Expect asset management use in water sector to grow in next five years

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Strong growth in the use of asset management practices within the water industry is expected over the next five years, according to the findings of a study released March 11. 

The study, “Water Infrastructure Asset Management: Adopting Best Practices to Enable Better Investments,” was conducted by McGraw-Hill Construction in partnership with CH2M HILL. Preliminary findings were released January 17 at the U.S. Conference of Mayors winter meeting in Washington, D.C. 

The study shows that over 80 percent of current practitioners expect to be using eight out of the 14 asset management practices identified in the study by 2017. The greatest area of growth is for the development of an asset management policy, with growth expected in use among practitioners from 46 percent to 84 percent, and growth among non-practitioners from 5 percent to 59 percent, signaling a clear commitment to the adoption of asset management practices across the industry. 

The benefits that asset management practitioners are experiencing have helped encourage this adoption. The study shows that: 

  • 80 percent of respondents report an improved ability to explain and defend their budgets and investments
  • 67 percent have a better focus on priorities 

In addition, a higher percentage of utilities engaged in 10 or more asset management practices report achieving the benefits measured in the report. 

“The more committed an organization is to an advance asset management practice, the greater the results they are able to see in their organization,” says Harvey Bernstein, McGraw-Hill Construction vice president of Industry Insights & Alliances. “With 43 percent of the practitioners currently only using four to six out of the 14 practices, there is a clear opportunity for utilities to reap more benefits in the future.” 

The use of an asset management approach has a strong, positive impact on how utilities make decisions on asset investments, according to the study. It shows that 84 percent of practitioners consider risk assessment an important element in their decisions about investments in new or existing assets, compared to 58 percent of non-practitioners. It further shows that 59 percent of practitioners are looking more than 10 years out in their asset strategy planning, compared to 33 percent of non-practitioners.

When asked the single biggest driver of wider use of asset management by water utilities, 39 percent indicated significant needs in the industry to replace, upgrade or expand existing infrastructure, and 25 percent regard the need to determine capital investment and maintenance strategies and budgets as most important.  

“A lot of people think of asset management as being about the infrastructure itself. While the focus starts there, it is much more holistic than that,” says Scott Haskins, CH2M HILL director, Management and Strategic Consulting. “It really is a way of doing business. It involves organizational, operational and decision-making changes.” 

In addition to helping utilities focus on priorities, asset management practices increase the ability to explain and defend budget and investment proposals to governing bodies, and helps leadership better understand the risk and consequence of alternative investments, Haskins explains. 

The study provides a unique approach for measuring asset management adoption by defining asset management practitioners by the activities they are currently using rather than by their own assessment of their practice. Based on this approach, 65 percent of the survey respondents are asset management practitioners (those doing four or more asset management practices out of the 14 practices provided in the survey). 

The 2013 Water Infrastructure Asset Management study was completed in conjunction with five industry associations that reviewed the survey and distributed it to their members: American Public Works Association, American Water Works Association, National Association of Clean Water Agencies, National Association of Water Companies and Water Environment Federation. The study included 451 respondents from the U.S. and Canada, from utilities ranging from those serving a minimum population of 3,300 to a population of over 500,000. 

For the full report, visit http://www.ch2m.com/corporate/markets/water/assets/Water-Infrastructure-Asset-Management-SMR-2013.pdf. 

Headquartered near Denver, Colo., employee-owned CH2M HILL is a global leader in consulting, design, design-build, operations, and program management for government, civil, industrial and energy clients. The firm’s work is concentrated in the areas of water, transportation, environmental, energy, facilities and resources. CH2M HILL is a program management, construction management and design firm, as ranked by Engineering News-Record and named a leader in sustainable engineering and environmental services by Verdantix. For more information, visit www.ch2mhill.com.


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