Critical organisational characteristics for firms to implement asset management according to the ISO 55000 standard

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implement asset management according to the ISO

55000 standard

Can a process innovation capability model be applied for and adapted to measuring organisational characteristics needed for asset management?

By

J.J.W. van Maanen

Master’s Thesis

Presented to the Faculty of Economics and Business The University of Groningen

in Partial Fulfilment of the Requirements for the Degree of

MSc. Technology and Operations Management

University of Groningen

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C

OLOPHON Type: Master’s thesis

Title: Critical organisational characteristics for firms to implement the ISO 55000 standard for effective asset development and operations

Subtitle: Can a process innovation capability model be applied for and adapted to measuring organisational characteristics needed for asset management?

Date of publication: 25-1-2016 Author: J.J.W. van Maanen BSc Student number: 1773232

Degree: MSc. Technology and Operations Management Educational institution: University of Groningen

Company of graduate internship: Royal HaskoningDHV Company supervisor: ir. G. Haisma

University supervisor/first assessor: dr. ir. W.H.M. Alsem Second assessor: dr. W.M.C. van Wezel

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P

REFACE

As final part of the journey towards achieving my master’s degree in Technology and Operations Management at the University of Groningen, writing this thesis has been the most challenging, but also satisfying part.

The work presented in this thesis was carried out at Royal HaskoningDHV. I am grateful for being able to perform my research here and being part of their organisation during my internship. I want to thank all employees of Royal HaskoningDHV who helped me during the writing of this thesis with feedback, discussion moments, documents and other sources of information. A special thanks goes out to Gerda Haisma, my supervisor during the period of my internship, and Eric Delhez, whose expertise and support helped me a lot during the process. Furthermore I want to thank the interviewees to make precious time for me and helping me in gathering information needed for this thesis.

I want to thank Wilfred Alsem for supporting me during the writing of this thesis with his feedback and patience. Also I want to thank Wout van Wezel for assessing my thesis.

Last but not least, I want to thank my friends and especially my family for their support and remaining strong after my father’s decease.

All that remains is for me to wish you enjoyment in reading this thesis.

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A

BSTRACT

In this thesis, research to critical organisational characteristics for the implementation of asset management has been executed. The process innovation capability model (Frishammar et al., 2012) was used in order to research these characteristics, which are collaboration, culture and strategy. Subsequently, the three characteristics were adapted to asset management in order to make the model asset management specific. Four ISO 55000 certified organisations were interviewed in order to find the importance of these characteristics. The result of this research was that organisational characteristics needed for process innovation are almost equal to those needed for asset management, but are not all being treated by the ISO standard with equal importance. Furthermore, the characteristics of the initial model are generic and need to be adapted to asset management. Overlooking certain aspects of these characteristics could cause trouble in implementing successful asset management. Therefore, the ISO should think about paying more attention to those organisational characteristics. Organizations planning to implement or are implementing asset management can find organizational success factors in order to do this successfully. Prerequisite for this is a certain proficiency in maintenance and asset knowledge.

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L

IST OF FIGURES

Figure 1. Asset management maturity bow-tie ... 14

Figure 2. Seven elements of asset management... 15

Figure 3. Process innovation capability model ... 20

Figure 4. Conceptual model ... 22

Figure 5. Importance of strategical characteristics ... 27

Figure 6. Importance of cultural characteristics ... 29

Figure 7. Importance of collaboration characteristics ... 31

Figure 8. Asset management capability model ... 37

L

IST OF TABLES Table 1. Organisation information ... 23

Table 2. Case selection ... 25

Table 3. Operationalised factors ... 25

Table 4. Crucial organisational characteristics ... 33

Table 5. Organisational characteristics specific for asset management. ... 38

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1. I

NTRODUCTION

The motivation for this thesis can be found in finding ways to foster the process towards successful asset management from a management perspective. The initial development stage of an asset consists of many uncertainties when it comes to estimations and approximations for the future, where an asset can be seen as production and operating equipment and structures (Mitchell & Carlson, 2001). During this stage, decisions have a large impact as about 70% to 80% of the costs are committed in this phase (Goh, Newnes, Mileham, McMahon, & Saravi, 2010). Therefore, it will be a business advantage if costs associated with operability, maintainability, supportability, and disposal can be taken into consideration earlier, and so novel approaches are needed to achieve an integrated and effective way to deliver and operate assets. To do so, in 2013 the ISO 55000 standard was initiated by the International Organization for Standardization, which specifies which elements an asset management system should contain, assuring that objectives will be achieved for prolonged periods in a sustainable way (ISO 55000:2014). By applying the elements, organisations have the basis of implementing asset management. However, the problem is that to do so, certain organisational characteristics might need to be present to implement successful asset management. In this report, these organisational characteristics are examined.

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Asset management is crucial for organisations as it can be a source of strategic advantages, but implications of misjudgement can be very serious (Mather, 2004). Therefore it is required to investigate to which degree organisational characteristics are related to the successful implementation of asset management and how they are operationalised to make it specifically applicable for asset management. The contribution of this research can be found in the finding of, possible critical, organisational characteristics to implement effective asset management.

This research project consists of a multiple case study at four organisations and is written at Royal HaskoningDHV (RHDHV), an engineering, asset management and project management consultancy, to investigate the degree to which managerial characteristics play a role in asset management. This is done by researching the importance and operationalisation of the three managerial antecedents mentioned by Frishammar et al. (2012) through interviews at multiple ISO 55000 certified organisations. Subsequently, Frishammar’s model will be adapted to specific asset management characteristics. In addition, the role of motives for implementation will be investigated, as this could affect the success for implementing the ISO. This is already investigated for the ISO 9000 standard on quality management, but not for the ISO 55000 standard. The following research question will be answered: “What are critical organisational

characteristics for firms to implement asset management according to the ISO 55000 standard?”

