The asset management process can be divided into three parts: formulating the objectives of the strategy, decisions towards the intended asset life cycle, and the execution of the proposed strategy. The first part, definition of the objectives for an asset strategy, requires an input, which will be derived directly from the corporate goals. This initial part of the process conditions the success of assets in an organization, and determines the effectiveness of the subsequent plans, accomplishment, controls and improvements.
This model shows how well every part of the organization or function can contributed to meet the company goals. The efforts hereto can be measured in terms of the quality of products or the expectations towards the services provided, viewed from the stakeholder’s perspective. This will allow to arrive at a position where an asset owner will be able to minimize the direct and indirect costs, those costs associated with mis-investments, operational losses, unnecessary maintenance costs, de-commissioning cost and ultimately, with stakeholder dissatisfaction.
In the case of asset management, effectiveness represents the overall company performance with the capacity and condition and sustainability of its assets, or the reduction of the overall company cost obtained because capacity is available when needed. Effectiveness concentrates then on the correctness of the process and whether the process produces the required result.
The last and probaly most difficult part of the process, the implementation of the selected asset strategy, has a different significance level. The success of implementation, depends the ability to ensure proper skill levels, proper work preparation, suitable tools and schedule fulfilment), will allow to minimize the direct cost (labor and other required resources). In this part of the process the asset manager has to deal with the staff and management. A real life cycle approach is the mean to act or produce with minimum waste, expense, or unnecessary effort. Only then asset management can be understood as providing the same or better for at least the same cost.