PERFORMANCE EVALUATION FRAMEWORK FOR IT/IS
BASED ASSET MANAGEMENT
Abrar Haider
School of Computer and Information science, University of South Australia,
Mawson Lakes, Adelaide, SA 5095, Australia
Andy Koronios
School of Computer and Information science, University of South Australia,
Mawson Lakes, Adelaide, SA 5095, Australia
Keywords: Asset Management, Asset Maintenance, Asset Lifecycle Management.
Abstract: Engineering assets managing businesses use a variety of information and communication technologies for
process efficiency, control, and management. Nevertheless, key to all these is the effective measurement of
the IT/IS utilisation for existing process such that the underperforming areas are highlighted, and corrective
actions are taken to achieve optimal use of IS/IT. There are a variety of performance measurement
mechanisms available that stimulate improvement efforts, in so doing helping businesses to translate
perceived business strategy into action. However, these approaches are mostly aimed at high level
evaluation of an organisation’s performance; whereas the stochastic nature and ever expanding scope of
asset management processes demands asset managers to have a comprehensive view of asset lifecycle and
the interacting business areas. This paper proposes an evaluation framework for IT/IS based asset
management in an engineering enterprise. The paper firstly seeks to present a critique of the asset
management paradigm. It then discusses available performance measurement mechanisms and develops a
case for the constituents of an effective asset management measurement framework that provides detailed
indicators for controls actions required to achieve optimal process efficiency through the use of IT/IS. The
paper, then, presents an integrated asset performance measurement framework that not only is derived from
business strategy, but informs strategy formulation through a closed loop learning encompassing entire asset
management lifecycle.
1 INTRODUCTION
Business and engineering disciplines are facing
continuous change, facilitated by factors such as
advancements in technology, deregulation, and
environmental concerns. Amidst these adjustments in
the operating environment, it has become imperative
for business to have some sort performance
measurement system in place to measure the growth
and progress of the business, so as to rationalize
investments and to measure if their existing
technological, process, and procedural initiatives
conform to business strategy. This has particular
relevance for the high risk and capital intensive
businesses, such as engineering enterprises (see for
example Liyanage and Kumar 2000). More than ever
these businesses are concerned about the usefulness
of the business infrastructure that they put in place to
produce products and services, and at its heart lies the
measurement of the effectiveness of their production
or manufacturing ‘assets’. This concern is not just
limited to the businesses operating and owning these
assets, but is also shared by the regulatory authorities
(such as, environmental protection agencies). Asset is
the physical component of a manufacturing,
production or service facility, which has value,
enables services to be provided, and has an economic
life of greater than twelve months (IIM 2003), such
as manufacturing plants, railway engines and
carriages, aircrafts, water pumps, and oil and gas rigs.
Accordingly, management of these assets represents a
set of disciplines, methods, procedures and tools to
optimise the whole life business impact of costs,
performance and risk exposures associated with the
availability, efficiency, quality, longevity and
regulatory/safety/environmental compliance of a
355
Haider A. and Koronios A. (2006).
PERFORMANCE EVALUATION FRAMEWORK FOR IT/IS BASED ASSET MANAGEMENT.
In Proceedings of the Eighth International Conference on Enterprise Information Systems - ISAS, pages 355-365
DOI: 10.5220/0002449503550365
Copyright
c
SciTePress
company’s assets (Woodhouse 2001). However,
trends like convergence of technologies is making
assets easier to operate on one hand, and on the other
are making their management versatile due to the
multifaceted maintenance demands of various
technologies used in the assets. Nonetheless,
traditionally manufacturing/production assets have
not been given requisite attention on the strategic
agenda of manufacturing or production businesses;
with more emphasis been given to factors like what to
produce and how much to produce. Consequently, the
available performance measurement systems either
tend to overlook assets altogether, or when they do
allow provisions for assets performance
measurement, it provides a unilateral view mainly
concerned with their throughput rather than providing
a multilateral view that covers their output as well as
the impact of their operation on other business areas
and their design, maintenance, and retirement and
reinvestment demands. Furthermore, classical
measurement systems generally have a financial
measurement orientation (Kaplan and Norton 1996;
Sveiby 1997), and do not give enough consideration
to other important factors like technological maturity,
skill base, and process efficiency.
