START AS YOU MEAN TO GO ON: GAINING PAS-55 CERTIFICATION AND EMBEDDING IT IN THE ORGANISATION

2011
Duncan Michie*, Terry Mundy
*PricewaterhouseCoopers, UK. Duncan.Michie@uk.pwc.com, Lloyds Register, UK, Terry.Mundy@lr.org

Keywords: Asset management, PAS-55, organisational change

in the transportation sectors with rail companies, air traffic control, airports and logistics companies seeking and achieving certification. Many successful organisations have used the journey to PAS55 certification as a way of driving change in asset management in the organisation and also for driving a range of business benefits including: 1. Efficiency in investment planning, through the deployment of whole life costing, decision support tools and asset management systems; A better understanding of asset and business risk through risk based approaches to asset management; The deployment of organisation wide performance management regimes to support the delivery of required business outcomes.

Abstract
This paper provides a range of examples that can be used to support utilities prepare and engage with the requirements around PAS-55. The perceived benefits of PAS-55 are increasingly acknowledged to facilitate better decisionmaking and execution for all operations supporting the delivery of optimum life and/or capacity of assets, optimising capital expenditure and reducing whole life asset costs. We explore the aspirations behind the desire for asset management system alignment to PAS 55, beyond simply a management objective, to a desire to be best in class and the tangible benefits that accrue whilst on the journey. We include examples from organisations looking to gain PAS-55 certification, and their progression through the transitional phase, highlighting the re-alignment of process and culture as well as the organisational aspects necessary to deliver best value from implementation of a PAS-55 based system. The paper identifies the cultural shift as perhaps the most difficult and lengthy aspect of the transitional processes to embed, but nevertheless successful implementation holds the key to the realisation of greatest value from the process.

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1 Introduction: gaining benefit from PAS-55 certification

As the international benchmark for asset management systems, PAS-55 [1] defines the key elements required in industry leading management of physical assets. An early adopter was the power transmission and distribution sectors in the UK, actively encouraged by the regulator. This recognition has gathered momentum globally, initially mainly within the power, water and gas sectors and now increasingly

It has been reported that not all those who have moved towards, and gained certification, have really seen the value from their effort. This can depend not just on the approach taken by the assessment body but critically also on the underlying reasons for an organisation choosing to pursue a PAS 55 certification. Organisations need to move beyond the aspiration for gaining PAS-55 as a management objective in itself and recognise that a short term badge gathering exercise does not translate into medium and long term business benefit. Taken as part of a long term drive for business improvement and excellence, there is real value to be gained. The companies that have succeeded in securing value from the PAS-55 journey have in particular focussed on: 1. Developing strong and clear linkages between the policies and processes identified to build, operate and maintain assets, collect data and create the useful information needed for asset management

(breaking down silos); successful programmes are often defined by a focus on cultural change which builds the asset management capability of the organisation and also give clear definition to the interfaces with other part of the organisation (e.g. finance, the field operatives etc); 2. Consistently embedding an understanding of asset risk in the organisation and using the assessment of risk to drive operational and asset management related decisions; and Securing and maintaining the benefits through programmes of cultural change throughout the organisation.

closing meeting to the management team of the organisation under assessment. This is followed by a detailed report as to findings classified according to the seriousness of the weakness identified. Whilst the discussion may start around the items identified requiring improvement, the key focus is on how the organisation can explore options to make changes, taking them further along the road to an effective asset management system. 2.2 Following up on the gap analysis: an example approach Organisations should gain as much as possible from the gap analysis and start building the internal drive for asset management change. We have seen a number of routes adopted to build on the learning from the gap analysis: Reviewing the gap analysis in a series of workshops to identify what the key issues were and how they could be addressed. In one organisation, these workshops were also attended by external advisors with experience of asset management transformation to provide the external perspective on what other organisations had done to achieve certification. Invitations to the workshops were sent widely across the organisation (i.e. not just asset management but also to capital programme finance, HR and operational people as well.). The aim of the workshops was to brainstorm ideas from across the organisation on how best to address the issues. The benefit of having attendance from across the organisation at these workshops included new ideas from outside asset management about what could be achieved. In addition, the workshops started the process of co-working across silos and were also able to develop some organisation wide interest/momentum in the implementation of the PAS-55 based system and the recognition of the achievement that PAS-55 certification would provide.. Ensuring senior managers are active sponsors of the business change required to achieve PAS-55. In one organisation where we recently worked, the Asset Management Director was responsible for the achievement of PAS-55 but all directors took on responsibility to support the achievement of the objective. We have seen organisations undertake extensive organisation wide communications around achieving PAS-55 including measures such as countdown to certification or an assessment of gaps closed from the gap analysis. It is important as well for senior management to reinforce their spoken commitment to PAS-55 with the required actions (for example in the workshops described above, the Asset Management Director was accompanied by a different member of the senior team in each workshop).

