10 Reasons to Implement ISO 55001
Should you buy into ISO 55001 now? Here’s what implementing this international Asset Management System standard could do for your business.
1. Make asset management strategy-led
ISO 55001 configures asset management to make it business strategy-led, not tactically-driven. Traditionally, we have seen technical functions trying to drive asset management bottom up. In contrast, ISO 55001 places the steering wheel for asset management squarely and fairly in the boardroom. It aligns asset management objectives and processes with strategic planning and decision making for the whole business.
2. Maintain a balance between costs, opportunities and risks
It requires a balance to be maintained between costs, opportunities and risks in order to optimise asset performance in order to achieve the organisation’s objectives. Most crucially, it requires this to be done while taking a whole life cycle view of the asset or asset portfolio. The life cycle view extends from the concept stage, right through to decommissioning and even final disposal. It is about the right people, making the right decisions at the right time to deliver real value.
Optimisation does not simply mean minimising costs. Other issues such as business continuity, stakeholder views, health and safety and environmental performance may be identified as critical to sustaining the business.
3. Manage risks to assets, to the business and to reputation
Risk management is a core component of asset management and operates continually through proper implementation of the asset management system. Risk and opportunities, in their many different forms, can impact assets and asset management for better or for worse. ISO 550001 ensures that they get identified, evaluated and treated as those risks appear and change over time.
ISO 55001 adopts the definition of risk given in ISO 31000.
4. Establish joined-up thinking
Asset management is defined as the “co-ordinated activity of an organisation to realise value from assets”. Co-ordination both implies and requires that the actions of people working at different levels in the organisation and in different departments are all in tune. This cannot happen by accident or through wishful thinking. The architects of ISO 55001 knew this. So the standard requires communication and co-operation not only to be exercised but also to be demonstrated.
Meeting these requirements requires a number things to be engineered into an asset management system, appropriately defined responsibilities and authorities, agreed processes which harmonise activities across departments, clear channels and means of communication etc. This area is one of the most challenging and potentially satisfying in any initiative to implement ISO 55001.
5. Nurture interdepartmental collaboration
All organisations are highly susceptible to operating with a silo mentality. There are many reasons for this which have more to do with human behaviour and its Darwinian origins than with enabling organisations to perform at their best. In fact, nearly all of the consequences of the silo mentality are bad for the business. For sure, it gets in the way of sound asset management.
ISO 55001 requires top management to demonstrate leadership and commitment in several clearly specified ways. One of those ways is the promotion of cross-functional collaboration. If it can be done for asset management, it sets a very beneficial precedent for other aspects of managing the business.
6. Change the business culture for the better
We know what is meant by a “quality culture” and a “safety culture”. No matter how brilliantly designed a quality management system or health and safety management system may be, their effectiveness is highly dependent on people. Employees and others who work for the organisation must have the right values, attitude and behaviour which we recognise collectively as the business culture. As a good consultant can demonstrate, the process for developing and implementing an asset management system should begin the steps to transform today’s culture into tomorrow’s culture. Here we are talking about a culture which positively promotes and applies the best of asset management. Education and training are among the essential change agents.
7. Develop and keep asset management skills
People in many different roles and functions contribute to effective asset management and they must all be competent in what they do. ISO 55001 requires a systematic approach to identifying persons whose work affects performance of the asset, of asset management and of the system itself. It determines what vital knowledge and skills they need and directs action to ensure they obtain them. Furthermore, the system ensures that competence is developed and maintained whenever the situation changes.
Perhaps one of the most positive outcomes is that the true worth of asset management professionals will become as well recognised as that of quality, health, safety and environmental professionals. Knowledge and experience in implementing ISO 55001 will be career enhancing.
8. Manage and protect vital knowledge about an asset
Asset management is very information intensive. Information is one of the most valuable components of an asset because of the knowledge that it can provide to an organisation and its stakeholders.
Information exists in all parts of an organisation in many forms: financial and non-financial, data and the results of its analysis, electronic and hard copy, quantitative and qualitative, internally-created and externally sourced. Much of it is essential for demonstrating legal and contractual compliance. Moreover, information obtained in an early stage of the asset life cycle may be crucial for asset management at a later stage. The content of information owned by one department is often invaluable to other departments, but inaccessible. Traditionally, major projects have been beset with problems of lost or illegible or incompatible data, incomplete and irretrievable information, lack of traceability and so on. ISO 55001 targets all of these vulnerable areas by specifying a clear and powerful set of requirements for protecting asset-relevant information.
9. Know the performance of an asset portfolio
In many cases, top management are unaware of the actual losses resulting from asset failures, downtime, reputation damage etc. It is generally accepted that corrective maintenance is 3 to 5 times more expensive than preventive maintenance. The asset management system provides a framework for ensuring best use of assets and creating the most profit for the business while managing risk. A favourite question of an auditor is, “How is your business doing?”. Usually the response is one which implies it’s OK. Of course, the auditor cannot resist asking, “How do you know?”.
ISO 55001 causes the asset management system to have in place appropriate means of monitoring and measuring performance not only of an asset portfolio but also asset management itself. Thus top management are provided with information and analysis, both financial and non-financial. It can inform them how assets are performing and the extent to which their asset strategy and plans are succeeding. The result – better decision making and better business.
10. Win future contracts
Regulators and government departments are encouraging and even requiring asset management systems. Insurance underwriters are seeking evidence of sound asset management systems in order to offer more favourable prices, terms and conditions with insurance carriers. Investors in companies with substantial infrastructure projects ranging from industrial complexes to offshore wind farms to urban developments, see ISO 55001 compliance as means of protecting their investment.
It is one thing to claim to have an effective asset management system; quite another to actually prove it. Therefore, forward thinking companies see ISO 55001 certification as the way to go. It demonstrates sound governance.
See the article, ISO Certification – Is it Right for Us?
There we are, 10 good reasons for implementing ISO 55001. More could be cited, but hopefully you will agree that it makes a strong case for itself. The potential outcomes – greater profitability, competitiveness and long term sustainability invite a closer look.
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