Look beyond physical metrics for true cross-asset management

These days there is a lot of talk about cross-asset management. Over the years, specialists have developed within-asset management systems to varying degrees of sophistication. This has led to improvements in needs forecasting, budget dialogues, and lifecycle design, maintenance, and rehabilitation regime planning.

However, the widespread presence of infrastructure debts means that no program can be fully funded in any asset class. Unsurprisingly, capital planning groups and executives are frustrated when the time comes to address trade-offs between assets, for example, to tradeoff bridge and road projects or overall envelope sizes.

So cross-asset optimization is the new Holy Grail of asset management, but the tools for the first series cross-asset efforts have been described recently as ranging from "subjective to more subjective," and have not done much to address practitioner frustrations.

In our view, the lack of progress is due to not making the required paradigm shifts for cross-asset management. Historically, everything about the asset has been about its physical condition - engineers can measure and model various dimensions, aggregate these dimensions into indices, link conditions to treatments, and so on. However, these conditions are not shared between asset classes, and comparisons of aggregate indices is meaningless. Is bridge condition 65 worse than pavement condition 72? It depends what kind of engineer (or which resident or politician) you are talking to. More importantly, most of the physical condition measures mean little to a customer. What does a customer care about the scour depth on a bridge pier or that the overall bridge condition is 65?

The required paradigm shift in cross-asset management is to frame the question and the metrics in terms of who goes 'cross-asset' on trips - the customer. A customer does not care directly about scour depth. A customer cares about the route being open, safe, and able to handle their required vehicle loads, which are influenced by scour depth, multiple other physical features of the bridge AND physical features of the next asset class 200 meters further down the corridor.

Four steps an agency can take to move towards true cross-asset management are:
1. establish and measure customer levels of service that are indifferent to asset class;
2. quantify and measure the relative importance of customer levels of service changes;
3. within each asset class, build service models that link asset physical condition measures to customer levels of service; and
4. develop an asset management framework containing decision models focused on customer level of service optimization.

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The author, Craig Milligan, P.Eng. advises government agencies on asset management program development with a particular focus on enabling true-cross asset management. He can be reached at craig.milligan@fireseedsnorth.ca.