What is Asset Management?

The management of physical assets (their selection, maintenance, inspection and

renewal) plays a key role in determining the operational performance and profita
bility of industries that operate assets as part of their core business.
Asset Management is the art and science of making the right decisions and optimi
sing these processes. A common objective is to minimise the whole life cost of
assets but there may be other critical factors such as risk or business continui
ty to be considered objectively in this decision making.
This emerging professional discipline deals with the optimal management of physi
cal asset systems and their life cycles. It represents a cross-disciplinary col
laboration to achieve best net, sustained value-for-money in the selection, desi
gn/ acquisition, operations, maintenance and renewal/ disposal of physical infra
structure and equipment.

Definitions
Asset(s)
Plant, machinery, property, buildings, vehicles and other items that have a dist
inct value to the organization

Asset management
Systematic and coordinated activities and practices through which an organizatio
n optimally and sustainably manages its assets and asset systems, their associat
ed performance, risks and expenditures over their life cycles for the purpose of
achieving its organizational strategic plan
Asset management information
Meaningful data relating to assets and asset management
NOTE Examples of asset management information include asset registers, drawings,
contracts, licences, legal, regulatory and statutory documents, policies, stand
ards, guidance notes, technical instructions, procedures, operating criteria, as
set performance and condition data, or all asset management records.
Asset management objective(s)
a) specific and measurable outcome or achievement required of asset system(s) in
order to implement the asset management policy and asset management strategy; a
nd/or
b) detailed and measurable level of performance or condition required of the ass
ets; and/or
c) specific and measurable outcome or achievement required of the asset manageme
nt system.

Asset management plan

document specifying activities and resources, responsibilities and timescales fo
r implementing the asset management strategy and delivering the asset management
objectives.
Asset management policy
Principles and mandated requirements derived from, and consistent with, the orga
nizational strategic plan, providing a framework for the development and impleme
ntation of the asset management strategy and the setting of the asset management
objectives.
Asset management strategy
Long-term optimized approach to management of the assets, derived from, and cons
istent with, the organizational strategic plan and the asset management policy
NOTE 1 The asset management strategy converts the objectives of the organization
al strategic plan and the asset management policy into a high-level, long-term a
ction plan for the assets and/or asset system(s), the asset portfolios and/or th
e asset management system.
NOTE 2 The high-level, long-term action plans for the assets and the asset manag
ement objectives are normally the outputs of the asset management strategy. Thes
e elements together form the basis for developing more specific and detailed ass
et management plan(s).
Asset management system
organization’s asset management policy, asset management strategy, asset managemen
t objectives, asset management plan(s) and the activities, processes and organiz
ational structures necessary for their development, implementation and continual
improvement.
Asset portfolio
Complete range of assets and asset systems owned by an organization.
Asset system
Set of assets that interact and/or are interrelated so as to deliver a required
business function or service.
Enablers (asset management)
Supportive systems, procedures, processes, activities and resources that enable
an organization to operate its asset management system efficiently and effective
ly.
Functional policy
Specified approach, rules and boundaries set out by an organization, that provid
e direction and the framework for the control of specific asset-related processe
s and activities
NOTE Functional policies, strategies and objectives relate to asset management a
ctivities or processes, such as capital investment, construction methods, mainte
nance and purchasing, These should not be confused with asset management policie
s, asset management strategy and asset management objectives, which are cross-fu
nctional, considering the life cycle optimization of all relevant activities.
Life cycle
Time interval that commences with the identification of the need for an asset an
d terminates with the decommissioning of the asset or any associated liabilities
.
Optimize
Achieve by a quantitative or qualitative method, as appropriate, the best value
compromise between conflicting factors such as performance, costs and retained r
isk within any non-negotiable constraints
Organization
Company, corporation, firm, enterprise, authority or institution, or part or com
bination thereof, whether incorporated or not, public or private, that has its o
wn functions and administration
Organizational strategic plan
Overall long-term plan for the organization that is derived from, and embodies,
its vision, mission, values, business policies, stakeholder requirements, object
ives and the management of its risks
Sustainable
Achieving or retaining an optimum compromise between performance, costs and risk
s over the life cycle, whilst avoiding adverse long-term impacts to the organiza
tion from short-term decisions