In order to answer this research question it is divided in a number of supporting sub-questions:  What is considered asset management?

 What is described in the ISO 55000 standard?

 Can the implementation of asset management be considered process innovation?  Can the process innovation model be used for and adapted to asset management?  What is the role of the organisation’s motives in implementing the ISO 55000

standard?

The organisational characteristics found in this research can be used by firms to verify and monitor their management and to which extent they meet those factors which potentially provide the backbone for asset management capabilities.

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given in which the aspects of this thesis will be elucidated. This is followed by a conceptual model of the research and a research design section where the method of this research will be elaborated. Subsequently the research results will be provided. Afterwards a conclusion will be drawn and a discussion will be provided. Finally recommendations will be given.

MANAGEMENT PERSPECTIVE

As said, this research will be written at Royal HaskoningDHV. Royal HaskoningDHV is an independent, international engineering and project management consultancy. Their areas of expertise can be found in fields of aviation, buildings, energy, industry, infrastructure, maritime, mining, transport, urban and rural planning and water. The company has clients in over 130 countries, offices in 35 countries and more than 7000 people work at the organisation. The expertise of the company in the field of asset management will provide insights in organisational characteristics of clients and offer a clear image on which traits nurture successful asset management. In the following paragraphs, the management perspective of Royal HaskoningDHV on asset management will be discussed. The described perspective is obtained through preliminary interviews with employees of Royal HaskoningDHV. Therefore the information provided in this chapter can be considered as background material providing thoughts on asset management and organisational characteristics fostering asset management. Claims made in this chapter are not scientifically underpinned and still need to be validated.

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their assets. Additionally, organisations do not feel the sense of urgency to change, do not see the added value of the ISO 55000 standard or are not conscious of the potential of improvement.

Experience from Royal HaskoningDHV in working in projects teaches that certain organisational characteristics can foster or counterwork asset management. After performing a preliminary research through conversations on asset management with employees of Royal HaskoningDHV, particular management traits possibly affecting successful asset management emerged. One of the traits can be found in collaboration. Operation, maintenance, construction and renovation are often seen as different departments within the organisation. When collaboration between different departments concerning asset management is not running smoothly, asset lifecycle management is hard to achieve as a fundamental part of it is integrating entities during the development phase. To achieve that, collaboration is of great importance. Furthermore, in the conversations the attitude from managers on asset management was discussed. This may play a significant role in the success of asset management. Top management should be committed to achieve the desirable asset management performance. Additionally, this commitment should be transferred to the departments responsible for asset management to potentially achieve the desired results. This can be seen as collaboration in achieving collective goals. Often, the joint interest is not acknowledged.

Experience from Royal HaskoningDHV also teaches that the aversion towards change can be determinative for the failure of implementing ISO standards. If employees of the organisation are not willing to change, changes in the organisation will not be complied.

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2. L

ITERATURE REVIEW

In this section, asset management, the ISO 55000 standard, process innovation and corresponding organisational characteristics will be elaborated on and linked. First, asset management and organisational characteristics will be defined. Furthermore the ISO 55000 standard will be explained as well as organisational characteristics needed to implement the proposed asset management system. Afterwards a comparison between asset management and process innovation will be made: can asset management be considered as such? Also, motives for implementing standards will be treated. Subsequently a model will be proposed to test whether organisational characteristics fostering process innovation are indeed critical for asset management as well. Finally the hypothesis will be drawn.

ASSET MANAGEMENT DEFINITION

2.1.

In this part, the first sub-question “What is considered asset management?” will be answered.

“Asset management is defined as “a strategic integrated set of comprehensive processes (financial, management, engineering, operating and maintenance) to gain greatest lifetime effectiveness, utilisation and return from physical assets (production and operating equipment and structures)” (Schuman & Brent, 2005). Campbell (2010) refers to it as the balance of performance, risk and cost to achieve an optimal solution and the ISO 55000 defines it as “the coordinated activities of an organisation to realise value from assets”. Finally, PAS 55, the predecessor of the ISO 55000 standard, states that asset management is “Systematic and coordinated activities and practices through which an organisation optimally and sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their lifecycles for the purpose of achieving its organisational strategic plan” (The Institute of Asset Management, 2004). Asset management consists of multiple aspects, ranging from strategic (long-range budgeting, capital project management) to operational aspects (Campbell, 2010). Effective asset management is for a large part about balancing the demands of quality, service, output, costs, time, and risk reduction, and aims to do the following (Campbell, 2010):

 Maximise uptime (productive capacity)

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 Minimise the risk that productive capacity, quality, or economic production will be lost for unacceptable periods of time

 Prevent safety hazards to employees, and the public as much as possible  Ensure the lowest possible risk of harming the environment

 Conform to national and international regulations on due diligence

All of these are strategic necessities to remain in business; the challenge is how to best meet them. Asset management is the combination of management, financial, economic, engineering, operational and other practices applied to physical assets with the objective of providing the required level of service in the most cost-effective manner. It includes the management of the entire lifecycle, including design, construction, commissioning, operating, maintaining, repairing, modifying, replacing and decommissioning/disposal of physical and infrastructure assets (Local Government & Municipal Knowledge Base, 2015).

2.1.1. Organisational characteristics for asset management

Campbell, (2010) developed a spectrum of elements needed for maintenance excellence. Each of the legs of the diagram represents elements which can grow from innocence towards to excellence. When all legs are ‘excellent’, maintenance excellence is achieved. This diagram also considers organisational characteristics as leadership, consisting of traits also mentioned by Frishammar et al. (2012), like strategy, teamwork and motivation. Leadership must be exercised at all times. Without it, any change would not be successful (Campbell, 2010). This is comparable with top management commitment, an element of one of the organisational success factors, culture, described by Frishammar et al. (2012), which will be discussed more extensively later in this chapter. Even though maintenance is a small part of asset management, organisational characteristics may apply to asset management as a whole.

