Ever-increasing regulation and compliance requirements often seem like a headache for asset managers. Already drowning in admin, with limited budgets, it feels like one burden too many.
But there’s another way to look at it. Having a robust regulatory framework can enable better management and higher safety, and create a much more organised structure for asset portfolios and their maintenance.
As KPMG observes in its 2022 Emerging Trends in Infrastructure report that "well thought-through regulatory systems can be one of the most powerful drivers of infrastructure innovation and development". KPMG gives the example of how the UK has used regulation to help incubate the market for renewables, particularly offshore wind, "driving a dramatic increase in the proportion of low carbon energy generation in just a few years".
Proper regulation protects everyone, leading to better quality assets with optimised lifecycle value, with cost efficiencies gained in maintenance, insurance and legal costs. For example, the goal of NSW’s Asset Management Policy for the public sector aims to "realise value" from planned and existing assets.
It’s not to create layers of red tape for the sake of it, but has a clear goal of improving the way assets are managed and ensuring best practice.
Driving value through better governance
Over the coming year, KPMG expects to see conventions related to regulation and control start to shift "as regulators, governments and investors begin to take rapidly changing technologies into account and start focusing on creating governance for the sake of benefits, not just for the sake of governance".
We’re starting to see this in Australia in sectors such as healthcare and aged care. New South Wales has already brought in mandatory requirements for the management of government assets, and other states are moving towards doing so. In many cases there is a specific goal of taking a "whole-of-life" approach which benefits all stakeholders. Given the billions of public funds poured into infrastructure, there should be a requirement to maximise this investment.
Having a Strategic Asset Management plan also enables much better financial planning. Asset Managers can make informed investment decisions based on whole-of-life costs of the assets, and be able to meet required service levels and regulatory obligations.
Technology to improve compliance
While becoming compliant can seem like an uphill task, technology is there to help. Managing compliance with a purpose-built asset management platform is much easier. For starters, it can handle existing regulations around data protection and privacy. Asset information is stored securely, and is easy to access and generate actionable insights from.
With a platform like AssetFuture, the compliance side is continually updated and taken care of for you. As a cloud-based platform, your data is also held securely and in compliance with data protection laws. Collecting and storing the required information is much easier, with libraries of existing asset data to help fill gaps.
For example, we worked with TAFE NSW who wanted to go beyond the bare minimum for compliance, and keep their assets at the top end of condition. Through AssetFuture, TAFE NSW not only ensured compliance but were able to align Asset Management strategy with corporate strategy, and create an evidence-based approach to funding requests.
In future, regulators will promote governance not just to manage costs and risks, but to ensure that projects are properly scoped and address society’s need. Doing best practice helps align strategy with operational activities, delivering clear cost, risk and performance benefits. Having comprehensive, accurate and up-to-data information on assets makes the compliance process much easier.