Episode 4: Asset Management The Standards

BSI PAS 55: 2008 is a publicly available specification (British Standards Institution) for the optimized management of physical assets. It defines what good asset management means.

PAS 55 has been developed over six years by a group of more than 50 public and private organizations. It applies to any organization where physical assets are a key and critical factor in achieving business goals.

The specification was issued in 2004. The specification is used within:

  • public services and property
  • utilities
  • transport
  • production
  • oil and gas extraction
  • defense
  • pharmaceutical
  • technological
  • heavy industry

PAS 55 provides detailed guidance and examples of good practice in all aspects of:

  1. acquisition;
  2. possession;
  3. disposal of physical assets

A list of 28 good practice points in asset management is included. There is also an extensive glossary of key terms.

The specification defines the approach needed to meet the conflicting requirements of the stakeholders. It aims to achieve the best value for money and achieve significant improvements in performance. PAS 55 enables all aspects of the asset life cycle to be integrated:

  • the first recognition of the need for design
  • acquisition
  • building
  • commissioning
  • use
  • support
  • refresh
  • modification and/or final disposal

History and content

PAS 55 is a two-part document. Their titles are:

  1. PAS 55-1: 2008 Specification for Optimized Management of Physical Assets
  2. PAS 55-2: 2008 Guidelines for the implementation of PAS 55-1

The first version of PAS 55 was published in 2004. It answers questions stemming from the privatization of the utilities and transport sectors in the United Kingdom. With the development of the asset management discipline, problems with the first version arise. A complete revision was made in 2008.

As early as 2004, BSI PAS 55 defined a framework for the asset management system:

  • Aligning all the goals of the organization – from senior management to those of technicians working on the smallest assets.
  • Consistent decision-making to better balance potentially conflicting resource requests between asset groups, but also between asset-impacting initiatives such as safety, the environment, corporate social responsibility, and more
  • Using risk to support these decisions. Thus, they are focused on achieving the necessary organizational results.
  • Balancing long-term asset needs with short-term business planning cycles.

This management system enables organizations to incorporate asset management and effective decision-making processes into the way they do things within their organization.

At the end of 2008, the British Asset Management Institute began work to improve several international asset management standards. This led to the formation of ISO / PC251

The 28 points of PAS 55

PAS 55 guides how to build an asset management system that supports the optimal management of physical assets. The main features are:

  • 28 requirements for an appropriate physical asset management system
  • Plan-Check-Act cycle to support successful implementation and alignment with other standards
  • A generic model for a suitable system

The 28 requirements are organized into the following groups:

  • General requirements – for example, the need to control asset management activities
  • Asset management policy
  • Asset Management Strategy, Objectives and Plans
  • Assets and Assets Management – Requirements for people, processes, and data to effectively manage the system
  • Implementation of the Asset Management Plan – requirements for the implementation and control of “life cycle activities”; managing the tools, facilities, and equipment needed to execute the asset management plan
  • Evaluation and improvement of results – system audit, measurement, and monitoring requirements
  • Management Review – Specific Requirements for Senior Management to Monitor System Performance and Take Action to Correct It

ISO 55000 and the destiny of PAS 55

In 2010, the International Organization for Standardization (ISO) began developing its own set of asset management standards – ISO 55000. The Asset Management Institute, as well as many other similar organizations around the world, participated in the development of this standard. The release of ISO 55000 is in January 2014.

PAS 55 was replaced and officially withdrawn in January 2015 (12 months after ISO 55000 was launched).

ISO 5500X – Extend your knowledge

With ISO / PC251, experts have been tasked with developing three international standards. Their role is to determine the framework of the asset management system.

The goal of ISO / PC251 was to broaden the understanding of what it means to manage an organization’s assets.

This raised some big questions at the beginning:

  • What is the meaning of the word asset?
  • What do we mean by asset management?
  • What do we mean by the asset management system?
  • What do we mean by value?