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ISO55000 STANDARD

2.2.

This section will elaborate on the ISO 55000 standard and the organisational characteristics defined in the standard, in order to answer the sub question “What is described in the ISO 55000 standard?”.

The International Organization for Standardization (ISO) is using PAS 55 as the basis for creating the first-ever international standard for asset management, known as the ISO 55000 family of standards (ISO 55000:2014). It consists of three segments: ISO 55000 (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 standard specifies which elements an asset management system should contain. The core elements of an asset management system are shown in appendix A and consist of asset management policies, (implementation of) asset management plans, asset portfolios and performance evaluations. This asset management system provides assurance that the objectives can be achieved for prolonged periods in a consistent and sustainable manner (ISO 55000:2014). How asset management goals have to be achieved is not specified by neither PAS 55 nor ISO 55000 so organisations have to fill it in themselves (Van den Honert et al., 2013). To make good use of the standard and to accomplish goals, quantitative methods need to be conducted (Minnaar, Bason & Vlok, 2013). They say asset management practitioners often avoid these methods and therefore this might be a big issue in applying the standard. This means that management should have the competences when it comes to using quantitative methods. The ISO 55000 standard states that asset management is based on a number of principles which

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consist among other things of integration of asset management processes, alignment of organisational and asset management goals, leadership and culture. This hints at a possible explanation why certain companies have little success in improving their asset management.

2.2.1. Asset management system requirements

The standard describes seven elements which determine the excellence of asset management (figure 2). The same seven elements are used in maturity tests to define the development of asset management at organisations. The context consists of stakeholders’ expectations and needs, deciding the area of application of the asset management system and the establishment, implementation and maintenance of that system. Top management must show

leadership in order to achieve collaboration, continuous improvement, the connection between

organisational goals and asset management goals and sufficient resources. Furthermore they need to determine an asset management policy which suits the organisation and decide how responsibilities and qualifications are allocated. Planning consists of goals, measures that need to be taken to restrict risks and utilising chances for the asset management system. Furthermore it describes methods and criteria to prioritise activities to reach asset management goals. Support covers (human) resources, competence, awareness, communication and documented information. Subsequently, evaluation needs to be in order. This is checked by verifying methods of monitoring, analysing of results, internal audits and management reviews. Finally, the organisation needs to react by implementing improvements. This can be done by applying correcting measures, preventive measures and continuous improvements.

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2.2.2. Organisational characteristics in the ISO 55000 standard

The ISO 55002 standard pays attention to organisational characteristics needed for successful asset management.

Leadership

The board needs to show leadership by being involved by setting goals, supporting improvement activities, monitoring asset management system’s performance and dealing with risks connected to assets. Also the policy for asset management needs to be authorised by the board, showing commitment. The policy contains principles such as guidance for asset management activities, legislation, reporting and providing people and resources, structures and processes towards reaching asset management goals. They are responsible for initiating a culture aimed at collaboration.

Next to the responsibilities for the board, leadership can also be found in roles and qualifications within the organisation. The most important is that it needs to be clear who is responsible for what, to document it, and eventually also behave according to it.

Planning

Measurements concerning risks and chances are part of planning; with the goal to obtain insights in causes, consequences and probability of events, to subsequently get the risks on an acceptable level. To do so, systems as risk matrices, risk registers and knowledge of the asset portfolio need to be integrated into the asset management system. To achieve this, adequate people and resources need to be available. An important factor in asset management targets and how to reach them is that the targets need to be quantitative: specific, measurable, achievable, relevant and timely (SMART). Important here is that asset management goals are related to organisational goals and aid in collaboration with stakeholders.

Operations

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When the current way of operations does not fit the organisation’s asset management system or goals, changes need to be made. Subjects of change can concern organisation structures, policies, processes, new assets et cetera. These changes and consequences need to be supported and rated by the organisation.

Support

Managing assets also requires support from many parts of the organisation including corporate finance, human resources, documented information and communications. This is key to creating optimal alignment with existing management systems and decision making processes. However, the support is dependent on employees’ awareness of the importance of asset management and how they can support that.

Evaluation

The leaders of organisations have a strategic role to play in the monitoring and review of asset performance. These teams need to have a good understanding of asset management practices and management systems. Historical evidence, documentation, confirmation of meeting goals can help with this. Evaluation of performance of the portfolio is also part of this, with special attention to keeping the documentation available, adequate and effective.

Improvement

To be able to improve the asset management system, documentation is crucial to measure, evaluate how the organisation coped with it and define methodologies to prevent negative events.

THE ROLE OF MOTIVES FOR IMPLEMENTING THE ISO55000

2.3.

A lot of research has been done on motives for implementing the ISO 9000 standard regarding quality management. However, this is not yet done for the ISO 55000 standard. This part will treat outcomes of previous studies in order to find possible motivations and related outcomes. This will help in answering the sub-question “What is the role of the organisation’s motives in implementing the ISO 55000 standard?”

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(Mendham et al., 1994). Multiple researchers found that the primary reason for seeking certification was pressure from existing customers (AW Business Service Ltd., 1994). Other benefits were obtained in the form of increased employee motivation and personal accountability for job performance (Freeman-Bell & Grover, 1993). Buttle (1997) carried out a research to motives for implementing the ISO 9001 standard and found that the most important benefit sought from certification is profit improvement. Process improvement was placed second and marketing benefits third. Zaramdini (2007) however found that most organisations were concerned by internal reasons, like improving processes or products than by external reasons like pressure from customers or competitors.

