Tools for managing assets

A well-considered asset management framework enables asset-intensive companies to strengthen how they manage their physical assets and to increase their Return on Assets employed (ROAe). It provides the capabilities needed in improving decision and life-cycle processes for physical assets, IT infrastructure concepts, performance improvements, assurance, internal controls, and in gaining a better understanding of financing needs.

The audit committee experts we talked to have seen under-spent capital asset and maintenance budgets leading to assets not performing effectively and asset failure.

In their experience, these are the matters to watch out for when audit committees consider different aspects of asset management:

Aspect of asset management	Matters to watch for
Asset strategy and planning	Investment cases for new assets and funding that do not consider the complete lifecycle. Although the Treasury’s Better Business Case is clear, there appears to be some confusion and/or reluctance to advise the Department of Internal Affairs' Governement Chief Information Officer of IT projects of $5m or more. No framework for measuring asset maturity.
Asset creation and acquisition	Ineffective management of asset delivery programmes. This includes underutilising of capital expenditure budgets. Incomplete definition of applicable financial, operational, and technical controls. Limited external advice sought on building them. Limited external advice on managing the construction risk of assets.
Asset operations	Limited assistance using data to improve up-time. Service level agreements that are inflexible. Limited finance performance improvement.
Asset maintenance	Inefficient scheduling of asset maintenance. Limited analysis of asset maintenance to identify areas for improvement. Poor prioritising and managing risks when planning and conducting maintenance.
Asset renewal and disposal	Limited evaluation of factors to consider (monetary, economic, environmental, social) before renewal or disposal. Limited assessment of asset life to identify areas for improvement.

Links to other asset management initiatives and support

Government initiatives for asset-intensive entities are on the Treasury's website.
New Zealand Asset Management Support (NAMS) is a non-for-profit organisation that supports the asset management community.