This research paper investigates the role of
information technologies, particularly information
systems in enabling asset management processes. It
takes an asset lifecycle perspective and proposes a
performance measurement framework for asset
management, which assists engineering enterprises
to evaluate the effectiveness of their assets in
operation as well as the impact of their operation on
related business areas and overall business direction.
The paper suggests a seven perspectives framework,
which has IT/IS at its core, such that it ties asset
management processes together to create a chain of
value added perspectives that translate into business
competitiveness.
2 IT AND ASSET MANAGEMENT
The past decade has seen significant activity in
business enabling technologies, which among others
also spans manufacturing and production systems,
production philosophies, and processes. Impact of
these technologies has intensified competition,
mainly because technology provides businesses with
the opportunities of competing on even grounds,
regardless of their size. However, at the same time
technology has also facilitated a shift towards
continuous renewal of products and services at
regular intervals, which consequently is forcing
businesses to innovate and update their offerings with
added value and features regularly. This shortening of
product lifecycles and continuous updating of
products demands enhanced asset operation capacity,
which means assets also have to be upgraded
continuously. Nevertheless, if engineering enterprises
are to take optimum advantage of manufacturing
technologies, their implementation should also
consider the resources, structures and processes that
may be impacted by technology adoption. These four
areas are operational processes, operational
structures, information systems, and human
resources. Information systems, in particular, have
the most significant bearing factor on operational
performance. It is mainly due to the fact that
engineering enterprises mature technologically along
the continuum of standalone technologies to
integrated systems, and in so doing aid the maturity
of processes, skills, and business intelligence.
Information, however, is the fuel of this maturity
process and its magnitude and quality demand also
increases along the same scale of maturity.
Information technologies, which in themselves are an
important constituent of manufacturing technologies,
and information systems, hold the key to continuous
improvement and competitiveness of manufacturing
businesses (Lawrence 1999).
Koc and Lee (2003) summarise the changes in
manufacturing paradigm over the last two decades
and suggest that it is fast moving towards a wireless
environment, or an ‘e-intelligent’ environment
(Figure 1). The authors argue that the manufacturing
paradigm is fast moving towards an environment of
continuous and seamless flow of information, aimed
at real time access to all the stakeholders of a
business process to increase the overall business
efficiency, responsiveness, and agility. This,
however, means a shift that is not just outwardly
innovative, as in terms of product innovation, but is
also inwardly creative and aimed at process re-
engineering and innovation in asset design,
operation and support. Lee (2003) terms this shift as
the “5Ps,” namely predictability, producibility,
productivity, pollution prevention, and performance.
Focus of these 5Ps is on the effectiveness of assets
on the manufacturing floor in terms of continuous
availability, efficiency, and output, as well as on the
expectations of stakeholders in terms of compliance
with regulatory and environmental legislations. In
manufacturing and production environments that are
riddled with continuous change, stability in
manufacturing and quality processes has long been
advocated (see for example, Warnecke and Hueser
1994), as disruptions and disturbances in production
ICEIS 2006 - INFORMATION SYSTEMS ANALYSIS AND SPECIFICATION
356
1980 1990 2000
2010
Product Focus 3Cs (Chips, Computers,
Communications) &
Intelligent Mechatronics
Products that think
&
link
Products that Learn,
Grow, Reconfigure,
& Sustain
Manufacturing Focus Factory Automation
(Flexibility)
Business Automation
(Agility)
e-factory & e-
Automation
Innovation Microelectronics &
Computing
Embedded Intelligence
& Smart Netware
E-intelligence
Systems
Figure 1: Evolution in Product Innovation and Manufacturing Source (Koc and Lee 2003).
Table 1: Asset Lifecycle Management Perspective Source (Moubray 2003).
