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Realizing Commercial Value from ISO55001 Aligned Asset Management

Realizing Commercial Value from ISO55001 Aligned Asset Management by Dr. Bob Platfoot

Realizing Commercial Value from ISO55001 Aligned Asset Management

by Dr. Bob Platfoot

This article demonstrates the commercial value for an organization improving its entire enterprise asset management approach in line with the ISO55001 standard. An organization implementing ISO55001 must first come to terms with clear asset management objectives, a planning process that optimizes the investment portfolio which, in turn, is delivered by efficient lifecycle processes, and a persistent and comprehensive continual improvement process that is documented and controlled.

Commercial value is realized by the removal of waste in asset management delivery so that the investment is prioritized in accordance with measured business outcomes. An organization must be efficient in determining what it must invest in and then deliver this work in a cost optimal manner that maximizes outcomes for the available resources and budget. The outcomes may be valued in terms of performance and capability or risk mitigation.

Overview of an ISO55001-Compliant Asset Management System

Unlike other contemporary frameworks defining an asset management system, ISO550011 does not specify leading practice methods and systems. Rather, the standard requires:

A top-level framework, or a definition of all possible processes in an asset management system, is shown in Figure 1. The purpose of such a framework is to explain to all stakeholders the entire asset management system and assist them in understanding how their responsible areas fit in with other parts of the business. This is essential to ensure planning and work processes are not siloed between teams and continual improvement is undertaken across the enterprise, applying a consistent approach.

Figure 1: An asset management system

What ISO55001 does not do is specify required practices and methods within the functional elements shown on the framework diagram. For example, a maintenance approach cannot claim to be in accordance with ISO55001. To meet ISO55001 requirements, the process must be documented, demonstrably able to manage risk, develop people’s competencies and improve in a persistent manner.2

The most complex process of all is the planning process, where you determine what is the right work to be done at any time on the assets. The subordinate process, which sits underneath the framework diagram, is shown Figure 2a. Getting this process right is essential for the resilience of the business against external shocks, such as market demand, aging fleet, extreme weather and so forth.

Two of the most important aspects of this planning framework are the use of data and knowledge of asset health to drive work forward. Asset health and other considerations, such as operational criticality and obsolescence, lead to risk profiling for investment opportunities. Hence, individual work entries in the asset management plan can be risk profiles, as shown in Figure 2b, suggesting periods when low risk items may be deferred and high risk work (e.g., risk > 3) needs to be supported. The figure shown is typical of asset management plans, where the expenditure in the first four to five years is relatively firm and longer term forecasts are still immature.

Figure 2: Asset planning

Figure 2a: Framework for an asset planning approach

Figure 2b: Asset management plan report: risk profile of proposed expenditure

Benefits of the ISO55001 Asset Management System

The benefits of the ISO55001 asset management system are tabulated in Table 1 as a checklist to which an organization should aspire. Two attributes are cited for each element:

Note that where the same cost benefit occurs across more than one element, both elements must be in place to achieve the full potential saving. All potential savings are a function of the maturity of the organization at the time of commencement of the asset management system implementation.

These improvements can be achieved by individual leading practices that are well understood outside the ISO55001 framework. The ISO55001 framework enables these initiatives and streamlines their introduction as part of the standard way to do business. More importantly, ISO55001 practices and organizational behavior locks in these improvements.

TABLE 1 – Outcomes of Key Asset Management System Elements
Asset Management Policy

Unarguable statement of what is important for each team member to deliver as part of their work, leading to a desired standard for asset management across the organization

Value: Stabilizes the entire organization using some common goals so teams work together and people are confident they can defend their decisions and demonstrate value

Strategic Asset Management Plan (SAMP)

Design of the asset management system brings discipline to the business, aligning existing processes and strengths into the system and identifying gaps that need to be improved:

  • Stakeholder requirements for capable asset performance
  • Measurable objectives that define good performance across many functions of asset management
  • Information systems requirements
  • Contracting and resource management strategy
  • Contingency planning processes
  • Integrated planning processes, balancing business growth with sustaining existing assets
  • Operational processes that need to be managed and for which competencies of the people can be tracked and supported
  • Performance measurements and auditing processes to identify opportunities for improvement
  • Continual improvement planning and delivery

