There seems to be a lot of confusion in the marketplace about Asset Management. Since the 2014 publication of the new standard for Asset Management, ISO 55000, vendors in the maintenance, reliability, and asset management spaces have jumped on the bandwagon and spun their stories to brand their products, services, and solutions with the latest-and-greatest buzz word: Asset Management. It's created a lot of confusion.

Manage Assets
What we know is mankind has always managed assets, whether it's a valuable horse, a cart or carriage, farm land, a structure such as a house, through to modern infrastructure, plants, and equipment that produce the goods and services demanded by a modern economy.

We manage assets to varying degrees of maturity from when they are acquired or built, through to when they are no longer relevant. We call this the asset lifecycle: plan-build-commission-operate-remodel&rebuild-decommission&recycle. At the heart of managing assets are tactical activities that skilled technical people, primarily tradespeople, engineers and vendors, perform on the assets. Assets must be managed to be kept in good working order. The degree of asset reliability depends on the maturity of the asset-intensive organization and it's people.

Managing assets is about how facilities, plants, equipment are cared for throughout the asset lifecycle. It does not include Asset Management.

Asset Management
Asset Management is a discipline, it's about governance. At the heart of Asset Management is a vital connection between the strategy of the business and operations, including how assets are managed. Through this link, executives can see the contribution physical assets make to their strategic objectives and therefore the organization's (triple) bottom line.

Asset Management has a broader focus than Managing Assets, encompassing the organization top-to-bottom and end-to-end across all functions and departments. The importance of this view was formalized by The Institute of Asset Management (IAM) in the UK that sponsored the development of the Publicly Available Specification, PAS 55, for Asset Management published in 2004, then updated in 2018. This important body of work was used as the foundation for the development of ISO 55000 involving representation from over 35 countries, published in 2014.

Asset Management is about deriving value from physical assets. It includes managing assets.

Awareness is slowly growing about these distinctions.

I'll continue to blog about various aspects that distinguish Asset Management from Managing Assets. Stay tuned!