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Securing real benefits from PAS-55 often starts with how an organisation prepares for gap analysis and certification as described below.

2 Preparing for PAS-55 certification

2.1 The gap analysis For many organisations the first step towards PAS-55 certification is the gap analysis. The gap analysis represents a high-level assessment undertaken to examine the overall status of the asset management arrangements against the requirements of PAS 55. The objective of the gap analysis is to identify any major gaps against the standard, and report on any weaknesses in the Asset Management System against each PAS 55 clause. The purpose of the assessment at this stage is not to undertake a detailed analysis of all different elements of an AM System but to establish an overview of the whole system, identifying areas for improvement which present most risk to the achievement of the organisations business objectives. The gap analysis is typically performed through discussions with key reports. The audit technique adopted for this process provides the freedom for the auditee to explain their management systems without concerning themselves with how this meets the requirements of PAS 55. This approach is based upon the view that it is more important that interviewees use the time to explain how they do their job within the AM system, without worrying about another specification. Using a Socratic approach, the assessment team promotes a challenging discussion around key issues, which teases out the important areas for change and often helps the organisation understand their own system more fully. The challenge for the assessment team is to relate the information gleaned in these discussions to the requirements of PAS-55, reflecting the context within which the organisation is working and providing relevant feedback. On the conclusion of the gap analysis, which typically spans 3 to 4 days, a verbal report of the findings is presented in a

Treating achieving PAS-55 as a programme of work with appropriate management and programme delivery measurement: Most of the successful clients we have worked with have run asset management transformation programmes. The programme structure would focus on the requirements of PAS-55. Specifically this has meant the definition of a programme of work based on meeting the requirements of the PAS and prioritisation of the projects for asset management improvement that will contribute to achieving PAS55 certification. The programme should be supported by a management structure with the appointment of a programme manager with accountability to the executive team and executive director that is responsible for asset management change. A rigorous programme management approach can be used to track delivery of the activities to support the PAS certification. The certification process is an important exercise for an organisation and should be taken seriously with appropriate levels of executive sponsorship and resource available to address any issues arising from initial gap analyses undertaken by PAS-55 assessors.

performance analysis so for example in instances where an asset has failed the historic SCADA data for that asset is analysed to see if there were any indicators, in the run up to the asset failure, that might provide some predictive intelligence for asset management for similar assets.

4 Embedding the risk management approach

A key challenge for PAS-55 compliance and securing long term benefit for asset management transformation is taking an integrated approach to risk assessment and management in investment planning. Examples of good practice in this approach exist in the water and gas sectors where corporate and business unit risk registers are used to drive the analysis of business risk in assessing whole life investment planning. Best practice approaches focus on the contribution of asset risk to overall business risk. Investment planning can then be undertaken in the context of understanding how asset risk contributes to business risk for example: the impact of asset failure on delivery for customers (e.g. a supply outage). Investment planning can then be undertaken using some of the advanced decision support tools available to identify whole life investment plans in the context of asset and business risk. It is important that in making these risk based decisions, the organisation has a clearly defined way to express risk, and equally important, a clear risk appetite understanding those things which are acceptable to the business and those which are not. Without this common language and risk appetite the decision processes to achieve the optimum balance between output performance, cost and retained risk are at best weakened and at worst may give the wrong message. This is particularly relevant in the comparison of major investment proposals. In addition to including risk in the asset investment planning approach some organisations have developed risk based dashboards for the organisations assets so that senior team members can understand asset health and the level of risk the organisation is running at any particular time. An example of the implementation of this process was provided by one of the first Power Generators to gain PAS 55 certification. The generator recognised the visibility and transparency required by the standard, particularly in relation to hazard identification and criticality analysis represented the key to conformance and management control across the fleet of power stations. As a consequence from the PAS 55 compliant framework a Process Safety philosophy was developed and refined which over 3 years realised the following major benefits : >20% reduction in operations and maintenance costs >20% increase in availability >40% reduction in plant forced outages.

