How to use strategic asset management to optimize an infrastructure windfall
- By Ashay Prabhu
- Jun 02, 2021
President Joe Biden recently announced his $2.3 trillion stimulus proposal centered on the nation’s most pressing infrastructure challenges. While the funding seems like a welcome infusion, many smaller governments may be unprepared to manage the windfall coming their way. As government agencies prepare to attract funding, they must consider how to spend funds for the long-term balancing of budgets, not just a two-year fix. How can they ensure fewer assets enter the failing “F” zones of their lifecycles in five, 10 or even 30 years?
Strategic asset management is a modeling methodology that can help governments optimize how they spend their infrastructure stimulus money, while ensuring future financial sustainability. By applying SAM, officials can create an agile view of assets, develop strategies to guide investments and analyze data to model scenarios for applying infrastructure funds in the most strategic way possible.
Create a future-focused, agile view of assets
Deciding where the stimulus money will have the biggest impact, not just now but in the future, requires an agile, future-focused approach. Previously, government officials determined the condition and lifecycle of assets manually even though tracking and managing budgets, service requirements and risks for billions of dollars in infrastructure is a complex task for even the most advanced jurisdictions. In fact, many still do this analysis on paper, which can only provide data on an asset’s current state.
Computerized maintenance management software (CMMS) systems provide a digital view into assets, including data on age, location and current condition. SAM takes this to next level, analyzing tens of thousands of competing assets through multiple lenses to predict what funds will be needed 30 years in the future. This future focus is critical, not only for an official’s own understanding but so municipalities can better communicate with taxpayers and constituents.
Visualization and modeling tools promote agile understanding, which will help officials better pose infrastructure questions and understand different scenarios. They can answer questions like: What will happen to our bridges if we increase or reduce the spend, or divert the funds in a different distribution of treatments? Could we spend our money differently between our high-priority and low-priority sidewalks to get a different level of service in 10 years’ time? A technology-driven approach to understand assets can help answer these scenarios.
Build a strategy to guide investments
Once assets are viewed through a future-forward lens, government officials’ next step is to devise a strategy for tackling systematic infrastructure challenges. This involves mapping the available resources and predicted infrastructure windfall across assets with varying degrees of deterioration.
A plan built using a SAM methodology can serve as the “true north” to determine the right answers by modelling and comparing choices. To develop this plan, officials should tap internal and external experts to evaluate systems through modelling and determine when in an asset’s lifecycle to intervene. This plan should also identify the different points where investments are appropriate as well as the cost of treatment and its impact on asset condition and portfolio maintenance.
This process, known as capital planning, places a strategic emphasis on balancing short- and long-term needs. Capital planning can predict the future health of all systems, model a variety of scenarios and visualize all available options. Perhaps the most important tool capital planning offers is cost-benefit analysis to support the overarching strategy and help all stakeholders understand the impact of investment scenarios on every asset they oversee.
Analyze the data for better decisions
In preparation for the federal stimulus, state and local agencies must make the best possible case to attract funding. Most likely already have the necessary data to secure funding and plan investments, but they may not be able to model that data into the future. This is essential to long-term planning.
Jurisdictions that see the future spend their money differently. Small governments at the state and local levels can draw on data from CMMS systems with SAM capabilities. More mature and larger governments can conduct more advanced modeling through enterprise SAM to forecast renewals, replacements and expenditures. Financial optimization models can determine the best combination of investments across the portfolio, while tactical modeling can determine the type, timing and level of investment.
No matter the maturity level, SAM will help organizations clearly model and clarify available options for investments and cost-effective results over the next 10 to 30 years. This helps communities move infrastructure into the 21st century -- not only solving short-term needs but planning for the future.
As this past year has shown, governments must prepare for the unexpected, whether that’s a natural disaster or unplanned budget expenditure. The incoming stimulus funding presents an opportunity to think differently about infrastructure. SAM helps governments unite behind a common purpose, allowing teams to focus on the outcomes that matter and prepare for community needs for years to come.