Managing Assets in the Context of Asset Management (2024)

This installment in the Foundational Thinking miniseries highlights ISO Technical Committee 251’s most popular article – Managing Assets in the Context of Asset Management.This article was written to clarify a common misconception about the purpose of asset management.This purpose is made clear in ISO 55000 that states: “Asset management does not focus on the asset itself, but on the value that the asset can provide to the organization.”

This concept is key to understanding what ISO 55000 standards say about asset management.The statement is clear, but the challenge has been in how the application of asset management has been interpreted, that is: is it about asset life cycle management or about value realized from and through assets?

In response to misconceptions and related debates, ISO TC 251 sought to provide clarification in the subject article.This article was published in 2017 and it took over a year to write it.Development of the article included many drafts and lengthy debates.The final version seeks to clarify that both “managing assets” and “asset management” perspectives are neither alternatives nor are in competition with one another. The article defines the relationship between these terms as follows:

"Managing Assets (things you do to assets) can be done with or without a structured organizational strategy and context.An organization gains more value from Managing Assets within a context of organizational purpose and strategy that steers this activity (and becomes Asset Management)."

This relationship sees the terms "managing assets" and "asset management" as two sides of the same coin.The logic supporting this view is as follows:

• Every organization is dependent on assets since its inception and successful organizations have well developed approaches to how they care for assets over their life cycle – this is the “managing assets” perspective.
• Asset Management, as detailed in ISO 55000, defines a recently developed management discipline.In the ISO 55000 context, Asset Management seeks to assure that assets are best employed to support performance of the organization – this is the “asset management” perspective.
• This logic recognizes that “managing assets” and “asset management” have different purposes resulting in different language and performance measures.
• Asset Managers, who focus on the performance of assets, understand that assets enable the organization’s performance and understand how to manage assets to assure this performance – this is one side of the coin.
• Other important roles in the organization do not focus on the care of assets, they focus on their use and therefore have a management perspective that can be simplified into a return-on-investment analysis when related to assets – this is the other side of the coin.

Both perspectives are valid and related.The ISO 55000 standards series does not define how to maintain assets over their life cycle.In fact, ISO 55001 uses the word maintenance only three times in the body of its text.In each case the word maintenance is used only in the context of maintaining the asset management system.

Yet, many Asset Managers continue to point to the ISO 55000 standards series as relating exclusively to the management of assets, which in their world is dominated by the delivery and maintenance of assets over their life cycle.So, from the perspective of an Asset Manager who spends most of their everyday “managing assets” ISO 55000 is a good means to help them help others understand how asset life cycle management activities assure the organization’s performance.

This point is made in the subject article that does not state one viewpoint is superior to the other.The article adeptly explains that both the perspective of “managing assets” and “asset management” are related, not alternatives, and are not in competition.What the ISO 55000 standards series seeks to do is to develop language and concepts to show how these perspectives generate value through coordination of activities that manage assets. Specifically, an ISO 55000 conforming asset management system was never intended to: “focus on the asset itself” but instead to focus on the “value that the asset can provide to the organization”.

It is this concept of value in the context of an asset management system that leads to greater understanding and realization of value from and through assets.“Managing assets” focuses on value realization through delivery of asset performance.“Asset management” focuses on value realization through coordination of activities that manage assets.Therefore, the fulcrum of value that ISO 55000 standards focus on is in understanding, aligning, and integrating how value is defined and measured.

The subject article seeks to clarify and amplify this understanding so that “managing assets” and “asset management” perspectives are viewed as being supportive of one another.The article accomplishes this by contrasting the perspectives while clarifying that there is no lead/follow logic between them.This article shows that the differences between “managing assets” and “asset management” perspectives are helpful to understand, and that when harmonized generate value.

The purpose of this article was to help professionals understand that each perspective contributes to the realization of value.The intended outcome of the article was to correct misconceptions that there is an either/or logic between "managing assets" and "asset management" perspectives. The article achieves this by clarifying that ISO 55000 standards are supportive of both perspectives, and does so by underscoring the important role an asset management system has in their coordination.

Written by: James J. Dempsey | August 1, 2023

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