Functions
Description
1
Functional specifications
Decide what each asset must do to make the manufacturing processes value added
2
Design specifications
Decide the configuration of the asset in order to meet functional specifications
3
Acquisition & Deployment
Acquire and deploy the assets
4
Maintenance
Sustain and where necessary replenish the assets in such a way that they continue to
make the required contribution to the value-adding process
5
Scorekeeping
Identify key performance indicators that show how well the assets are making their
required contribution to the value adding process
6
Disposal
Dispose off assets when they do not fulfil the required functions or are not needed
7
Compliance
Monitor and ensure compliance with regulations governing the use of the assets
or manufacturing have a devastating effect on
revenues as well as customer relationship (Almgren
1999). Engineering enterprises, therefore, need to
take stock of the effectiveness of their assets and
manufacturing process, such that it highlights the
underperforming areas and provides them with a
roadmap for implementation of information systems
in ways that complement business strategy. This
scorekeeping, however, requires a comprehensive
approach that takes a holistic view of the way asset
are operated; their lifecycle demands are addressed
and resources are allocated to keep them in running
condition; their lifecycle decisions are made; and
information is collected, processed, and
communicated within the organisation and with the
business partners.
3 IT AND ASSET MANAGEMENT
Asset management entails design and
commissioning of assets, operation and
simultaneous addressing of maintenance needs
arising from the operations of assets, and consequent
decision support for asset renewal or
decommissioning. Table 1 below further breaks
down these stages and presents a description of the
activities associated with each stage of an asset
lifecycle management.
Increased business automation along with the
continuously changing operating conditions makes
asset management increasingly intricate and
multifarious as it increases their vulnerability by
exposing them to disruptions and interruptions of
various kinds. For example, a typical water pump
station in Australia is located away from major
infrastructure and has considerable length of pipe
line that brings water from the source to the
destination. In this situation, assets are deployed
over an area of various kilometres; however, the
demand for water supply is continuous for twenty
four hours a day, seven days a week. Although, the
station may have some kind of a early warning or
process control and condition monitoring system
installed, such as Supervisory Control and Data
Acquisition (SCADA), maintenance labour at the
water stations and along the pipeline is generally
limited and spares inventory is generally not held at
each station. Therefore, it is imperative to
continuously monitor asset operation (which in this
case constitutes equipment on the water station as
well as the pipeline) in order to sense asset failures
as soon as possible and preferably in their
development stage. However, early fault detection is
not of much use if it is not backed up with the ready
availability of spares and maintenance expertise.
Therefore, the expectations placed on water station
by its stakeholders are not just of continuous
availability of operational assets, but also of the
efficiency and reliability of support processes.
Elimination and control of production irregularities
and disturbances is, therefore, necessary for
production and service provision, agile
manufacturing, and customer satisfaction. However,
PERFORMANCE EVALUATION FRAMEWORK FOR IT/IS BASED ASSET MANAGEMENT
357
as businesses are beginning to recognise the
importance of these turbulences, weaknesses of
traditional approaches to asset equipment are
coming to forefront (Lawrence 1999).
Bamber et al (1999) posit that traditionally asset
management processes, such as maintenance have
been considered as support functions, and are termed
as non-productive and a non core processes that add
little value to the business. This is largely due to lack
of acknowledgement of the direct connection
between maintenance and profitability (Jonsson
1999). Most organisations adopt a traditional
technology-centred approach to design and
implementation of new assets, where technical
aspects command most resources and are considered
first in the planning and design stage. Human and
organisational factors are only considered relatively
late in the process, and sometimes only after the
system is operational (Konradt et al 1998). Al-Najjar
(1996) suggests that most businesses do not have a
significant control of costs incurred by planned or
unplanned stoppages and quality problems. Generally
tactical and operational decision made by managers
have a short term focus, for example, asset
procurement decisions are based on acquisition cost
only and maintenance requirements are totally
ignored, whereas, a significant amount of the annual
operational costs are attributed to maintenance costs.
