Part 6: Things that look good but do not add value

Asset management for public entities: Learning from local government examples.

In our audits, we saw a range of things that initially looked good, but on further investigation turned out not to add value. We highlight a number of them here so that you can avoid these pitfalls and the resources they consume.

Incomplete templates

There are a lot of templates for asset management plans available in the market. Some are generic blanks for asset managers to complete themselves. In other cases, consultants will tailor the template to an organisation and write some or all of the plan (using the client organisation’s information). However, there is no one right size or structure for an asset management plan. What is important is that the finalised plan is an appropriate length to include everything it needs to meet legislative requirements and manage the assets effectively. Anything more than that is putting wasted effort into padding that might make a plan look weighty and impressive, but does not add value. Indeed, it can actually reduce value by making the plan less usable (and more intimidating to keep up to date).

Some of the best plans are relatively brief. The ones that looked good at first glance, but turned out not to be, typically used a good-looking comprehensive template but had left parts of it blank. If an organisation goes to the cost and effort of purchasing, commissioning, or developing a template, it should ensure that it is fit for purpose. Once it is, every section should be completed and kept up to date.

Generic content

Generic content that looks good but does not add value often finds its way into asset management plans. Typically, this happens when the template has a heading indicating that a (few) paragraph(s) should follow, but there is actually very little locally to write about. This is similar to the “flashy” template with blank sections problem.

Some aspects of planning that can suffer from low-value generic content that takes a lot of space to say very little about the particular place or assets covered by the plan are listed below.

Links to other strategic planning

Here, a lot of space can be taken up describing the theoretical links that should be made between various aspects of the organisation’s strategic and operational planning without saying anything specific about where the particular asset group fits in.


Many organisations are struggling to clearly describe their approach to sustainability or sustainable development. However, because good practice suggests that sustainability should be addressed in an asset management plan, many asset managers feel that they have to say something. This is reinforced for councils because the Local Government Act 2002 requires them to take a sustainable development approach. In the absence of anything specific to say about how the particular assets are managed in a sustainable way, many plans fill space with a general discussion of sustainability, general issues for the service area, or some general examples of what the council is doing in some "obvious" environmental areas, not necessarily directly related to the core assets in the plan. This might include content covering recycling facilities at sports centres, native planting in road medians, and so on.

Growth and demand

A lot of the content we see in the growth and demand sections of plans covers forecast changes in population. That is to be expected. Forecast population changes are readily available from Statistics New Zealand. However, population is only one factor affecting the assets, and it should not be over-emphasised. There will be a range of influences on the level of demand for services and the assets supporting them. These might include changing tastes (more soccer fields, fewer rugby pitches), lifestyles (more water used for washing boats and so on), expectations (footpaths where there were previously none), and household make up (more single-person households – each with connections to utilities). Some changes in population may have little or no effect on the assets (for example, roads with excess traffic capacity could cope with a large population increase with very little effect on the roading assets).

Optimising the "maintain or renew" decision

Many plans have graphs showing the performance or condition of assets declining over time, while the maintenance costs of those assets rise over the same period. Often they identify some theoretical point at which intervention puts the asset back to peak performance, never declining further than the point at which intervention is most costeffective. However, while this looks good in theory, it does not add value unless it is clear what it means for work on the particular group of assets covered by the plan.

Risk management

It is not always clear how risks are managed at asset level. A lengthy discussion of general approaches to risk management covering risk registers, analysing the likelihood and effect of risks and the various treatment options from acceptance of risks to management, mitigation, and avoidance can take up much space in a plan, particularly if illustrated with example tables and traffic-light coloured matrices. What would add more value is a simple identification of the top priority risks affecting the assets and what the organisation is doing about them.

Long plans

Generic content can lead to our next issue, the big, thick, weighty plan. It can initially look impressive but ultimately does not add value. There is no denying that asset management can be a highly technical subject that applies to complex networks of assets, and there is a lot of detail involved. However, that does not necessarily mean that a long plan is a good plan. Indeed, to be a plan at all, a document needs to be usable. Long plans are often not used in practice because they can be difficult to read. As noted earlier, they are also intimidating to keep up to date as each revision becomes a major exercise. This in turn makes them less useful as they become out of date.

Optimised decision-making that does not come up with the optimum solution

Optimised decision-making (ODM) is about making trade-offs between alternative courses of action. It provides a way of assessing which is the best or optimal decision to meet the objectives with the available resources.

Despite the International Infrastructure Management Manual stating that ODM is not solely an advanced asset management activity,7 many organisations regard it as such. It may look good to have an assessment model and call it optimised decision-making, but it will not maximise the value it adds unless it truly identifies the optimum solution. Models with limited value:

  • do not evaluate a range of options against each other;
  • do not consider non-asset solutions;
  • do not identify all or even a wide range of potential benefits, costs, and risks;
  • include far less rigour in some parts of the analysis than in other parts; and
  • do not consider priorities across different service areas.

7: National Asset Management Steering Group, Association of Local Government Engineering NZ Inc (2006) 3rd edition (Version 3.0), International Infrastructure Management Manual, National Asset Management Steering Group, Association of Local Government Engineering NZ Inc. (INGENIUM), page 3.77.