Value: An easy to read reference document that specifies what must be implemented across the organization and why; Outcomes include gap identification and initiation of improvement processes that benefit teams and remove waste from the organization

Asset Management Plan

The forecast of work to be undertaken on the assets with the following planning horizons:

  • 1-2 year schedule that is risk prioritized and defensible on the basis of supporting information
  • 2-5 year options schedule that allows better grouping of major work into economically optimum packets (i.e., bring some work forward and defer other work)
  • 5-20+ year strategic view of expected times for major capability renewal and timing for significant investigations and contingencies

Such planning is supplemented by appropriate strategies, such as:

  • Maintenance tactics development
  • Condition monitoring
  • Fluids management
  • Statutory spares management

Value: A bottom-up, risk prioritized plan that covers all assets and allows assessment of investments on a common basis and tests decisions of deferrals, as well as expediting work on a risk versus cost basis

Cost Benefit: Numbers 1, 2 and 5 on the list following this table

Asset Planning Framework

A top-level framework that allows diverse groups to undertake their work and then bring their funding requirements together in a cohesive plan, which can rank priorities for quite different needs

Value: Often the determination of work to be undertaken is a bidding process that may not guarantee that the right work is endorsed and gets done at the right time; This process balances value through assessment of performance, cost and risk

Cost Benefit: Numbers 1, 2, 3 and 4 on the list following this table

Risk Management

Implementation of the corporate risk management processes in:

  • Asset criticality ranking
  • Prioritization of work
  • Development of contingency plans
  • Management of work

Value: Most organizations have a top-level risk management framework and some specify down to asset criticality ranking, etc.; This approach ensures all aspects of the asset management system are risk assessed and that risk is used as a decision-making determinant, for example, prioritizing the optimum option

Cost Benefit: Numbers 2 and 7 on the list following this table

Operational Process Design

A common approach to specifying how work is undertaken in elements, such as:

  • Feasibility, design engagement and construction
  • Project delivery, including commissioning
  • Maintenance
  • Operations support (e.g., switching, isolations, etc.)
  • Shutdown management
  • Supply management
  • Defect elimination
  • Value: Ensures that corporate processes are documented with no gaps in the functionality and their capability to reduce risk is clear and the conduct of the work is measured; The means is established once the competency of the relevant personnel is developed

    Cost Benefit: Numbers 3, 4, 5 and 6 on the list following this table

Continual Improvement (CI)

An integrated approach to continual improvement that covers:

  • Performance measurement
  • Internal auditing
  • Corrective and preventive action management
  • Continual improvement plan
  • Continual improvement processes (e.g., 6s where the define, measure, analyse, improve and control (DMAIC) approach is well aligned for this work)

Value: Ensures CI takes place in a consistent manner across all teams and is measured to track value

Cost Benefit: Numbers 6 and 7 on the list following this table

Documentation Specification

The consolidation and management of control documents that govern all aspects of asset management, typically based on existing documents and with enhancements and extensions as defined by the SAMP

Value: Many organizations have a proliferation of control documentation, some of which is obsolete; This ensures a precise mix of documents is specified, which need to be maintained and used in competency development

Cost benefits obtained from these initiatives:

  1. Reduction in overall capital project portfolio by 10 to 30 percent through removing nugatory work or consolidating work for greater efficiencies
  2. Justification to lift per annum capital spending on cash-starved assets by 100 percent, thereby reducing risk
  3. Reduction in churn of capital projects per year from 20 percent to 5 percent
  4. Improvement in cost estimation from 50 to 80 percent to 15 percent at point of concept
  5. Productivity gain leading to a maximum of 10 percent of operating costs
  6. Commitment to defect elimination and consistent leading asset strategies can lead to improvement of 30 percent of maintenance outlay
  7. Continual improvement generating hundreds of small tasks, etc., has improved overall equipment effectiveness (OEE) of key assets by up to 20 percent over a two to three year period

Implementation of the Asset Management System

The process to implement an asset management system observes these principles:

There are two parts to the implementation:

  1. Establishing the governance of the asset management system so that all stakeholders know what is expected of them and there is a resource to both train people and audit performance;
  2. Change management, whereby internal, multidisciplinary teams work on capability improvement projects that focus on one or more elements of the asset management system.4

Both work streams must be managed as well-defined projects with good project management practices, including schedules, risk management and communication plans. In time, these initiatives will not be unusual additions to normal business, but will represent aspects of the continual improvement process that ISO55001 endorses as a key pillar of asset management.