Consequently engineering enterprises struggle to,
utilise their assets effectively and profile its lifecycle
demands; implement cost effective maintenance
strategies that best suit the business; develop lifecycle
management competencies; plan an effective exit
strategy for assets rendered obsolete through
technology refresh or through end of need; and
provide a credible charge-back system to allocate
maintenance costs to the business lines and thus
ensure that everyone is involved in avoiding
redundancy and wastage of efforts (Haider and
Koronios 2005). This highlights the need for a
comprehensive performance measurement system
that not only provides insights into the effectiveness
of the asset operation, but also quantifies impact of its
operation on other business areas so as to provide a
lifecycle perspective of asset utilisation to asset
managers. Such a performance measurement system
entails that performance measurement should have a
multifaceted but integrated focus. It should include
all the facets of an asset lifecycle as well as critical
factors such as, technology, process efficiency, risk
assessment, competencies, and organisational
learning; and how these factors contribute to overall
business strategy.
4 PERFORMANCE AUDIT
There have been numerous business improvement
methodologies developed and implemented by
businesses of all sorts. These methodologies
represent a blend theory and practice, which each
having its own way of performance measurement
that is largely dependent upon the focus of the
methodology. Some of the leading initiatives in this
regard include organisational learning,
Benchmarking, total quality management, learning
organisation, Six Sigma, European Foundation for
Quality Management Business Excellence Model
(EFQM), business process re-engineering,
knowledge management, and balanced scorecard.
These methodologies constitute the basis of the most
of performance measurement and management
initiatives tailored by businesses to meet their needs.
Consequently, engineering enterprises have adopted
these methodologies in a variety of ways and aimed
at different business areas and processes, such as for
manufacturing planning and control (Kochhar et al.
1996), product development process (O'Donnel and
Duffy, 2002), human resources development (Kelly
and Gennard 2001; Gibb 2002) service or facility
management (Wilson 2000).
Businesses have particularly been interested in
measuring the performance of their information
systems, in order to rationalise investment and to find
triggers for further improvement. An interesting
aspect of these methodologies is the fact that they are
either high level performance measurements or are
aiming at the functional level. Remenyi et al (2000)
summarise the methodologies developed for
assessing the performance of Information systems,
and suggest that their focus has been on strategic
match analysis and evaluation; value chain
assessment (organisation and industry); relative
competitive performance; proportion of management
vision achieved; work-study assessment; economic
assessment - I/O analysis; financial cost benefit
analysis; user attitudes; user utility assessment; value
added analysis; return on management, and multi-
objective, multi-criteria methods.
Although research has paved the way for major
developments in the filed of business improvement,
yet it is interesting to note that asset performance
measurement has been largely limited to physical
inspection of plant and equipment for its health
assessment. However, existing research provides the
essential stepping stones for further research into
performance measurement for asset management.
From the discussion so far seven characterises of a
performance measurement mechanism are formulated
ICEIS 2006 - INFORMATION SYSTEMS ANALYSIS AND SPECIFICATION
358
and are validated by the research on performance
measurement systems. These characteristics entail
that an appropriate performance measurement system
for asset management should:
a. Focus on business processes as well as the
structures that deliver value (Neely and Adams,
2001);
b. Integrate different aspects of asset management,
such that they constitute a chain for business
competitiveness (Suwignjo et al. 2000; Neely et
al. 1996);
c. balance the needs of various stakeholders, such
as business partners or third party service
providers, customers, employees, regulatory
agencies, and society at large (Kaplan and
Norton 1996; Neely and Adams 2001);
d. information driven such that it provides inputs
to strategy re-calibration rather than being
steered by the business strategy (Bititci 2000;
Bititci et al 2005; Neely and Adams 2001);
e. Conform to business objectives (Kaplan and
Norton 2000; Bititci 2000);
f. Aim at competency development and business
intelligence infrastructure development to create
and sustain value for asset management
processes (Kaplan and Norton 2000; Neely and
Adams 2001); and
g. Provide financial (Kaplan and Norton 2000) as
well as non financial assessments (Neely and
Adams 2001).