Joseph (2004) found that success in recovering the initial investment in ISO 9001 implementation depends on the motivation that drove the company to seek certification and how this was communicated to employees and how they perceived it. With full commitment of top management and involvement of all employees, sharing responsibilities, the greatest success will be achieved. He also states that it should be concerning the strategy of quality improvement, and not a short-term marketing ploy. Prajogo (2011) also found a positive relationship between internal motives and operational performance. In contrast, external motives had no statistically significant relationship with performance.

Vilkas and Vaitkevicius (2013) conducted a research in finding motives for implementing the ISO 9000 standard. They found both internal and external motives like improving operations, communication and customer demand. These motives will form the basis for finding motives for implementing the ISO 55000.

When looking at publication dates, it seems that older researches focus on external motivation, where more recent researches focus on internal motivations, causing questioning relevance of the older literature.

CAN ASSET MANAGEMENT BE CONSIDERED PROCESS INNOVATION?

2.4.

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A process can be defined as a structured, predefined and measured set of activities designed to produce a specific output for a particular customer or market (Becker et al., 2003). Process innovation involves innovation in the production process and component technologies that are used to produce the firm’s products (Utterback, 1994). Davenport (1993) describes process innovation as performing an activity in a radically new way and implies the use of specific change tools and transformation of business processes.

Asset management can be considered process innovation as the introduction of asset management comprises changes in the structure and processes of an organisation due to implementing new managerial and working concepts and practices (Armbruster, 2008). Therefore, it can be considered legitimate to use requirements for process innovation in the field of asset management.

Literature describes various antecedents for implementing organisational innovation: the non-technical part of process innovation. Linton (2000) for example lists important partners and Reichstein and Salter (2006) state that suppliers as partners foster organisational innovation capabilities. Furthermore, several authors, including Pearce and Ensley (2004), identify collaboration as critical for managing process innovation. Also, innovation climate is a prerequisite for successful process innovation as well as mutual understanding of the other party’s perspective, shared beliefs and values, good communication, and a facilitating social and cognitive environment (Khazanchi et al., 2007).

This, in combination with the most important characteristics described in the theoretical section and managerial perspective chapter, seem to make the model of Frishammar et al. (2012) fit this research.

THE PROCESS INNOVATION CAPABILITY MODEL

2.5.

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Figure 3. Process innovation capability model (Frishammar et al., 2012)

The model of Frishammar et al. (2012), displayed in figure 3, provides three managerial characteristics which influence innovation capabilities strategy, collaboration and culture.

The importance of strategic decision making for successful process innovation is emphasised in prior research (Reichstein & Salter, 2006). The other way around, process innovation can also support a firm’s strategy (Skinner, 1992). This importance is comparable with the ISO’s content. In Frishammar’s article portfolio management is described as selecting the “right” process innovation projects described. In the ISO standard, portfolio is described as the selection of assets of an organisation.

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Culture consist of management commitment, management competence (such as quantitative data processing) and climate. According to the ISO standard, culture is part of the internal context of an organisation. The ISO standard treats many of the subjects of culture mentioned by Frishammar, like involvement and availability of resources and employees. Even though classified in a different manner, the ISO standard and Frishammar’s model are very similar when it comes to culture.

Concluding, Frishammar’s model could suit asset management very well according to the overlap in characteristics needed. The characteristics Frishammar is treating seem very generic and therefore can be applied for a very broad spectre of management types. Therefore the next step is to research this in practice and with these results make this framework more applicable and specific for asset management

HYPOTHESIS

2.6.

The theory in this chapter gives an image of what asset management and the ISO 55000 standard are and what organisational success factors for asset management could be. Both the ISO and literature provide insight in the importance of organisational characteristics. Multiple authors and the standard address the importance of management commitment and leadership, collaboration among sub-departments and strategic alignment. As this overlaps the considered characteristics of the model from Frishammar et al. (2012) for a large part, this research will mainly focus on this model and use it as starting point for this study.

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3. C

ONCEPTUAL MODEL

The factors of influence for implementing asset management mentioned in the management perspective chapter and the theoretical background chapter are combined into a conceptual model, displayed in figure 4. This model is based on Frishammar’s process innovation capabilities model, displayed in figure 3. The input’s content is obtained through applying asset management specific subjects to the original model. This content is obtained through literature, especially by researching articles referred to by Frishammar et al., and experience in the field. The output is altered from the original process innovation outcomes to the implementation if the ISO 55000 standard. The biggest change in the original model can be found obtaining the ISO 55000 certificate. Frishammar et al. (2012) use the proficiency in realising process innovation solutions to explain the difference between theoretical (potential) capabilities and realised capabilities. For this research, proficiency is not prioritised and for now considered as less important than the three organisational characteristics. In the conceptual model proposed for this research the weight of motives to realise the asset management capabilities is added, and the proficiency will not be studied. These motives can be considered a moderator variable in successful asset management. This moderator can support, but also block the potential capabilities in becoming realised. The motives will be based on motives for implementing the ISO 9000 standard as treated in the theory section.

Organisational success factors for the implementation of asset management Collaboration

 Between partners (external)  Between departments (internal)

Culture

 Management commitment  Management competence  Climate

Strategy

 Strategic alignment within the organisation

 Portfolio management

Asset management capabilities

Potential

Realised

Weight of motives to realise asset management

capabilities (context)

Implementation ISO 55000

Proficiency in realising process innovation

solutions

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4. R

ESEARCH DESIGN

RESEARCH METHOD

4.1.

As aforementioned, the objective of this research was to examine organisational characteristics which support asset management according to the ISO 55000 certification. The organisations, the units of analysis, were investigated in order to explain what the enablers and blockers from an organisational perspective can be for implementing asset management effectively and efficiently, with the ISO 55000 standard as guidance. Current literature and theories from other fields were tested, in combination with existing experience from the field and observations.

