Tertiary talk


Seven key questions to ask your asset managers

Tertiary Talk - May 2018

By now many institutions will have completed their 2018 capital asset management (CAM) self-assessment and submitted this to the Tertiary Education Commission (TEC).

Treasury’s Capital Asset Management Framework seeks to ensure that Universities, ITPs and Wānanga are effectively ‘preserving and protecting’ the Crown’s investment in education facilities – some $10b in the tertiary sector alone.

The Framework encourages governance and management teams to look at ways to better utilise their asset base to support educational success. The effective management of assets is therefore an essential business process, providing an opportunity to realise organisational efficiencies, improve asset utilisation, reduce operating costs and use capital more effectively.

While the overall results from the 2017 independent CAM reviews showed improvement from 2015 there are several areas that need continued focus. These include:

  • Asset management plans (AMP) – focusing on how we tactically plan for managing the institutions infrastructure and other assets to deliver an agreed standard of service. Across the sector approximately 45% of institutions did not have a formal AMP or the existing plan was more than four years old - with many of the plans not adequately incorporating IT assets.
  • Financial and funding strategies –  ensuring we have robust processes and practices in place to plan for the funding of future capital expenditure and asset-related costs.
  • Asset management information systems – with a focus on how we meet the information needs of those responsible for asset management.
  • Maintenance planning – addressing how we plan and manage our maintenance activities in a manner that ensures we are attending to them proactively.

Asset management requires a lifecycle approach that recognises an asset’s requirements will change during its lifespan. The focus is on ensuring capital assets are being planned for, delivered and maintained in the most cost effective manner.

Here are seven key questions we should be asking ourselves and our asset managers:

  1. Have we got a strategy for the long-term sustainability of our assets?
  2. Do we have good quality up-to-date AMPs for achieving our strategy?
  3. Does our organisation have appropriate asset management skills and experience?
  4. Do we have a structured approach to assessing the condition and performance of our assets?
  5. Are we confident the capital planning process is linked to the organisation’s strategy?
  6. How well do we forecast future demand for the services that are delivered or supported by our assets?
  7. Do we have a backlog of repairs, maintenance and / or asset renewals?  If so, what are we doing about it?

Deloitte has recently assisted several institutions in reviewing their asset management processes and systems for assets that are deemed critical to the on-going operation of their organisation. These reviews have provided a good opportunity to: firstly, ensure there is consensus across the institution as to what assets are deemed critical and therefore warrant priority allocation of resourcing; and secondly confirm that these assets are being effectively managed to ensure the expectations of students, academics and other key stakeholders can be met.

Are you confident your institution understands what its critical assets are, and that these assets are being managed effectively?

For more information on capital asset management contact Richard Bailey richardbailey@deloitte.co.nz


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