Beginning the journey from managing assets to asset management
Te Waihanga New Zealand Infrastructure Commission's 2024 report Taking Care of Tomorrow Today: Asset Management State of Play confirms what many in the sector have long observed. Asset management maturity across New Zealand's infrastructure is generally low, and the gap between current practice and what is needed is significant. The report is a timely prompt to ask not just how we measure maturity, but how we build it, and what a genuine national asset management journey might look like.
From managing assets to asset management
Improving asset management is often described as a journey rather than a destination. This framing reflects an important truth: creating the right culture and capability for asset management is a long-term process, achieved through many small but steady steps in a consistent direction.
But before we can discuss the journey, it helps to be clear about the distinction between two fundamentally different approaches to physical assets.
Managing assets places the focus on assets doing things, and people doing things to assets. This approach fragments and simplifies to expedite decision-making, well suited to reactive, short-term environments, but limited in its ability to deliver sustainable value over time.
Asset management is far broader in scope and ambition. It involves an entire organisation and its supply chain working together to realise maximum value from assets across different planning horizons. It embraces systems thinking, views the organisation as a complex set of interacting elements, and creates the conditions for emergent outcomes that a managing assets approach simply cannot achieve.
The Infrastructure Commission's report identifies this gap clearly. Many of the issues surfacing across New Zealand's infrastructure sectors, in water, transport, energy, and beyond, can be attributed to organisations that are still primarily in a managing assets mode. The opportunity is to move the whole sector forward.
Three priorities for New Zealand's asset management journey
Development and education of company directors in asset management
Asset management is a relatively young business discipline. The term is believed to have been first used in the 1980s, and formal standardisation only commenced in 2004 with BSI's Publicly Available Specification PAS 55. For this reason, asset management has yet to be fully integrated into relevant undergraduate degrees, postgraduate programmes, or executive education curricula.
Aside from practitioners who have gone on to become directors, boards are therefore unlikely to have a strong grounding in modern asset management thinking. This limits the effectiveness of the board in its core asset management roles: developing asset management policy, creating the right organisational environment, and holding management accountable for establishing and improving systems and practices.
Asset Dynamics has explored this theme in more depth in a recent article for the Institute of Directors Boardroom Magazine on why asset governance belongs in the boardroom.
There is an opportunity for New Zealand to develop world-leading competence in governance for asset management. Just as competence frameworks provide assurance that operational personnel will be effective in their roles, asset management competence frameworks for directors should be developed, supported by appropriate learning and development resources.
A useful precedent exists in occupational health and safety. The Health and Safety at Work Act 2015 fundamentally changed expectations of directors, creating clear accountability and, in serious cases, personal liability. Training for directors in health and safety governance became a priority almost overnight. Given what is at stake in the management of critical infrastructure assets, the consequences of failure for communities, the environment, and the economy, the case for equivalent director-level capability in asset management is compelling.
Increased independent scrutiny of asset management practice
In many contexts, regulatory and government scrutiny of organisations managing high-criticality assets has focused on outputs such as asset management plans, and outcomes such as service performance and safety. Both have limitations.
Outputs, as externally published documents, provide at best high-level summary information, and at worst an overly positive picture designed to maintain stakeholder confidence. Outcomes, as lagging indicators, reflect the quality of decisions made years in the past, which may not be representative of what is happening now.
Evaluating asset management inputs, the systems, processes, and practices an organisation has established and implemented, is more demanding, but essential for understanding whether an organisation is genuinely set up to deliver.
One avenue is alignment with or certification to ISO 55001, the international standard for asset management, updated in 2024. Well over three hundred organisations are now certified globally, across more than forty countries. Australia has seen particularly strong adoption, with over 75 certified organisations, supported by state government frameworks such as Victoria's Asset Management Accountability Framework and New South Wales' Dam Safety Management System.
ISO 55001 certified organisations globally. Source: ISO TC 251
In New Zealand, economic regulation of the electricity distribution sector has gone some way toward considering asset management inputs. Electricity distributors are required to periodically disclose their asset management maturity against the Commerce Commission's AMMAT framework. There is evidence this has advanced thinking in the sector, with the majority of New Zealand's 29 electricity distributors having publicly stated their intention to align with or certify to ISO 55001, and many following active improvement plans.
Te Waihanga's State of Play report suggests that input-based scrutiny is having an effect: organisations subject to more rigorous regulatory oversight, including electricity distributors, consistently outperform others in asset management maturity assessments. Regular and objective evaluation of asset management inputs by competent, independent assessors would extend this benefit more broadly across the infrastructure sector.
Asset Dynamics has written in more depth about how to select the right framework and assessor, and how to ensure assessment findings lead to action.
Increasing diversity of thought in asset management
An enduring misconception about asset management is that it is a purely technical discipline. While strong technical competencies are essential for asset planning, lifecycle delivery, and reliability engineering, moving from managing assets to asset management requires the coordinated contribution of the whole organisation, including the board.
An overwhelming focus on technical matters limits both the scope of asset management discussion and the people involved in it, at both industry and organisational levels. This is problematic because the root causes of asset management failures are often not technical in nature. They relate instead to leadership and governance, organisational culture, strategy, and design.
The GFMAM Asset Management Landscape makes clear that effective asset management requires strong interfaces between asset management and finance, risk and assurance, human resources, procurement, and information management. Bringing together teams with genuinely diverse knowledge and perspectives creates opportunities that extend well beyond technical and functional boundaries.
Within organisations, deliberately defining and managing these interfaces delivers real benefits, not just through process improvement and waste reduction, but through the deeper understanding that comes when people see how their own role, and the roles of others, contributes to value realisation. In many cases this understanding has driven significant advances in maturity, such as when technical teams work with risk and assurance colleagues to fully harmonise asset management decision-making with the enterprise risk management framework.
Conclusion
Te Waihanga's State of Play report has created a new level of national awareness of the importance of effective asset management. There is now an opportunity to channel that awareness into action, to begin a genuine national asset management journey with the ambition of becoming global leaders in realising value from physical assets.
This does not require the largest organisations, the most advanced technology, or the greatest level of funding. It requires leaders with a long-term orientation and a genuine willingness to learn; accountability mechanisms that focus on the right things; and a joined-up asset management community of practice that draws on broad knowledge and capability across the sector.
New Zealand has the foundations. The question is whether we choose to build on them.
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