5 reasons to revisit asset management
Asset management underpins the profitability of property development and construction companies — it's critical, but not simple to manage.
Leaders in these industries have always dealt with complexity but meeting expectations for reliable service quality in a post COVID-19 and rapidly changing operating environment will require smarter, more strategic decisions.
Here’s five factors driving the need for more robust ways to predict and manage asset performance in 2021:
1 - Variability and risk will probably get worse
Climate change means assets are increasingly being affected by unpredictable and extreme conditions and are being placed at a heightened risk.
Areas that were once considered to be effectively risk free of flooding, like Idalia in North Queensland, incurred damages totalling over $887 million during the 2019 monsoon. Coastal erosion around Australia has placed an estimated $88 billion worth of properties at risk. And the 2020 bush fires that many claim were a direct result of climate change have cost Australians over $100 billion in damages and loss.
Other variabilities and risks include changes to building and development laws. In response to a greater need for environmentally sound and sustainable building practices, all new buildings must now comply with the National Construction Code for energy efficiency in their state.
New homes and renovations must include energy efficiency and water efficiency features aimed at helping the home owner save money, and reducing the demand on natural resources. As an even greater focus is placed on the sustainable building practices, councils and government agencies will continue to apply greater restrictions that require clear reporting of assets used on new constructions.
2 - Public scrutiny will only increase
Asset management attracts public and media attention and it’s only getting more frantic given the 24-hour news cycle and reach of social media.
Poorly maintained worksites, equipment and fleet vehicles can lead to breakdowns or accidents and you can be certain that someone will almost certainly be close at hand with a smartphone to document the event.
The potential results of poor press are far reaching; decreased customer trust and engagement, tarnished reputations, ruined careers, being made a political scapegoat, increased regulation, legal ramifications and potential financial loss.
3 – Greater investment in infrastructure
Steady power supply, quality roads and ports, and public transport connectivity influences the economy, from small businesses through to major development and export opportunities.
The Australian Government is investing a record $110 billion over the next 10 years starting in 2020-21 through its rolling infrastructure plan. Tenders for these projects will be heavily scrutinised by government and outcomes will be carefully monitored by the public. Property development and construction companies that can show competent asset management will have a competitive advantage on those that do not. With the right asset management processes and systems in place, they will be more efficient, have more oversight over assets and save time and money.
4 - Digital revolution = New business models
COVID-19 has kick-started a digital transformation throughout workplaces and industries across the globe.
With lockdowns enforced across the ANZ region, the property industry quickly uncovered the benefits and need for smarter digital solutions to assist with remote working and asset management demands via online web portals and mobile apps.
Mobile devices also boost productivity, it’s no longer efficient or practical to be tied to a desk all day. Shifting expectations about where and when work happens means organisations need to rethink the way they support a digitally-savvy, mobile workforce— especially organisations that manage geographically dispersed assets or teams.
5 - Doing ‘more with less’ relies on data
As demand for quality services grows, budgets are becoming stretched in order to set up systems to meet those demands. Every decision about how much and when to invest in your assets needs to be justified.
Comprehensive data is required from across your organisation as well as external sources so that leaders can gain a complete picture. Yet many organisations still suffer from being siloed—multiple departments using different systems to manage relevant information about assets.
Being able to accurately predict, plan and be proactive requires a holistic view. International standards like ISO 55000 endorse a whole-of-organisation approach to managing assets. By consolidating business processes and information including finance, human resources, logistics and operations you can optimise performance and minimise cost.
Now is the time to take stock of your assets
It’s clear that leaders in the property and construction sectors are facing a more volatile future, and asset management is under the microscope. Avoid poor or delayed decisions, service failures and mounting costs by revisiting your approach to asset management and considering a fully integrated solution.
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