7 most common mistakes made when developing a strategic asset management plan (SAMP)
Mistakes and recommendations for developing a strategic asset management plan (SAMP)
Developing a strategic approach to managing your assets requires a well-researched and articulated asset management plan(s). Being more strategic about your assets is often new for managers, and getting the plan right can be hard work.
The good news is you’re not alone! Our research has shown that strategic asset management planning is one of the new hot topics for organisations, both private and public.
To get you started on the right path, here is a list of the most common mistakes made when developing an asset management plan.
The Deadly 7
1. Starting with your assets – this is far and away THE most common mistake. It’s often because asset managers are often technically focused (you know, when you’re a hammer, everything looks like a nail!).
Recommendation: A SAMP should start with understanding and documenting the services your organisation delivers, to which customers, and where the service delivery occurs. From there, you want to understand how those services are changing. THEN, you want to find out how well the current asset base supports the delivery of those services and how it could be better.
2. Not considering non asset-based options – this one really confuses traditional asset managers (again, when you’re a hammer, everything looks like a nail!). Owing and maintain an asset as to support service delivery is expensive and ultimately a drag on both the P&L and balance sheet. As such it should be your LAST not first option.
Recommendation: Assets are essential but the rationale for them, particularly where it requires ownership, should be regularly challenged. Leasing assets, outsourcing and buying service outcomes are some of the alternatives that should be included in the planning process.
3. Trying to get it 100% right the first time – no matter how hard you try it will never be 100% right. If it’s your first go at developing a SAMP then do doubt your data will be all over the place. If your asset base is broad, in that it includes ICT, land and buildings, fleet etc., then its going to be even harder.
Recommendation: The best approach is to use the data you have and focus on the assets that are critical to service delivery. Try to get that part as good as possible and build out the rest on a progressive basis and, articulate this progressive approach in the SAMP.
4. Not consulting internal shareholders – a SAMP is the articulation of an organisation-wide strategy to align asset management to organisational goals and objectives. As such, it requires input from stakeholders across the organisation. The poor old asset management team stuck in basement trying to figure out how well the assets will service the business into the future is a thing of the past.
Recommendation: An engagement and communication plan should be part of your approach. Stakeholders should know when and why they are being consulted and understand the benefits to them of the plan and this will help with future decision making.
5. Confusing maintenance with management – this is most common where land and building assets are involved. Maintenance is one aspect of the operations phase of asset management. A good SAMP should have several plans attached to it, including a maintenance plan.
Recommendation: Ensuring assets remain in operational order, are available for service delivery and compliant with all policy and regulatory requirements is important but it is not strategic in nature and should not be the focus on the SAMP.
6. Including too much detail – big asset management reports and plans are often unreadable and it is such a waste of paper! Remember it’s a strategic plan, so it needs to be read and understood by senior managers, who won’t read it if it’s full of data, charts, and impenetrable language.
Recommendation: Summarise the key data sets, include attachments and focus on the core strategic insights and the resulting actions required. A good SAMP should be short with a large set of attachments and, if necessary, cover it with an executive summary.
7. Not linking the plan to your organisations other planning processes – if a SAMP is organisation-wide and strategic, then it MUST be integrated with other business processes. Financial planning, operational planning, ICT plans, procurement plans and HR are the obvious ones, however, your business may have others as well.
Recommendation: If asset planning at a strategic level is new to your organisation, don’t expect it to be given the attention and focus that other planning activities get, however, this should be your long term objective.
By avoiding these mistakes, you will save yourself a lot of time and considerable effort. For more information contact us at hello@grosvenor.com.au