5 IS/IT BASED ASSET
MANAGEMENT EVALUATION
From the discussion above, two characteristics stand
out. First, there has to be a strategic fit between the
structure of asset management processes and the
supporting infrastructure, and second, the technology
should provide for the functional integration between
various asset management processes. Table 2, below,
provides the theoretical underpinnings for a seven
perspectives framework that were identified from the
literature review. IT/IS are seen here as the focal
point around which asset management and support
processes are organised. It provides two fundamental
purposes, first it provides the strategic fit between
business structure and infrastructure, and second it
provides for the functional integration. This way,
IT/IS facilitate a closed loop asset lifecycle
management framework (see figure 2).
Table 2: Asset Management Performance Measurement Perspectives.
Perspective Description References
Design and Planning Planning, design, and improvements of assets
and manufacturing processes according to
stakeholders’ expectations and products and
services demand.
Feigenbaum (1991); Flynn et al. (1994);
Yamashina (2000); Zhang et al. (2000); IIM
(2002); Jonsson and Mattsson (2003); Raouf
(2004); Fernando and de Carvalho (2005);
Productivity Ensuring smooth asset performance, including
mitigation of risks posed to assets; their
operating environment
Suzuki (1994); Bever (2000), Woodhouse
(2001), IIM (2002); Raouf (2004); Mathew
(2004); Seth and Tripathi (2005)
Support Financial and non financial resources support
for asset lifecycle support including
maintenance management, spare supply chain
management, and related processes.
Blanchard (1997); Yamashina (2000); Raouf
(2004); IIM (2002); Moubray (2000);
Moubray (2003); Zutshi and Sohal (2005);
Oke (2005)
Stakeholders Ensuring stakeholders collaboration and
integration to achieve higher levels of asset
management through enhanced work design,
process efficiency, and compliance to
regulatory and environmental regulations.
Crosby (1979); Liyanage and Kumar (2000);
Tsang and Chan; (2000); Santos (2000);
Raouf (2004); Zutshi and Sohal (2005); Bititci
et al (2005); Seth and Tripathi (2005)
Organisational
Learning
Profiling asset management and managing
lifecycle knowledge for better understanding
of improvements in asset design, operation,
maintenance, reinvestment, and compliance.
Ramamurthy (1995); Hipkin (2001); IIM
(2002); Marquez et al (2004); Johansen and
Riis (2005)
Competitiveness Strategic directions to strengthen business
performance and competitive position with
effective asset management.
Yamashina (2000); Dangayach and
Deshmukh (2001); Rudberg (2002); IIM
(2002); Schroeder et al (1995); Raouf (2004);
Zutshi and Sohal (2005)
Information
Systems/Information
Technology
Appropriateness of information systems/
information technology to provide value
added support to asset management
Al-Najjar (1996); Blanchard (1997); Bever
(2000); Moubray (2000);Duffuaa et al (2001);
Cassady et al (2001); IIM 2002); Mathew
(2004); Fernando and de Carvalho (2005)
PERFORMANCE EVALUATION FRAMEWORK FOR IT/IS BASED ASSET MANAGEMENT
359
Each perspective and the rationale behind it are
explained below, along with their impact on other
perspectives.
Competitiveness Perspective
In engineering enterprises strategy is often built
around two principles competitive concerns and
decision concerns. Competitive concerns set the gaols
of manufacturing, whereas decision concerns deal
with the way these goals are to be met (Rudberg
2002). This perspective deals with both these
principles. As shown in figure 2, this perceptive
provides strategic underpinnings to asset management
in anti-clock direction thereby setting gaols, and as
the end point of the anti-clock cycle gets feedback
from the asset management processes for better
decision support and asset lifecycle management.
These decisions entail the choice of assets, their
demand management, and business arrangements to
ensure smooth manufacturing or service provision.
Business arrangement illustrates the optimum ways
of doing business, such as the choice of business
partners, outsourcing of asset management functions,
capacity scheduling, and service provision to third
parties (Dangayach and Deshmukh 2001).