The research was conducted at four organisations with the ISO 55000 certification. Information concerning these organisations can be found in table 1. As the organisations disliked that possibly sensible organisational information would be uncovered, all organisations were anonymised to a certain level to assure confidentiality.

Table 1. Organisation information

Organisation Industry Size Interviewees

A Chemistry park administrator (branch of company) Employees: 7.000 Revenue: 746 million Consultant contract management Project/asset manager

B Port operator Employees: 1.100

Revenue: 660 million

Quality manager Asset owner

C Electricity and gas

network operator

Employees: 3.100 Revenue: 1,106 billion

Specialist asset management Operational asset manager

D Electricity network

operator

Employees: 200

Revenue: 75 million Asset manager

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needs to be investigated, and afterwards the theory will be refined to asset management. In order to guard for outcomes only applicable for one organisation or industry, multiple organisations were needed to collect data from. Furthermore, the ultimate outcome of this research was added value for practitioners, making case research a fitting methodology. Other methods, like surveys would not fit this research, due to the need for detailed information for introducing a capability model explicitly for asset management. (Karlsson, 2010). However, to make the gathered data visible, scores were assigned to outcomes of the research.

DATA COLLECTION

4.2.

The observations made in the research cases can be grouped under qualitative methods. Interviews were conducted to address to what extent the three organisational characteristics might be important for asset management. These questions were based on the article of Frishammar et al. (2012). Due to the study’s exploratory nature semi-structured interviews were used in order to allow for new but related topics to arise and to be discussed during conversations (Yin, 2009). Given the short period available for this research, no longitudinal cases are possible, and only one moment of observation was conceivable.

For a given set of available resources, the fewer the cases, the greater the opportunity for depth of observation. However, this does have limitations to the generalisability for conclusions, models or theories developed (Karlsson, 2010). So, to augment external validity and to help guard against observer bias, multiple cases were discussed. The cases consist of organisations with most likely equal results for predictable reasons (literal replication) (Yin, 2009).

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unimportant 3 = important, 4 = very important 5 = crucial). This was used to get a clearer image on the importance of the characteristics, but cannot be used as results from survey. The questions from the interview can be found in appendix B. All questions are derived from Frishammar’s article and articles on which his research is based on. In original form they represent characteristics considered important for process innovation but are adapted to asset management characteristics. For example: “Vendors are seen and used as partners”, comes from: “Beyond intraorganisational collaboration, the importance of interorganisational collaboration has been highlighted in the process innovation literature, and it seems to be dominated by the use of suppliers as partners” (Reichstein & Salter, 2006).

Table 2. Case selection

Table 3. Operationalised factors

Cases

Y: Asset management

capabilities X: Organisational characteristics ISO 55000 certification Strategy Collaboration Culture Organisation A

ISO 55000 certified Important and present Important and present Important and present Organisation B Organisation C Organisation D

Y factors Operationalisation X factors Operationalisation

ISO 55000 certification

No further

operationalisation

Strategy Strategic alignment within organisation

Portfolio Management Collaboration Internal

External

Culture Management commitment Climate

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The data used in this research was collected by the researcher himself and therefore can be considered as primary data. The data sources considered in this research are company information and thoughts from management, collected through interviews.

To establish the construct validity, multiple sources of evidence were used per case during the data collection.

Reliability of this research is guaranteed through following a case study protocol. All interview data will be transcribed and stored in an electronic database.

DATA ANALYSIS

4.3.

The first step taken was transcribing the audio taped interviews verbally. Subsequently all relevant words, phrases, sentences and sections were labelled. The labelling was aimed at finding preconceived theories and conceptualisation of new ideas specifically for asset management.

The deductive coded categories (appendix C) initially used for analysing the interviews, did not seem to cover the answers given during this interview sufficiently to answer the research question.

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5. R

ESEARCH RESULTS

In this chapter the results from the interviews taken at ISO 55000 certified organisations will be provided. Tables with mean scores of all organisations will be displayed and the eye-catching results will be elaborated on. The texts in front of the bar show the questions from the interview in a shortened way. The scores given by the organisations can be found in appendix E and comprehensive results from the interviews are displayed in appendix F. The higher the score means the more important the characteristic is for implementing asset management. As assigning a number to these characteristics is prone to subjectivity, the scores shown can be considered estimates and a clarification of the results. Nota bene: this research was not designed as a survey. The asset management capability model can be found in figure 8, and the specified organisational characteristics for asset management are shown in table 5 and 6.

STRATEGY

5.1.

In general, strategy characteristics are considered as important for asset management and reaching the ISO 55000 certification in specific. The mean, lowest and highest scores of the interviewed organisations are displayed in figure 5.

Min Max 3 4 4 4 4 5 3 5 3 5 4 5 3 3 3 4 3 4 3 3 4 5 3 4 4 4

Figure 5. Importance of strategical characteristics for implementing asset management

0 1 2 3 4 5

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Portfolio management is considered as the backbone, priority and key success factor of asset management by several organisations. This translates itself to knowledge of projects, making it possible to purchase material over different projects, saving costs. Another way of managing portfolio is project mapping, in which maps contain project information but also risks and chances. Other tools are SWOT (strengths, weaknesses, opportunities and threats) analyses, PESTEL (political, economic, social, technological, environmental and legal factor) analyses, long-term planning, capex and operating expenditures decision models quality and capacity documents, GIS (geographical information system) applications and policy supporting systems. The processes are also graded by the certifiers, so for certification it is important to have competence and systems to control portfolio and make it transparent. A challenge in doing this is connecting decision making processes from different departments, for example decisions in operational expenses and project management (organisation B). This can be considered important as the departments have different interests (organisation A). Furthermore, the existence of all those systems does not mean everybody works with them, so attention needs to be laid on actually working with those tools (organisation A). When it comes to acquiring new technologies, importance can be found in keeping up with the newest techniques, especially in asset registration (organisation D). This can be done from inside the organisation but also be acquired from suppliers, as long as expertise is present to use the technology.

