At the end of the process described above, you should have 4 different perspectives on renewal planning. They may be consistent with each other, or there may be apparent differences. You now need to present an overall renewal plan or accept that there are differences that require further investigation.
In a perfect world, the following would be apparent :
- A GIS view of the network indicates that the AMIS information covers all services properties, and there are no apparent gaps or duplications.
- The divisions between types of assets and their ownership are clear and make sense.
- Where observed/tested condition information is available, this is used to use default predicted life expectancy.
- There is a long term prediction for renewal of non-critical and critical assets that is consistent with what is known about the development of the network over the years and uses life predictions consistent with industry expectations.
- There are no spikes that seem to be generated by the use of somewhat arbitrary installation dates to populate the initial AMIS.
- Assets with elevated criticality have been identified, and specific plans have been generated to monitor their condition and plan for their renewal on the basis that reflects their risk to the provider’s service objectives.
- The extent of any backlog that is indicated aligns with the actual performance of the network, and the extent of renewal works in recent years. If a large backlog is indicated, then you would expect to see numerous asset failures and a relatively minor renewal response to this in recent years. Conversely, if a minimal backlog, or even none, is indicated, you would expect to see very few asset failures occurring and/or there have been extensive renewals undertaken in recent years. A useful gauge for this situation is to ask the Operations Manager what they would do with $1M of renewal funding. If their response is ‘Is that all – that barely scratches the surface’, this will indicate that a significant backlog may be real. Conversely, if their response is ‘Not sure where I would spend that’, then maybe there is no backlog of consequence.
- The extent of renewal required in the short term is consistent with what has been delivered in recent years.
- The extent of renewals required in the longer term can be accommodated within the financial planning for the provider, albeit with smoothing applied and would require tariffs and charges that are considered acceptable to customers.
The reality is likely to be quite different to the above. Resolving the differences between the 4 quadrant views will require challenging the assumptions used and maybe some of the industry-accepted ‘standards’. Your assets may be behaving quite differently from what was expected.
There may not be a set of information and assumptions that aligns the different views. This would indicate the need to further investigate the network to obtain more and better information. Discussion between the financial and asset management arms of the organisation to understand the nature of the uncertainty and how this impacts planning, and the sustainable viability of the provider would also be appropriate.
Two key things to remember as you assemble the information :
- There is inevitably much uncertainty in the forecasts.
- A spreadsheet and its calculations, tables, and graphs simply reflect the data and assumptions put into it. It does not make it true!