Design Perspective
A usual manufacturing cycle starts with specification
of the products and services that the business aspires
to offer its customers in conformance with its
business strategy. This specification illustrates the
types of assets and processes that the business needs
to put in place to produce services and products. It is
also known as the demands specification of assets.
This is of vital importance in a manufacturing cycle
as well as in the asset management lifecycle. It is,
therefore, critical to have an integrated understanding
of factors such as, the characteristics of the
environment that the business operates in; design,
configuration management, and workload of each
asset; maintenance demands of each asset;
availability of asset maintenance support; and the
business process that enable manufacturing as well as
asset management. Any mismatch between what the
market demands, manufacturing process design, and
planning has a detrimental effect on the overall
performance of the business (Schroeder et al 1995).
For example, consider two different types of assets,
one operates on fixed number of hours over a period
of time, and the other operates on as needed basis that
can be many times over the same time. In order to
keep both these assets in running condition, both
assets have some maintenance demands that entail to
have a stock of spares. Usually there are two methods
used in businesses, re-order point and material
requirements planning, where both deal with how
much and when to place an order for a specific item.
However, re-order point requires an even demand
that suits assets that operate in stable conditions,
whereas material requirements planning better suits
complex and demand dependent environments with
erratic demand. Similar differences can be identified
for capacity planning and other manufacturing floor
control methods (see for example, Vollmann et al
1997). Planning choices at this stage drives asset
behaviour, therefore it is important to assess if right
choices have been made to ensure availability.
Furthermore, this assessment also explains variations
in output levels, and possible causes of
manufacturing, production, or service provision
disturbances.
Productivity Perspective
Productivity of an asset is directly related to the
minimising of production or service provision
disturbances. A production or service provision
disturbance is an unplanned or undesirable function
or failure of an asset (Kuivanen, 1996). It can be
classified as asset downtime, speed or operation, and
quality losses. It is important to note that disturbances
do not only occur due to a mechanical or electrical
fault, they can also occur due to some process and
procedural issues. Disturbances occur in one of the
three ways, as suggested by El-Haram (1995):
a. When an asset become inoperable suddenly, and
can no longer perform its required operations;
b. When an asset cannot fulfil some or all of its
operations at the same performance standard as
originally specified; or
c. When an asset gradually deteriorates to an
unsatisfactory level of performance or
condition, and its continued operation is unsafe,
uneconomical or aesthetically unacceptable.
Businesses use different methods to assess the
reliability of their assets operation, just like there are
many ways that can impact asset productivity and
case disturbances. According to one study, more than
one third of the production disturbances were caused
by design errors (Jarvinen et. al. 1996). In complex
manufacturing environments where there is range of
assets employed, production or service disturbances
in one asset can cause detrimental issues for other
assets. For example, due to a mechanical fault the
output of an asset is feeding substandard input to the
next asset, idleness of an asset as it runs out of raw
material, or hazard to other assets due to total asset
failure such as nuclear radiations, and fire. Here,
productivity assessment of an asset entails deviating
ICEIS 2006 - INFORMATION SYSTEMS ANALYSIS AND SPECIFICATION
360
away the convention practice of just condition
monitoring of an asset and process control through
the use of sensors and process control systems. Its
scope is extended to include operational requirements
compliance, asset operation in the planned
environment, as well as the mechanical behaviour of
the asset. Matson and McFarlane (1999) propose the
concept of production responsiveness with refers to
achieving goals of asset operation in wake of
supplier, internal and customer disturbances.
Therefore, support processes like asset maintenance
need to take a holistic approach by taking care
resource availability for myriad of factors that cause
production or service provision disturbances.
Support Perspective
Operational support for assets means failure detection
as well as support for maintenance execution. This
support is not just limited to availability of resources,
such as spares, equipment, and human resources, but
it also includes factors such as employee training and
skills development. Failure root cause detection is
itself is a daunting task, as explained earlier a failure
condition can have its foundations in different
process, procedural, and mechanical reasons.
