Water Asset Management International 1.2 (2005) 9-15

New developments in investment planning and project evaluation: optimising expenditure to meet multiple objectives with limited resource

Jason Cox

UMS Group Global Management Consultants
Melbourne, Australia

As Asset Management continues to develop into a business function in its own right, separate from asset ownership and asset services (maintenance etc), leading utility companies are recognizing the different business drivers between Asset Owner, Asset Manager and Asset Service Provider, and are organising their businesses accordingly. Asset Managers are focusing on extracting value from Assets whilst managing the long-term sustainability of those assets for their key stakeholders, whilst Asset Owners set their expectations and performance targets and Service Providers perform the physical work on the asset.

For Asset Managers, the ability to optimally ration capital and operational expenditure is crucial to both deliver short term value and ensure this sustainability. Most utilities have historically made investment and project selection decisions based on a prioritisation of projects according to risk assessment and therefore are finding the philosophical transition towards achieving goals and objectives a difficult one. Leading Asset Managers are realising that if the company’s strategic objective and key performance indicators are appropriate, and support the medium and long term sustainability of the company, investment should be targeted at meeting those objectives. Utilities are realising that to be world-class Asset Managers they must become pro-active businesses rather than asset caretakers.

This paper considers the processes and strategies being purchased or developed by Best Performing companies, in seeking an answer to the question: 'What is it that leading Asset Management companies are doing, and doing well?'

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