Strong growth in use of asset management practices expected in water sector

NEW YORK — Strong growth in the use of asset management practices within the water industry by current practitioners and non-practitioners alike is expected over the next five years, according the findings of a newly released study. The study, “Water Infrastructure Asset Management: Adopting Best Practices to Enable Better Investments,” was developed by McGraw-Hill Construction in partnership with CH2M HILL.

The study shows that over 80 percent of current practitioners expect to be using eight out of the 14 asset management practices identified in the study by 2017. The greatest area of growth is for the development of an asset management policy, with growth expected in use among practitioners from 46 percent to 84 percent and growth among non-practitioners from 5 percent to 59 percent, signaling a clear commitment to the adoption of asset management practices across the industry.

The benefits being experienced by asset management practitioners have helped encourage this adoption. The study shows that 80 percent report an improved ability to explain and defend their budgets and investments and 67 percent have a better focus on priorities. In addition, a higher percentage of utilities engaged in 10 or more asset management practices report achieving the benefits measured in the report.

“The more committed an organization is to an advanced asset management practice, the greater the results they are able to see in their organization,” said Harvey Bernstein, McGraw-Hill Construction’s vice president of Industry Insights & Alliances. “With 43 percent of the practitioners currently only using four to six out of the 14 practices featured in the study, there is a clear opportunity for utilities to reap more benefits in the future.”

The use of an asset management approach has a strong, positive impact on how utilities make decisions on their asset investments, according to the study. It shows that 84 percent of practitioners consider risk assessment an important element in their decisions about investments in new or existing assets, compared to 58 percent of non-practitioners. It further shows that 59 percent of practitioners are looking more than 10 years out in their asset strategy planning, compared to 33 percent of non-practitioners.

When asked the single biggest driver of wider use of asset management by water utilities, 39 percent of respondents indicate significant needs in the industry to replace, upgrade, or expand existing infrastructure; 25 percent regard the need to determine capital investment and maintenance strategies and budgets as most important.

“A lot of people think of asset management as being about the infrastructure itself. While the focus starts there, it is much more holistic than that,” said Scott Haskins, CH2M HILL director, management and strategic consulting. “It really is a way of doing business. It involves organizational, operational, and decision-making changes.”

In addition to helping utilities focus on priorities, asset management practices increase the ability to explain and defend budget and investment proposals to governing bodies, and help leadership better understand the risk and consequence of alternative investments, Haskins notes.

The study provides a unique approach for measuring asset management adoption by defining asset management practitioners by the activities they are currently using rather than by their own assessment of their practice. Based on this approach, 65 percent of the survey respondents are asset management practitioners (those doing four or more asset management practices out of the 14 practices provided in the survey.)

The 2013 Water Infrastructure Asset Management study was completed in conjunction with five industry associations that reviewed the survey and distributed it to their members: American Public Works Association, American Water Works Association, National Association of Clean Water Agencies, National Association of Water Companies, and Water Environment Federation. The study included 451 respondents from the U.S. and Canada, from utilities ranging from those serving a minimum population of 3,300 to a population of over 500,000.

For the full report, visit https://analyticsstore.construction.com/index.php/water-infrastructure-asset-management-smartmarket-report.html.