Global Trends

The interrelations between asset and project management

9 August 2018 / 9:56

hrough a series of blogpost articles I´d like to highlight the interrelations of project management with other disciplines. This time my focus is on asset management. According to ISO 55000 [https://en.wikipedia.org/wiki/ISO_55000], assets are an item, thing or entity that has potential or actual value to an organization… Value can be tangible or intangible, financial or non-financial, and includes consideration of risks and liabilities… Physical assets usually refer to equipment, inventory and properties owned by the organization. Physical assets are the opposite of intangible assets, which are non-physical assets such as leases, brands, digital assets, use rights, licences, intellectual property rights, reputation or agreements.” Assets may be bundled to an asset portfolio, which might encompass multiple sub portfolios.

For example, an energy provider may have an asset portfolio of all assets related to provision of renewable energy. This portfolio may be subdivided into a sub portfolio of wind, hydro, solar and other energy assets. Or it may be subdivided into a portfolio of asset acquisition, asset development, asset operations and asset improvement in the area of renewables. Asset management will take care for developing an asset strategy derived from the organisation´s overall strategy. It will develop future scenarios for the organisation´s renewable energy assets, derive a roadmap of activities (projects) and establish a set of KPIs for asset planning, monitoring and controlling.

Obviously, all this is a prerequisite for project, programme and portfolio management. Asset portfolio considerations are the basis for project portfolio management. Questions such as: “Which assets are to be build next year? Do we have enough resources to perform the asset development projects in time, quality and budget? What are the priorities for the multiple projects to be performed in a sub or a portfolio? How do we balance the available financial and human resources between the asset respective project portfolios?”

Both disciplines are heavily interrelated. Asset portfolio planning is impossible without the planning information from projects, programmes and project portfolio. Based on project information, the project portfolio manager may perform scenario analysis, showing the development paths of all projects based on their interdependencies and schedules. Asset management is impossible to do without the project management and vice versa. Therefore, project, programme and portfolio managers in organizations with a strong focus on assets should familiarize themselves with asset management and start aligning their activities with the asset management system.

Source: IPMA

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