Maintenance approaches differ form industry to
industry, depending upon the type of assets that the
business utilises. However, there are three major
approaches to maintenance (Niebel 1996):
a. Failure-driven maintenance;
b. Time-based maintenance;
c. Condition-based maintenance.
Though the crux of maintenance approaches is the
same as the ones described above, however different
industries utilise different techniques to select the
cost effective strategies that best suit their operations
and nature of assets. In this quest oil, defence and
aviation industries have been the forerunners, as they
have introduced strategies such as reliability centred
maintenance (RCM), failure modes and effects
analysis (FMEA), availability, reliability and
maintainability analysis (ARM), level of repair
analysis (LORA), and whole life costing (WLC)
(Blanchard et al. 1995). These approaches fall under
the umbrella of integrated logistics support (ILS) that
deals with the delivering outputs at an affordable cost
throughout a project life cycle (Jones 1995). ILS is an
engineering and management tool, which ensures that
the project economically meets performance
requirements such as reliability, durability, quality,
maintainability, and availability throughout its life
cycle (Green 1991).
Maintenance, however, influences many areas of the
business, such as asset availability in supporting just
in time principles (Nakajima 1988), relationship
between technology and operations (Willmott 1997),
product quality (Moubray 2000), and achieving and
sustaining a safe workplace and environment (Zutshi
and Sohal (2005). This perspective is the most
powerful perspective of asset lifecycle management,
as it not only assesses risks posed due to asset
operation, but also quantifies these risks by providing
indications on spending for asset lifecycle support.
These assessments also provide lifecycle support
decision support, such as tradeoffs between asset
maintenance and renewal, changes to asset design,
level of employee expertise in operating assets.
Strategic Control
Operational Control
Management Control
How well do the
existing ICTs aid in
production design
and planning?
Design and Configuration
Management
How well do the existing ICTs
manage financial and non financial
resources to provide Asset Life
Cycle Support?
Integrated Resource
Management
Capacity Scheduling
and Asset Demand
Management
Disturbance Management
Asset Health Management
Support
Training and Awareness
Operational Risk
Management
Operational Quality
Management
Competencies Development
Organisational
Responsiveness
Asset Workload
Definition
How well do the existing
ICTs ensure optimum asset
operation?
Asset Health
Monitoring and .
Process Control .
.
Business Value Chain
Integration
How well do the existing ICTs enhance
profitability and competitiveness of
Asset Managing Businesses?
Asset Need and
Requirements
. .
Definition
.
How well do the existing ICTs
integrate stakeholders in Asset
Management processes?
Collaboration and
.
Communication
How well do the
existing ICTs
manage Asset
Management
Knowledge and
learnings?
Business Intelligence
Management
Knowledge Sharing
Support
Innovation and Changes in Asset Design;
Lifecycle Processes; products; work design;
and Services
Information System s/
Information Technology
Perspective
Measures
Goals
Design Perspective
Measures
Goals
Competitiveness
Perspective
Measures
Goals
Support
Perspective
Measures
Goals
Productivity
Perspective
Measures
Goals
Stakeholders
Perspective
MeasuresGoals
Learning
Perspective
Measures
Goals
Figure 2: IS/IT based Asset Management Evaluation Framework.
PERFORMANCE EVALUATION FRAMEWORK FOR IT/IS BASED ASSET MANAGEMENT
361
Stakeholders Perspective
Asset performance, among other factors discussed
above, also depends on the skills and expertise of
asset operators and knowledge of asset operation,
asset failure trends, and procedures (Ramamurthy
1995). A common tend among engineering
enterprises is the outsourcing of core activities such
as maintenance. This trend is quite common among
for complex assets, such as aircrafts, and oil and gas
rigs. In these circumstances neither the asset owning
business, and nor the asset maintaining business has a
complete understanding of asset behaviour, which
obviously impacts asset lifecycle decision support.
This perspective assesses the level of integration
between the business stakeholders, such as
employees, business partners, customers, and
regulatory agencies like environmental and
government organisations. The idea here is to share
knowledge in order to enhance the efficiency and
competencies of the overall business, which
subsequently provide quality of operations.
