Best Way to Tracking Operation and Maintenance Cost

“Based on experience at different places, what is the best way to track O & M (operation and maintenance) cost?“

Ross replies:

So just to our listeners there, I got the job of rewriting the Asset Information System section of the International Infrastructure Management Manual back in 2011 when it was updated.

Thus, there’s an area of specialist consulting expertise recognized by my peers across Australasia.

And in that section of the manual, I put a few guidelines based on nearly 30 years of working with the top systems. There’s a whole heap of things that you need to walk your way through before you invest in a system.

And the first answer to that question is you need to look at your governance.

So what are your management and your governances requirements for your organization? And that would be conditioned by your legislation and regulations as well.

The second thing you need to answer is what outputs do I need, what questions am I trying to answer.

And that is a long journey because when you’re starting, you don’t even know what the questions are, let alone what you can answer.

So there’s plenty of guidelines around that. But have a look, as an organization and based on whatever state and local and federal regulations you’re having to meet, what questions do I need to answer?

Once you know that, then the third thing you need to look at is what information do I actually need to answer those questions.

One of the mistakes we made in New Zealand when we were a lot younger and a lot newer to this (infrastructure asset management practice) was, we bought these big computer systems and we filled them up.

And we said, oh we got all this information, what are we going to do with it? Oh I know, we can do this and this.

That’s not sustainable. We never had the resources to keep that going.

And so then the information, the data in the systems, degraded and everybody lost confidence in it and all went, you’re into recycling, replacing everything.

So governance and then outputs, then inputs.

Then you look at your business processes because you’ve got existing business processes within your organization. Be that out in the field, with the O and M guys or in the office.

If you have got, or if you go into some sort of system or even try to improve your current paper system or whatever it is you’re doing, you have existing business processes that you have developed for a very long period of time for very good reasons.

Once you understand the outputs, what your managers and your governors need from you, the inputs that you need, and how it’s going to fit your business processes, then you’re in the place where you can actually answer the questions about what computer program do I want.

And that can be as simple as a spreadsheet or a very simple GIS up to a very sophisticated database system depending on the size and the answers to those previous questions.

For some organizations, they will have one general ledger line that says, “operations and maintenance” for the entire organization, only on that level, they will know they spend for argument’s sake, a 100 thousand or a million or 10 million dollars a year or whatever figures are on O & M.

That would be all they know, and they know that’s been stable, or it’s going up or it’s going down for a year.

It comes down a level to that, you might say, well actually we look after fifteen towns on the system or ten towns, so I might try breaking that O & M costs out by towns.

So I know one town cost more than the next. You come down a level below that, then you will be saying well, what are my O & M cost for my pipe network or my pumps or my treatment facilities.

And so you could run those cost on that level or be giving you different outputs and different information.

Where some of the authorities in Australasia and New Zealand have gotten to, is that we are picking up O & M cost for every single pipe break and holding that against the individual asset. And that’s taking us fifteen years to get to.

The reason we got there is that we are starting to get into the replacement of that 1950s and 60s infrastructure that went in and it starts coming back to where, how do I know what the economic cost of those breaks and repairs are versus the cost of replacing it.

And when you’re starting to try and answer those sort of questions, you can do it by risk and do it by the whole network or you might be holding break cost of the whole network or whatever it is.

But some authorities will say,  no we want to know that on individual pipeline basis and so they collect that infrastructure asset management information.

But it has to be driven by what outputs you need. And that’s also part the question around the computer system.

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