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organisation C: “In order to carry the strategy, fundamentals are needed to know departments’ roles and responsibilities” When it comes to future market needs, all organisations recognise the importance. In order to learn the needs, contact moments with stakeholders are needed. For certain industries this is very hard, such as companies dealing with the current energy transition and global economy development. However, to meet future needs changes in your own process might need to be made. According to organisation B, drawing the strategy plan and matching scenarios can assist in adapting to the future in terms of flexibility and responsiveness. On a more current and tactical level, strategy per customer helps in meeting market needs (organisation A).

The biggest differences in scores are found in the importance of known SWOT’s and the use of tools to get the SWOT’s known where scores differ from 3 to 5. Organisation A, for example, admit there is a lack of awareness in working with all tools they have, and therefore do not consider them as crucial, where organisation D says the tools are crucial for gaining transparency and to show supervisors how they do it. This can indicate differences in industries.

CULTURE

5.2.

As for culture, most assertions from the interview were considered important, just as found by Frishammar. The mean, lowest and highest scores of the interviewed organisations are displayed in figure 6. Min Max 3 5 3 4 3 4 4 3 3 4 3 4 3 4 3 4 4 5 3 3 3 3 3 4 0 1 2 3 4 5

The attitude of top management Top management commitment Leadership in management Innovation stimulation and support Support of changes in processes Creation and impl. of routines and knowl

Psychological safety Knowledge of process innovation

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The most notable result in management competence as component of culture is the crucial importance of knowledge on quantitative data concerning assets. This is operationalised in a rigorous way: engineers, so called data clubs where people meet to discuss and departments were present in the investigated certified organisations. In this case data is considered as quantitative information of assets on which decisions can be made on replacement, asset’s conditions, et cetera. Extra important here is the conversion of that data to understandable languages for different departments, so everybody can work with it. Furthermore, the ISO 55000 standard asks for a competence matrix, more or less forcing organisations in continuously working on competence on asset management. A pitfall seems to be implementing and sharing that knowledge over the whole organisation (organisation A). When it comes to availability of staff for innovation, it is considered important. It is operationalised by dedicated departments, exchange of knowledge and possibilities to attend fairs. However, this is not the case at all organisations. One organisation considers it as important, but the execution of such innovations is scarce. Still the organisation is ISO 55000 certified. Finally, willingness to change is considered important by both the organisations as the ISO 55000 standard.

An innovative climate is considered as rather important as well to become and stay certified. Employees can be challenged creatively and supported in out of the box thinking while processing their ideas and opinions in an integer way. On the downside, too many ideas or too much interference can counterwork in achieving concrete ideas and products (organisation B). In order to achieve process innovation, it needs to be supported by the organisation to preclude criticasters from getting support. Criticasters in this context are not against asset management itself, but changes in processes caused by asset management. However, where criticasters should not get a too strong position, they should be heard and be taken serious: they often see things of importance for the change process. On the other hand, routines are important; especially for obligatory tasks (organisation D). This can be achieved through documentation, formats and standardisation (organisation A).

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management mostly is initiated by top management, it is crucial that they are committed and facilitate process innovation (organisations C and D). On the other hand, this commitment is needed to a certain level; space is needed for departments and other managers to implement according to their own idea and vision (organisation D). Furthermore, to keep top management committed to asset management, an ambassador helps in keeping them interested and keeping the subject on the agenda.

The biggest in scores were found at the importance of the attitude of top management towards organisational innovation, ranging from 3 to 5. Organisation A describes that it is encouraged, but does not define as crucial, where organisation D does describe it as such.

COLLABORATION

5.3.

Collaboration, as mentioned by Frishammar, is of great importance according to the organisations. Distinction is made between internal and external collaboration. The mean, lowest and highest scores of the interviewed organisations are displayed in figure 7.

All organisations use and see certain suppliers as partners and use performance contracting, many contact moments, data sharing and system development in partnership to empower that, with long-term relations as result. Furthermore, knowledge from suppliers can be

Min Max 3 4 3 4 2 3 3 4 2 3 4 4 3 5 3 3 3 5 3 4 3 4 3 4 3 4 0 1 2 3 4 5 Common vision Internal collaboration is facilitated Team-based organization characteristics Possibilities form and distribute ideas End user involvement Process awareness Expertise of departments Knowledge creation and transfer Suppliers are seen and used as partners Knowledge of suppliers Knowledge of customers Contact with competing organizations Contact with noncompeting organizations

In ter n al E x ter n al C o ll ab o ratio n

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this, not all would describe it as very important for achieving ISO 55000 certification. Knowledge from customers can be used for risk management (organisation A), as they might have specific knowledge. Other organisations do not use knowledge from customers much as the organisations themselves have all the knowledge needed. Next to contact with suppliers and customers, there is contact with competition and non-competition: learning from each other is very important, especially when it comes to safety measures or accidents. Purely for achieving the ISO 55000 certification, it is recommended to take a look at other companies further in the process to see how they interpret the standard (organisation B).

