Getting the board on board for technology investment is always a challenge, but as Asset Management professionals know only too well, successful portfolio management needs the best tools. All the more so given increasing budget pressures and compliance requirements.
Domenic Fonte, CEO of Asset Future, and Simon Furness, Director of Property at Uniting, tackled this subject at AMPEAK23: "Expanding the sphere of influence at the Executive table".
In a very productive and interesting panel discussion, they emphasised the challenges of influencing executives in Asset Management, as well as the need to share a vision that considers risk, transparency, and efficiency.
Some of the key points raised included:
1. Asset management is value creation, not "Business As Usual":
Rather than just something that managers are just supposed to get on with, AM is actually a function that helps deliver organisational strategic objectives.
2. The importance of retaining the value of assets on your balance sheet:
Asset management is a long-term game, and short-sighted maintenance budget cuts result in a portfolio of degraded assets that are even more expensive (and risky) to run.
3. How to influence decision-making at the Executive table:
This is the most important of all because asset management is most effective when it’s prioritised by all stakeholders. To get executives on board, managers need to communicate the importance of asset management to business performance.
Uniting’s experience
Simon shared his insights into how Uniting turned their asset management into a business success driver. He explained that organisations should not solely focus on large capital investments and building completion, but also consider the ongoing costs of running and maintaining assets. Cutting costs and squeezing higher margins at the expense of a portfolio of poorly maintained assets is not an organisational win and can cascade into damaging reputational risks.
Additionally, failing to understand the functional flexibility of facilities can lead to an imbalance in building new facilities versus maintaining existing assets. Operating costs usually increase over the life of an asset, and upgrades may not reduce these costs, but they may increase the asset’s utility and compliance.
Domenic and Simon also discussed how Intelligence Reporting can help influence decision-making at the executive table. Their three top pieces of advice to asset managers are:
a. Use the same language as leadership teams
b. Highlight Cost, Reputation and Risk
c. Achieve alignment across the organisation
In conclusion, it’s clear that asset management needs a seat at the executive table. Taking a holistic and long-term approach to asset management and maintenance directly contributes to strategic business objectives. Effective AM not only saves costs and reduces risk, helping with compliance, but it can extend the useful life of assets and add strength to the balance sheet. It’s a valuable function and not just "Business as Usual".
To effectively communicate the significance of Asset Management, it needs to be linked to key organisational goals. To articulate the benefits, Asset Management Leaders should use data to show how strategic asset management aligns with broader business objectives, and emphasise the long-term outlook needed.
At AssetFuture, we can assess your organisation’s asset management maturity and demonstrate how having the right technology will help meet those broader business goals, so feel free to get in touch with our team of experts.