Demystifying Asset Management, AMBoK and ISO 5500X

Demystifying AM Ambok & ISO 5500X Blog

Confusing right? Well maybe! There are a lot of terms being thrown around and it’s not clear what each of them represent.

First of all, what is an asset?

An asset is an item, thing or entity that has potential or actual value to an organization. 

What is asset management?

“The life cycle management of physical assets to achieve the stated outputs of the enterprise”.

This definition specifies a focus upon the delivery of a stated capability in which assets play a key role, and in which the business must manage its physical assets, commensurate with the business need for that capability.

What is AMBoK?

There are middle man organisations such the Asset Management Council. The Council provides information and guidance on asset management across the various industry sectors and professional roles in Australia and globally. 

The group administers the Asset Management Council Body of Knowledge (AMBoK) among other duties such as publications, models, training, certification, awards, technical journals, articles, forums and conferences. 

The AMBoK is a product of the Asset Management Council.

What is ISO 5500X?

Published in January 2014, the International Standards Organisations (ISO) 5500X Asset Management suite is comprised of three standards, namely:

  • ISO 55000 Asset management – Overview, principles and terminology;
  • ISO 55001 Asset management – Management systems – Requirements; and
  • ISO 55002 Asset management – Management systems – Guidelines for the application of ISO 55001.

The importance of asset management to business success has been reinforced by these standards. As a result of these standards, asset management now has a common international meaning.  As a discipline, asset management integrates both technical and financial decision making within the context of a supporting management system because of these standards.

How does the ISO 5500X Suite and the AMBoK relate to Asset Management?

Well, the AMBoK summarises the standards via a set of models (Strategic, Tactical and Operational) that illustrate and describe asset management practice – all backed by a peak body that promotes excellence in the practice and science of the discipline of asset management. 

Summary

I’m going to break this down for you with a picture of a nice car:

You have your car. Visualise it while reading the next few sentences.

You don’t go buying cars every month, do you? Of course, not – you maintain the one you have!

In that sense, your car is your asset to be managed.

It makes economic, financial and environmental sense to maintain the one you have.

You can manage the maintenance of your car in many ways – buy cheap or expensive replacement parts, get it serviced by the manual every 10,000km, or you could choose to even totally neglect it.

You, as the owner of the car, are responsible for the maintenance of your vehicle. 

Different maintenance strategies have different outcomes on the performance and safety of your car and what you get out of it.  Your car could run for 20 years with proper maintenance or only 2 years if you neglect it and don’t do any maintenance. 

As a discipline, asset management enables you to keep your car running reliably for the next 10 years (if that is what you need it to do) using tried and tested techniques. Those techniques are designed to provide a level of assurance that your car will deliver what you want it to do, whatever that is, while cognizant of the available budget and your acceptable level of risk.

Our next article will discuss Asset Management further.

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