Achieving a common vision in the organisation is of great importance according to organisation B: it develops uniformity and it stops people from “running around”. Making a plan of actions for the organisation can help in achieving this vision and avoiding discussions. Collaboration is facilitated digitally, for example by means of platforms with presentations, documents et cetera, but also through work floor layout by placing departments strategically close to each other. Team-based organisational characteristics can be found in all organisations in terms of process and chain thinking, shared responsibilities and collaboration, which provides advantages for asset management, as long as it is clear who is responsible for what (Organisation C). Organisation B thinks it is not directly important to become certified, but for world class asset management it would be. To prevent miscommunication between the designer and end-user it is of importance to involve the end-user through dialogues in the entire innovation process (organisation A). End-user involvement can be internal (for example machine operator) as well as external (users of roads). Furthermore it is important that employees know they are part of a process. This helps in safety and risk management as they think about steps in the process after his job. A hazard however is that it is considered hard to translate strategic process to operational level, as mentioned before. The use of different expertise throughout the process is according to organisation B a necessity: different departments as project, maintenance and finance need to be in contact with each other, forming an oiled machine. Also knowledge transfer is considered very important in achieving certification: there needs to be space to follow courses, conferences, but also transitional periods when people leave (organisation C).

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Organisation A gives for both subjects a score of 3, but do operationalise the subjects and see the importance and pitfalls. Organisation B also describes operationalisation and pitfalls but see both characteristics as a necessity. The difference in score could be caused by personal differences instead of true importance.

CRUCIAL CHARACTERISTICS

5.4.

In addition to the average scores shown in figures 5, 6 and 7, the characteristics considered crucial by at least one organisation are displayed in table 4. Organisations see a few characteristics as crucial for their asset management and implementing the ISO 55000 standard. The characteristics are considered crucial when the organisation uses words like ‘key’, ‘crucial’, ‘critical’, et cetera. According to them, these characteristics are most certainly of great value for asset management. Note that these scores do not correspond directly to the scores displayed in figures 5, 6 and 7, where the averages are shown.

Table 4. Crucial organisational characteristics

Interview question

No. of times mentioned

as crucial

The strategy is known in all organisational layers 1

There’s competence on portfolio management 2

Strengths, weaknesses, opportunities and threats are known within the

organisation 1

The organisation uses tools/systems to process SWOT’s 1

The organisation has the skills to acquire new technologies 1 The attitude of top management facilitates organisation innovation 1 There is enough knowledge and technology to process quantitative data 2

End users are involved in the entire innovation process 1

The expertise of various departments is included in the process 1

MOTIVES FOR IMPLEMENTING THE ISO55000 STANDARD

5.5.

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dependent as some organisations operate in a regulated energy market. Customer demand and marketing are in line with statements made by Morrow (1993).

Internal motivation is considered as the main incentive for organisation B: without internal motivation it won’t work, so top management commitment is crucial, which is in line with Joseph (2004). Organisation D stated that the motivation for ISO implementation can be found in controlling quality with the framework and making it able to test it though audits. The motivation for the standard cannot be found in improving quality of products, internal operations or communication for organisation B: It worked the other way around as the ISO standard made them think about it. Organisation A emphasised that if a company is not ISO 55000 certified, it does not mean they have bad asset management.

OTHER RECOMMENDATIONS FROM ORGANISATIONS

5.6.

When the organisations were asked what they think is critique in applying the ISO 55000 standard, organisation A commented: “Put responsibilities in the organisation. Involve the organisation in implementing and auditing of the system. Make people aware of the role they have within the system.” This is also covered in the model, namely by the internal collaboration, commitment and climate characteristics, showing that the model indeed addresses key characteristics for asset management.

Organisation B comments on the importance of internal motivation, led by top management commitment. Furthermore they say it is important to use the ISO as a means, not as an end. However, first a certain maturity on assets and their maintenance is a requisite for implementing the standard. This is confirmed by the other investigated organisations, which all had a certain maturity before going for certification. Top management commitment and management competence on portfolio management is treated by the model.

Organisation C pins on communication: have a clear image on who has which tasks and have clear agreements. A pitfall in implementing the standard is details: they cost a lot of time and are very important. Communication is not implicitly mentioned in the model, but collaboration and facilitation of it does treat the implementation of ways of communicating.

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strategy. Next to this they give the tip: talk with mathematicians to get more out of quantitative data. These points of attention are also treated by the model.

SUB CONCLUSION OF RESULTS

5.7.

A point of attention in interpreting the scores is that assigning a number to these characteristics is prone to subjectivity and therefore scores shown can be considered estimates. The reason behind the weights, operationalisation of the characteristics and pitfalls give a better image then just the rating.

As expected, almost all characteristics considered by Frishammar are also important for asset management, with some in particular. Competence in portfolio management and skills to acquire new technologies are considered the most important when it comes to strategy characteristics. Knowledge of quantitative data and top management commitment scored the highest in culture. Internal collaboration is considered more important than external collaboration, with the highest scores at knowledge creation, collaboration between departments and user involvement throughout the process. The lowest scores were gained at the use of knowledge from customers and using suppliers as partners. Before thinking about asset management and becoming ISO 55000 certified in particular, organisations need a certain maturity when it comes to the basics: knowledge of their assets’ attributes and associated maintenance.

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such innovations is scarce. Still the organisation is ISO 55000 certified. Another explanation that is in line of the last explanation is that it can be that the characteristics are of limited importance for becoming certified, but to achieve “excellent” asset management (figure 1), extra attention needs to be paid.

As mentioned in the theory section, the ISO standard does not pay much attention to collaboration as Frishammar’s model does. Even though the standard mentions it throughout the documents, no chapters are dedicated to collaboration. However, collaboration and internal collaboration in particular is seen as an important factor in achieving good asset management. Therefore it might be important for the ISO standard to take note of the importance of collaboration as it does help in achieving asset management excellence.

A prerequisite for being able to introduce asset management is a certain maturity concerning maintenance and knowledge of assets. This then can be considered a moderator in achieving realised asset management capabilities from potential capabilities.

ASSET MANAGEMENT CAPABILITY MODEL

5.8.

