Chapter 7

Lessons for the United States

The countries, states, provinces, and local governments the scan team visited during this study provided a rich experience in the challenges and benefits associated with asset management. It is not surprising, therefore, that a number of “lessons learned” for the United States have resulted from this scan.

1. Asset management practices and processes have been used successfully to obtain funding for transportation infrastructure, when competing for funds with other government programs and even during budget declines.

2. Asset management as an organizational culture, business-oriented decisionmaking process, and policy direction is a critical foundation for transportation programs facing significant capital renewal and preservation needs. All of the countries the team visited adopted asset management as a major policy direction for national, state, and in some cases local transportation programs.

3. Given the importance of asset management in changing an organization's culture, it is important to think carefully about what role asset management will play in the agency's program delivery effort. In addition, the eventual acceptance of asset management in an organization's culture will occur when the benefits of such an approach are evident.

4. Adopting an asset management approach in an organization does not mean that everything has to change. In the cases examined, agencies had clearly adapted their asset management efforts to the organizational context. One consequence of this is that incorporating an asset management culture into an organization requires a long-term commitment from top management.

5. The principles and benefits of asset management were not linked to agency downsizing or outsourcing of agency services. This is a common misperception associated with asset management efforts.

6. Creating asset manager positions or at least assigning responsibilities for the asset management function is an important foundation for an effective management program. Such a position or agency unit should report to the top management in an organization. This not only provides a focal point for asset management activities, but also can foster a champion for asset management who can act as a catalyst in the organization.

7. All of the asset management programs the team studied used the concept of risk for establishing investment priorities. Most U.S. asset management experience does not have the same level of application. Risk concepts need to be incorporated more systematically into U.S. asset management efforts.

8. Based on experience in Queensland and England, asset values determined using the asset management system provide a more realistic and useful representation of the value of physical assets. This value supports both the accounting and management functions as opposed to straight-line depreciation, which does not reflect the true value of the assets and serves no purpose for management.

9. The most common performance measures used in the scan asset management examples related to condition, function, and capacity of the assets. In some cases, these categories of performance characteristics can provide the basis for cross-asset evaluation and investment prioritization. Engaging stakeholders in setting performance targets is the most effective way to calibrate fact-based assessment of asset needs with public desires. Stakeholder buy-in to the asset approach and performance measures lends credibility to the effort.

10. Asset management should be strongly linked to planning and system operations. It was apparent in several cases that efforts had been made to institutionalize asset management concepts into state/local planning efforts, and to look at system operations strategies as complementary to asset-based improvements.

11. Perhaps one of the most important lessons for the United States was the integration of asset management concepts into public-private partnership agreements. Several agencies that have entered into such agreements for toll roads have learned from experience that a comprehensive asset management effort needs be part of any agreement to ensure the asset is returned to the owner in good condition.

12. Asset management efforts are data driven, but developing an asset management culture in an organization does not have to wait the many years it would take to develop database information systems. Agencies can start with modest efforts and evolve over time into a more comprehensive perspective.

13. Data collected should have a clear purpose and be directly related to asset management decisionmaking. Data-collection costs should be tracked and data itself treated as an asset, with the same design, build, operate, maintain, and life cycle cost analysis used for other assets.

14. Tradeoff analysis techniques are more complex than simply assessing priorities in one asset category. The scan team did not find any case where technically based cross-asset tradeoff tools were used. This is an important area for further development in the United States.

15. Cross-functional teams, consisting of engineers, finance analysts, operations staff, and communications experts, can serve as the best means of understanding the many different aspects of asset management, such as data collection, strategy development, and quality assurance.

16. The use of focus groups to establish and/or validate resource apportionments for different asset categories is a useful tool in asset management programs.

17. Before contracting out core services, performance-based management systems should be in place that allow the infrastructure owner to know what service levels are required. This was described in the scan as being a “knowledgeable owner.”

18. Although initial cost savings may be realized by contracting out maintenance services, such program delivery is kept most efficient when both public and private providers have some ability to compete to provide service. In addition, it was apparent in most of the sites visited that although the number of maintenance personnel in agencies declined following outsourcing, the contract supervision and finance staffs have either stayed at the same levels or increased.

19. Asset management training for all levels of transportation officials is an important initiative for changing the culture of an organization and establishing asset management expectations among key stakeholders.