic light failure.
Once you have the basics entered you should be able to monitor each asset and track performance issues which will contribute to sound financial budgeting and priority assessment. You will be able to search the system for assets which need preventive maintenance and make sure the necessary parts and resources are available, while also estimating those costs.
The most significant value will come from the power of predictive analytics. Today, innovative Business Intelligence solutions with Artificial Intelligence can contain powerful predictive capabilities, using algorithms and data science to identify patterns in data points and project next likely outcomes. Users can explore “what if” scenarios and obtain forecasts of likely costs and likely demands.
This glimpse of future investment needs can be juxtaposed against projected cash cycles also taking into account forecasts for shifting demand. Managers can then prioritize major capital investments when funding and political backing is in place. Plans for stop-gap, bare-minimum fixes may be needed when funds are limited.
Managers should also be able to identify some time-sensitive high priority critical issues and demand an immediate response, including those that may incur costly fines and safety risks. Managers should be alert to such issues as: ADA accessibility, building code compliance, OSHA or EPA mandates, or workforce or public safety issues.
Smart software solutions will provide the data needed to make sound ROI projections. Data will help cost-justify budget requests and bring New Year resolutions into sharp focus.
Kevin Price is the Technical Product Evangelist for Infor EAM and has more than 20 years of experience in the enterprise asset management solution area. He is currently the senior product director for the Infor EAM portfolio. He may be reached at www.infor.com