Asset Management Unpacked: Understanding the Relationship Between Policy, Strategy, and Plans Under ISO 55000
by Susan Steyn, Aug 29
Asset management is an essential practice for organizations seeking to achieve their organizational objectives through the effective and efficient management of their assets. The ISO 55000 standard provides a structured framework for establishing, implementing, maintaining, and improving an asset management system. A critical component of this framework is the clear definition and interaction between asset management policy, strategy, and plans. Understanding how these elements fit together is key to aligning operational activities with organizational goals.
The ISO 55000 Framework: An Overview
ISO 55000 provides a global benchmark for asset management practices. It emphasizes the need for a systematic approach to managing assets throughout their life cycles, from acquisition to disposal. The standard specifies distinct requirements for the asset management policy, strategy, and plans, which are interrelated and collectively ensure that asset management practices effectively support the organization’s strategic goals.
1. Asset Management Policy
The asset management policy serves as the cornerstone of an organization’s asset management system. It is a high-level statement that reflects the overarching principles and intentions regarding asset management, directly aligning with the organization’s vision and strategic direction. This policy provides the framework for setting objectives and outlines the general approach for managing assets, ensuring compliance with legal, regulatory, and organizational requirements.
Key aspects of the Asset Management Policy:
- Set the non-negotiable commitments e.g. to methods that will be used, outcomes that must be achieved or boundaries within which AM must be constrained.
- Aligns with overall organizational objectives.
- Provides the foundational principles for certain aspects of the asset management strategy, while acknowledging that much of the strategy may also derive directly from organizational objectives.
2. Asset Management Strategy
The asset management strategy establishes a long-term approach for asset management. It specifically outlines the asset management objectives and the methods for achieving them. It translates these high-level principles into practical terms, specifying how the organization plans to manage its assets to generate value while balancing financial, environmental, and social costs, risks, opportunities, and performance benefits.
Functions of the Asset Management Strategy:
- Translates the asset management policy into specific, actionable objectives.
- Establishes a long-term program and priorities for asset management.
- Outlines approaches to risk management, resource allocation, and performance improvement.
3. Asset Management Plans
Asset management plans are detailed documents that describe the specific activities, resources, and timelines for managing individual asset groups or types. These plans are tactical tools used to implement the strategy, ensuring that every asset is managed according to the strategy and policy directives.
Characteristics of Asset Management Plans:
- Detail the operational tasks needed to manage assets.
- Specify responsibilities, performance targets, and maintenance schedules.
- Provide a roadmap for asset-related activities and processes.
How Policy, Strategy, and Plans Fit Together
Understanding the flow from policy to strategy to plans is crucial for effective asset management:
- From Policy to Strategy: The asset management policy sets out the why—the purpose and principles guiding asset management within the organization. The strategy, then, defines the how—the approach the organization will take to meet these principles effectively.
- From Strategy to Plans: The strategy provides a structured framework and objectives, which are then operationalized through asset management plans. These plans specify the ‘what’—the specific actions, resources, and timelines required to achieve the strategy’s objectives.
Conclusion: A Holistic Approach to Asset Management
The successful implementation of an asset management system under ISO 55000 involves a seamless integration of policy, strategy, and plans. Each component serves a specific purpose but must work in concert to ensure that asset management activities are aligned with the broader organizational goals. By demystifying these components and understanding their interrelationships, organizations can enhance their asset management practices, leading to improved sustainability, efficiency, and profitability. This holistic approach not only aligns with ISO 55000 but also positions organizations to better meet the challenges of an ever-changing operational landscape.
…. Join the Woodhouse Alumni Communities for exclusive access to further articles
The Woodhouse Alumni Communities have been created to help you stay connected with your peers, Woodhouse tutors & experts, and others embarking on the learning journey
The Woodhouse Alumni Communities have been created to help you stay connected with your peers, Woodhouse tutors & experts, and others embarking on the learning journey
We all work in the area of probabilities and actuarial risk so while all consultancy analysis, training services and information provided within our published material are provided in good faith, no responsibility either express or implied can be taken by The Woodhouse Partnership Ltd for conclusion or actions made by the Client or any other party as a result of our advice or opinion.
