Module 10. Linking asset management, governance and projects

A holistic approach

Our specific goal in this eBook was to review the asset management (AM) and governance fields and showcase their strategic alignment with project management. Both areas, in our opinion, are inextricably connected. At the moment, there is only a small amount of literature that explicitly discusses the implementation of governance elements in AM programmes. However, by examining best practices, as well as presenting the numerous successful frameworks supporting both disciplines, we intended to reveal the important role that each plays in the other’s success or failure.

When discussing governance in Module 5, we focused on corporate governance (i.e., governance of organisations providing guidance of how the business operates, directs and controls) and the governance of portfolio and/or project management as we positioned these theories under the umbrella of “business”.  It is under business processes that key governance functions such as decision-making, integration and control resides. In relation to AM, it is also under business and good governance processes that the realisation of asset value occurs. Remember that assets are not only tangible, but can also include knowledge, HR, skills, and documentation, amongst other intangible assets. Therefore, it becomes critical for an organisation to have the right mechanisms to foster a culture in which their strategy and values are well managed and in turn align with the interests of their key stakeholders. We can simplify this by stating that if the organisation attains this culture, then it can result in good governance and asset value realisation.

As depicted in Figure 26, an organisation’s strategy must be supported and enabled by their key stakeholders as well as a leadership that helps cultivate an organisation’s culture of integrity, leading to positive performance and sustainable asset life cycle management. Their asset and governance mechanisms must be aligned with the organisation’s objectives while empowering better decision-making and long-term strategic planning. Having the right competencies, capabilities, roles and responsibilities, transparent and clear reporting processes in place, and effective PM methods and/or PMO will form the basis of a robust framework enabling value creation for the company.

Risk mitigation is also important. Companies with a high concentration of assets can benefit from risk-based AM since it allows them to better understand the risks they face in relation to their company value in an efficient manner. By incorporating a value-based approach into the risk management process, the overall wealth of the organisation and its stakeholders is maximised.

It is possible that competence and capability development will be the major emphasis of a well-resourced AM strategy, as this would entail developing the essential objectives and frameworks. A PMO with dedicated AM and governance project managers, for example, may assume responsibility for the implementation and the maintenance of best practices at the departmental level, in a similar manner to that outlined above. In addition, as showed in Figure 26, ongoing performance, monitoring and improvement activities are key activities within the PMO. It is also through the use of professional networks and communities that businesses are able to better organise the life cycle of their assets while also promoting cooperation, information sharing, transparency, and the expansion of their workforce. Realising an organisation’s goals guarantees that openness and accountability are maintained across the organisation, resulting in effective/good governance because of these efforts.

Organisation design

As project managers, we are frequently presented with the challenge of determining whether the organisational structure of the project host is the most effective way of achieving their strategic objectives or not. To have successful governance, it is necessary to have AM and governance structures that are simple, straightforward, and explicit. If an existing operational model has been carefully planned and implemented, this can provide a clear and consistent blueprint for how these various frameworks should be structured and managed in order to achieve the organisation’s strategic objectives.

There is no consistent approach to designing the structure of an organisation; however, to help bring clarity, we have listed some characteristics that are common to good and productive AM and governance frameworks:

• AM strategy implementation is aligned with the organisation’s strategic vision, purpose, and values.
• Key positions are filled with skilled staff, ensuring that important functions are adequately resourced and always covered. Zero job vacancies.
• Recognition and capitalisation of present labour competencies and capabilities, as well as the exploration of avenues for the development of new skills, are critical. This can be accomplished via the use of gap analysis and succession planning techniques.
• Incorporation of the company’s current human resources policies and processes into key planning documentation.
• During the decision-making process, key stakeholders need to be involved. For example, the views of management, customers, and workers should all be taken into consideration.
• The roles and duties of each individual, as well as the communication channels and decision-making power, will all be clearly defined. Two keywords for this process: transparency and clarity.
• Figure 27 presents a framework able to assist in the facilitation of interdepartmental contacts as well as the integration of AM and governance objectives throughout the company.
• Ascertain that the performance of the AM and governance framework can be monitored, measured and be in a position to undertake continuous improvements.
• Evidence of communities of practice coordination and collaboration across life cycle is also required for effective AM and governance.

Keep in mind that for any organisation, the right structure will be one making it possible to adapt and evolve with the times in order to meet future AM and governance requirements.

In conclusion, we have established the value proposition associated with the integration of both AM and governance. Remember, that no matter the shape or format of the selected frameworks or models used, AM and governance models have to be effectively implemented to supplement the existing structures that promote continuous improvements. These models can’t be linear processes, they need to be more cyclical. After all is said and done, the final result that project managers aim to achieve is a successful AM and governance framework that reaches its goals, introduces new ways of working into the workplace, and creates the foundation for future growth. A successful AM and governance framework requires effective communication, stakeholder management, and leadership.