Findings in this research have been combined and put in a model, which is displayed in figure 8. The success factors displayed on top contribute to potential asset management capabilities. These characteristics help with implementing the ISO 55000 standard, and the standard simultaneously helps with achieving potential asset management. The weight of the organisational success factors are not displayed in this model, but can be found in the results section of this research. The characteristics are specified in table 5 to make this framework less generic and explicitly matching asset management. Furthermore, detailed characteristics considering motives are displayed in table 6.

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Collaboration

 Between partners (external)

 Between departments (internal)

Culture

 Management commitment

 Management competence

 Climate

Strategy

 Strategic alignment within the organisation

 Portfolio management

Potential asset management capabilities

Motives for ISO 55000 implementation  Internal:

- Top management

- Control mechanism needed

 External: - Legislation - Marketing

- Customer demand

Realised asset management

capabilities

Competence at operational and maintenance level Implementation ISO 55000 standard

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Table 5. Organisational characteristics specific for asset management.

Characteristic Sub characteristic Specific for asset management Collaboration External (Long term) Performance contracting

Internal

Collective sense of ownership of assets End-user involvement throughout the process Chain oriented

Contact moments between maintenance, operations, project, finance departments Culture Management commitment Ambassador for asset management helps getting attention

Management competence Fulfil different information needs for different roles All involved need to know their part of quantitative data

Climate Transfer of knowledge important, especially practical aspects of asset management Lock obligatory tasks in routines

Strategy Strategic alignment within organisation

PDCA cycle to re-evaluate

Long term asset management policy plan

Maintenance, management, inspections, all monitored by asset management department

Translate strategy to operational layers: practical examples Continuous contact with customers

Portfolio management

Display project management do adjust overlap, purchasing, et cetera Tune operating expenditures and project management processes Make risks transparent

Asset registration system

Table 6. Detailed motives for implementation of the ISO 55000.

Internal Control mechanism needed Safety precautions for operators, end-users, maintenance External Legislation To show you can do it within regulations

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literature research section. For example, strategy is considered important, which is in line with Frishammar’s model and literature from Reichstein & Salter (2006). The most notable result in management competence as component of culture is the crucial importance of knowledge on quantitative data concerning assets, as mentioned by Minnaar, Bason and Vlok (2013). Furthermore, certain important issues appeared specifically for applying successful asset management.

The ‘stable’ factor in this research offers more ground for discussion as ‘an ISO 55000 certified organisation’, even though showing a certain level of proficiency, still is located in a grey area as shown in figure 1. All organisations had the certification, but answers still differed from organisation to organisation. The cause of this could be different maturities in asset management. Especially when the subject is operationalising how the organisation achieved characteristics mentioned in the interview. To get a better insight on applicability of Frishammar’s model, and especially the asset management specific characteristics, further research is needed. Theoretical replication can show differences in organisational characteristics and maturities in asset management. Quantitative research assessing more organisations could help in making this relation more visible. Also longitudinal research with several cases could benefit the research as it could show differences in maturity in both asset management and organisational characteristics during the process.

Since this study only treats four cases, the mean score per characteristic can give a distorted image of the importance of the characteristic. The importance could be industry dependent and there for not equally important for asset management altogether. This, next to differences in maturity, could also explain differences in scores per characteristic.

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time, organisation D does see making use of suppliers’ knowledge as important, which seems to be inconsistent.

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7. C

ONCLUSION

The research question to be answered was: “What are critical organisational

characteristics for organisations to implement asset management according to the ISO 55000 standard?”. During the study critical organisational success factors for asset management were

found. After researching whether a process innovation capability model can be applied for and adapted to measuring organisational characteristics needed for asset management, the conclusion tends to be ‘yes’. However, to add more value to implementing asset management, the generic characteristics should be more specified to asset management, as presented in table 5. This means that the hypothesis “the process innovation capability model can be used for asset management capability as well, but needs to be specified”, stands. All questions from the interview were considered at least important, with a minimal score of three (on the five point Likert scale), with the exception of two two’s. Not all characteristics were considered evenly important by organisations and ranged from not important to crucial. Some of the most important characteristics found were knowledge on quantitative data, competence on portfolio management and skills to attain and implement new technologies.

Also, the ISO standard does not pay as much attention to collaboration as Frishammar does, but it is considered important by the investigated organisations. To make the ISO standard more comprehensive, this could be added. Furthermore, all organisations address critical organisational characteristics which are treated by the model, proving the importance of the three characteristics initially stated. Another finding is the necessity of competence at operational and maintenance level; as the primary element of asset management, this needs to be mastered before going for certification.

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8. R

ECOMMENDATIONS

The goal of this research was to find critical organisational success factors for firms to implement asset management. Findings of this research can have consequences in multiple ways: for Royal HaskoningDHV, for other organisations wanting to implement asset management and for the International Organization for Standardization.

First, findings can influence business done by Royal HaskoningDHV. Currently, RHDHV uses a maturity scan to measure asset management development at organisations. This scan covers seven elements needed according to the ISO 55000 standard. However, as the standard does not cover all important organisational characteristics found in this research as extensive as desirable, it might be incomplete. In addition to the ISO 55000 maturity scan currently used, a maturity scan based on Frishammar and the asset management specific subjects, could be of added value for RHDHV in measuring the asset management maturity of an organisation. For more comprehensive recommendations an advisory report is available.

Even though the ISO 55000 standard covers Frishammar’s model for a large part, it does not pay attention to some subjects which are being considered as very important according to the investigated organisations, like collaboration. Collaboration is seen as an important means to achieve successful asset management, as is the ISO 55000 standard. Extra attention could go to how knowledge can be created and transferred, collaboration between departments and end-user involvement. Ideas could be treating how to physically put departments together, describe characteristics of team-based organisations, and address the importance of contact moments between departments. Furthermore it could lay more emphasis on subjects which scored very high or even were considered crucial, as displayed in table 4.

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