Continual Improvement in the Asset Management System

The continual improvement plan tracks a myriad of small initiatives, who is responsible for each and when each will be completed.5 It is a control needed to ensure that the performance and resilience of a complex system will continue to lift or be retained at a desired level of capability. This involves many tasks associated with people, plant, processes and systems, each requiring a task owner and scheduled completion data, plus a statement of the risk each task is mitigating.

Good performance tracks the creation per month of new tasks in the CI plan and the close out per month of completed tasks registered in the plan. While a central owner is accountable for the plan and the integrity of its information, the plan must encompass multiple teams who often need to work together. An example of such a plan, shown in Figure 3a, is an extract from a plan for a complex facility.

In Figure 3b, an analytic exercise identifies multiple preventive maintenance (PM) strategies in a complex facility being undertaken with very little repairs needed for these assets. Hence, it was determined there was scope to formally review the risk being managed, as well as regulatory obligations, and, where possible, reduce the effort in these high frequency PMs.

Figure 3: Managing the CI plan

Figure 3a: Registered item in the CI plan

Figure 3b: Analysis justifying the CI item

This example highlights the need for measurement and proactive consideration of complex facilities and then an organized, documented approach to manage the resulting hundreds of CI tasks recommended from such analyses. The cost savings potential calculated in this case represented 44 percent of the total PM maintenance budget, which is obviously a prize to be sought.


ISO55001 represents an opportunity for an organization to tailor its own approach to asset management within a robust framework. While ISO55001 does not dictate how to undertake specific asset management tasks, it does specify the key elements that should be present. It is not ISO55001 that delivers cost savings to an organization, but teams who believe in and have the discipline to utilize the framework will certainly deliver savings through the removal of wasteful practices.

ISO55001 is about the management of risk, cost and performance in a balanced manner that seeks to unlock business value from the utilization of assets. Measures of these attributes pervades each of the elements that makes up an asset management system.

ISO55001 must be implemented and then sustained by people. The teams need guidance on what the organization expects of them and they need time and opportunity to apply the requirements in a way that makes sense for the local culture, operational demands and level of organizational capability within their own business. As they do so, measures of cost savings, risk mitigation and performance lift are essential and part of the ISO55001 framework, which will persist in the new culture.


This article is dedicated to the people of many organizations throughout Australia and New Zealand who have supported its research by injecting their own ideas and implementing the concepts.


  1. ISO55000:2014(E). Asset management – Overview, principles and technology, 2014. https://www.iso.org/standard/55088.html
  2. Global Forum On Maintenance & Asset Management. The Asset Management Landscape, Second Edition, 2014. http://www.gfmam.org/files/isbn978_0_9871799_2_0_gfmamlandscape_secondedition_english.pdf
  3. Berling, Clas. “The human side of continuous improvement.” International Journal of Human Resources Development and Management, 2001, Vol. 1, No. 2/3/4: pp183-191.
  4. Salah, S.; Rahim, A.; and Carretero, J. “Total Company-Wide Management System (TCWMS): culture change management considerations.” International Journal of Strategic Change Management, 2011, Vol. 3, Issue 4: pp260-280.
  5. Nordin, N.; Deros, B.; Wahab, D.; and Rahman, M. “A framework for organisational change management in lean manufacturing implementation.” International Journal of Services and Operations Management, 2012, Vol. 12, Issue 1: pp101-117.

Prior to this issue going to press, Dr. Platfoot was honored with the recognition of a Fellowship of the International Society of Engineering Asset Management. Congratulations!