History of development

The International Organization for Standardization (ISO) accepts PAS 55 as the basis for the development of the new series of international standards ISO 55000.

A preliminary meeting was be held in London in June 2010. Thereafter, four formal meetings of the PC251 Full Committee were held in:

  1. Melbourne (Australia)
  2. Arlington (USA)
  3. Pretoria (South Africa)
  4. Prague (Czech Republic)

This resulted in two cycles of work projects, two cycles of committee projects and the status of the International Standard Project (DIS). The standards were due to January 10, 2014.

Alignment with other standards

The ISO 5500X family of standards:

  • ISO 55000 – Defines overview, concepts, and terminology in asset management
  • ISO 55001 – Defines the requirements for an asset management system
  • ISO 55002- Guides the interpretation and implementation of such a management system
  • ISO 55010 – Guidance on the alignment of financial and non-financial asset management functions
  • ISO 55011 – Guides developing government asset management policies (UNDER DEVELOPMENT)

It is suitable for integration with other major management systems such as:

  • ISO 9001 – Quality Management
  • ISO 14001 – Environmental Management
  • OHSAS 18000 – Occupational Health and Safety
  • ISO 31000 – Risk Management

Changes from PAS 55 to ISO 55001

All organizations face challenges. Stakeholders have growing needs and expectations. Costs must be justified by sound and well-proven business plans. And the risk? Oh, the risk…

PAS 55 and ISO 55001 have become an international model for successful and effective asset management. But what are the differences between them?

A different structure: The ISO 55001 standard was one of the first to be developed under the new ISO “Annex SL” protocol. All ISO management system standards have been prepared and updated under a template. It consists of 8 clauses and 4 annexes. They provide the terms, definitions and actual shared titles and text of the clauses. This is quite useful for organizations that use multiple models of management systems such as environment, health, and safety, quality and asset management.

The new definition of asset management: ISO 55000 defines asset management as the management of physical assets is a coordinated activity aimed at unlocking their full potential.

And what was an asset? One significant difference between ISO 55000 and PAS 55 is the definition of an asset:

“An asset is an object that has potential or actual value for an organization.”

Thus, there is no restriction on asset management to physical ones only. ISO 55000 is intended to be used primarily for the management of physical assets, but may also apply to other types of assets.

The conclusion we can make: Let’s try to interpret the new meaning of an asset? An asset is an object that has potential or actual value for an organization.

CONSEQUENCES: You need to think about what elements you want to include in your asset management system.

This “value for one organization” can be financial or non-financial. This means that intangible assets such as know-how, supply chain alliances, intellectual property, etc. can also be managed in a manner that meets recognized asset management standards.

Organization context: Internal and external problems are identified. Asset management goals must be aligned with organizational goals.

Stakeholder needs and expectations: Stakeholders, their expectations and requirements occupy a central position. Criteria for decision making by the AM are determined.

Asset Management Objectives: AM objectives must meet stakeholders’ and other requirements. Ensure alignment with organizational goals, AM policy. Goals should be established using criteria for decision making by the AM.

Planning to achieve the goals: There is a need to identify and document:

  1. decision-making methods and criteria
  2. the processes and methods used to manage the life cycle of assets

Planning and control: More emphasis on process criteria, control, security and risk management.

Outsourcing: The requirement to assess the associated risks and monitor performance.

Monitoring, measurement, analysis, and evaluation: Three specific areas of AM that need to be evaluated and reported – what, how and when. Includes requirements for risk management reporting and stakeholder reporting.

Conclusion

We looked at the common and different sides of PAS 55 and the ISO 5500X package. We can conclude that PAS 55 and ISO 5500X are very similar in terms of the overall content.

However, the ISO 5500X set of standards offers a much more detailed and complete document. That way it reduces the possibility of misinterpretation of any goals that are open to any organization.

Thanks to it we can combine:

This will give you more value and more consistency.

So, we will see you next week when we would focus on what’s next for the asset management and upcoming trends in this domain. Bye for now 🙂

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