After a brief from the technical person, Heather gave the webinar introduction, greeting the participants and presenting Ross for the first topic.
Good morning or good afternoon everyone, depending on where you are. We’re here for another installment of Ask the Experts for asset management. So this is an opportunity for you to ask your questions of asset management, related to asset management of myself and Ross Waugh who’s joining us today from New Zealand. So it’s quite early where Ross is.
We’ve done some of these before and it’s a good opportunity for you to bring up what’s on your mind regarding asset management. Things that you might have questions about or troubles with or suggestions for.
So while we’re getting started here, you’ve got a chance to type in questions and then hopefully we will be able to spend most of the time answering your questions. But I have asked Ross to actually talk about a topic that he’s done a lot about and he’s done a lot of presentations on. And I think it’s a really pertinent that as I go around the country training an asset management, it comes up a lot.
And that’s the idea of simplifying asset management. Sometimes they kind of get, we get too complicated with it and we could simplify it and maybe have a better time achieving the results that we would like with asset management.
So I’m going to turn over to Ross for a few minutes to talk to you about Simplifying Asset Management. And so again, as we’re speaking, please take the time to type in any of your question about asset management so that after we’ve talked about simplifying asset management for a while, we can actually get to your questions.
So Ross, I turn to the next slide here. Maybe you can talk us through some of these simplifying asset management.
Simplifying Asset Management
Thank you for that Heather. And good morning from Friday morning here in New Zealand. It’s early spring here in New Zealand and just a beautiful day. So I could tell you, if you’re wondering what Friday is going to be like, it’s only in America, on Thursday, Friday looks like a really really nice day.
So anyway, coming back to simplifying asset management. Early this year, I have the opportunity to present in June at a major conference that was an international conference of participants from about 30 countries here in New Zealand in the asset management stream.
And one of the other things I’ve been observing over the last maybe 18 months to a year, has been that we’ve got a lot of manuals and books and guidance now on how to do asset management. There is a fairly large stock of information. There is now, the International Standard, ISO 55000 as well.
And I know in the US, you’ve got, AASHTO put out quite a large 300-page book. And there’s various guidance out of American Water Works Association. And all sorts of things like that and then that’s just the general asset management guidance and then there’s quite a lot specific guidance around materials and life of materials and measuring those sorts of things.
Has asset management practice been made too complex?
And it’s starting to get quite complex and layers and one of the, particularly for smaller systems but even for some of the larger systems, my observation was that maybe we’re making it too complex and all that complexity and all of those manuals and standards. People are losing sight of what asset management is about and the big picture.
And just here in New Zealand, we have a three yearly cycle of asset management updating that aligns through our political cycle. You have a four yearly cycle in the US.
And again, the regulators have come back, having looked at all these plans that have been updated and said yet again, hey you asset managers, you’ve done very very well talking about the technical detail but for the community, the governance, the council, or the board of directors or whoever it is, how are they going to tell the story that you are trying to tell.
Because you’ve got all this technical detail but you really haven’t told the story of what you’re, maybe two or three key issues are that you need the funding for.
And in New Zealand now, we are now required or mandated to produce 30-year look forwards for asset management, which is a long way forwards. And those add up to billions and billions of dollars or on some cases in the US for the big authorities, that would be trillions of dollars.
Asset management is more than a black box
And the thing is that, when you go back to Congress or you go back to state legislature or to your own directors or whatever, and you’re asking for billions of dollars of funds, it needs to be more than a black box.
And it needs to be, as they’re looking at the slide there, “Trust me I know what I am doing” just is not accepted by the society particularly when we’re asking for billions of dollars from public funds.
And so part of the thinking around simplifying asset management was, well we need to get out of this black box mode and we need to get out of highly complex calculations unless we particularly need to do them. And get back to thinking about the components of asset management and thinking about how we explain that simply to people who aren’t technical professionals.
Because typically, the people that are voting the funds aren’t the technical professionals, they’re politicians, they’re people that have come from other backgrounds. They said they might have – we hope they’ve got some proficiency in some profession but not necessarily in engineering or asset management.