Learning Perspective
Contemporary engineering enterprises take an
adaptive learning view. Senge (1990) argues that, for
continuous improvement adaptive learning generative
learning (Argyris 1977) as opposed to adaptive
learning should be adopted. Adaptive learning has a
short term focus and aims at solving the immediate
problems faced by the business; whereas generative
learning has a long term focus and instead of looking
at immediate issues it looks at long terms strategic
issues. Here, the learning perspective illustrates
assessing the way engineering business preserve the
knowledge that it creates in previous perspectives,
and using the same for providing triggers for change
to recalibrate its competitive strategy in terms asset
lifecycle management. These triggers are aimed at
changing asset design, processes, and business
architecture and infrastructure, whereby the objective
is to induce flexibility in over all business execution
and creativity in the processes of asset lifecycle
management.
Appendix 1 provides the details of the asset
management processes that should be assessed under
each perspective. It examines the purpose of each
process, i.e. primary or secondary, and assigns it to
the appropriate dimension of asset performance
criteria of efficiency, effectiveness, availability,
compliance, and reliability as suggested by
Woodhouse (2001) and IIM (2002). Information
systems consist of hardware components, software
applications, communications networks and facilities,
and information that is captured, exchanged,
processed, and stored to enable business operations.
Therefore, in order to assess the effectiveness of
IS/IT for each process four dimensions, namely,
people, information, applications, and technology are
selected, to be measured on a scale of 1 to 5. This
information could be collected though surveys and
with the help of Analytic Hierarchy Process (AHP)
(Saaty 1990) and Multi-Attribute Utility Theory
(MAUT) (Goicoechea et al. 1982) it could be
aggregated to provide performance measurements,
thereby providing an overall IT/IS performance
measurement for asset lifecycle management.
6 CONCLUSION
This research provides the basis for further research
into comparative analysis of IT/IS based asset
management for industrial and infrastructure assets
to be conducted through the Cooperative Research
Centre for Integrated Engineering Asset
Management (CIEAM). This paper has proposed
and theocratically demonstrated an approach for
linking asset management to strategic
competitiveness of a manufacturing business
through processes measurement and control. It has
particularly emphasised the use of IT/IS for
integration between competitive environment and
resource capabilities, competencies, and capabilities.
It has also shown how asset managing businesses
could benefit by taking a lifecycle perspective of
asset management, such that assets are treated as
business enablers rather than just production or
service provision enablers.
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APPENDIX 1
Processes Asset Performance
Criteria
IS/IT Resources
Efficiency
Effectiveness
Availability
Compliance
Reliability
Skills
Applications
Hardware
Information
Planning and Design Perspective
Asset Operation/Service Standards Definition
Asset Design and Configuration Management
Production Scheduling
Performance Perspective
Operational Requirements Compliance
Asset Performance Monitoring
Asset Condition Monitoring
Hazard Identification
Asset Depreciation and Deterioration Trending
Support Perspective
Asset Failure Prediction and Maintenance Planning
Asset Failure Root Cause Analysis
Asset Maintenance Workflow Execution
Asset Lifecycle Support Resources Management
Asset Lifecycle Budgeting and Cost Benefit Analysis
Operational Risk Assessment
Asset Treatment Options and Tradeoffs
Materials Management
Stakeholders Perspective
Third Party Services Management
Asset Operator Training and Education
Environmental and OH&S Compliance
Stakeholder Advise, Assistance, and Collaboration
Contract Management
Organisational Learning Perspective
Lifecycle Evaluation and Recommendations
Asset Lifecycle Cost Planning and Expenditure
Asset Lifecycle Knowledge Management
Asset Register Management
Project Management
Asset Performance Reporting
Competitiveness Perspective
Strategic Asset Management Planning
Strategic Business Audit
Business Partner Integration
Technology Perspective
Strategic IT/IS Planning
Information Acquisition, Integration and Storage
Technology Direction Assessment
Appropriateness of Technology to AM Processes
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