3 The holistic approach: strong and clear linkages

One of the key aspects of the asset management system described by PAS-55 is that there is a clear line of sight from the strategy and goals of the organisation through the objectives and activities of asset management. Asset management should be aligned with and support the achievement of the organisations corporate goals. This holistic approach has been established in a number of organisations in different ways one of the more effective that we have observed is to create a series of working groups from across the whole organisation to identify the linkages that would be required for successful PAS-55 based asset management and then identify where departments would need to work together to achieve those linkages. The cross organisation working groups can then begin to define processes that would support those linkages (e.g. where finance need to be integrated into the asset management process or where the capital programme needs to be linked to asset management to start to develop whole-life costing strategies). We have seen this approach successfully deployed in the water sector where two very interesting linkages have been made. The first is where the water and sewerage treatment plant operators are included in asset design and maintenance planning so that maintenance planning cycles can take into account operational drivers on the asset and similarly the assets can be designed with particular operational challenges in mind. Also operational data from SCADA systems is being deployed by asset managers to undertake asset

5 The importance of securing cultural change

The PAS-55 approach creates the awareness that everyone in the organisation has a contributory role to play in an effective asset management system which instils a sense of purpose and direction. It encourages a one team perspective and dispels the silo mentality which prevails in most organisations if not checked. Earlier in this paper we identified the change workshops and effective programme management as tools that have been used to start a process of bringing a new culture to an organisation and to asset management. Change in asset management to deliver the requirements of PAS-55 will require challenges to aspects of the culture of an organisation. The relationships between asset management and other parts of the business will need to be redefined. Achieving an effective cultural shift to support PAS-55 implementation is a slow process. Experience from some of our clients in the electricity sector shows there are some key techniques that can be used to support the cultural shift in particular: 1) Sponsorship from senior management in the organisation in particular the senior team openly committing to PAS-55 and ensuring their behaviour reinforces the requirements of PAS-55. Senior management will need to ensure they make their decisions based on information produced by approaches consistent with the PAS. The individual performance management system for the organisation is often overhauled to ensure that behaviours that support PAS-55 are rewarded. 2) Creating awareness in the organisation that everyone has a contributory role to play in an effective asset management system which instils a sense of purpose and direction. It encourages a one team perspective and dispels the silo mentality which prevails in most organisations if not checked. 3) Effective upward and downward communication has a critical role in delivering the cultural shift to manage expectations and to describe the nature and purpose of the change. 4) Maintaining a sense of vulnerability - ensuring that there is an openness and willingness to learn from others and a culture that continually challenges business as usual Bringing each of these aspects into the change programme is likely to create an organisation focussed on achieving effective change, which in turn will lead to improved asset management outcomes and certification. Just as important is longer term focus on delivery of effective asset management in an enduring way and the on-going contact with the assessment team, post certification, ensures progress along this journey if certification is to be retained.

6 Certification to PAS 55
The route towards certification, from the gap analysis has been mapped within this paper, however the final stage the certification assessment, the final hurdle, has yet to be overcome. Certification assessment is performed when the organisation seeking certification is satisfied that they have addressed the findings identified during the gap analysis, have closed out any major issues and have made significant progress on an action plan to close out the findings classified as minor deficiencies. The certification assessment will draw on the output of the gap analysis and the progress made, and will seek evidence that processes are in place addressing all areas of the PAS-55 specification. This more detailed review covers every aspect of PAS-55, focussing more effort in areas such as risk, strategy and planning. After a period to address any remaining issues, and to build a body of evidence of application of processes, a further assessment is made to see the system being used. This typically ranges from reviewing senior level decisions to witnessing on the ground asset interventions. An important area examined is the communication within the organisation and extending to its contractors such that everyone is aware of the asset management policy and their individual contribution towards its implementation. Certification to PAS 55 is the provision of a public statement of the credibility of asset management practices and asset performance of the certified organisation. However it is not an end in itself but rather the means to the end which is most important to extract maximum value from the process. Experience has shown that added value to the certification assessment process is best delivered through the adoption of the following assessment principles: Seeking Evidence of Conformity rather than looking for non-compliance, represents the most positive approach to assessment and provides better value add to the organisation and individuals being assessed whilst additionally providing assurance that weakness in the system will be found. Socratic Questioning provoking discussion and debate and assisting clients to identify the best practices that may be relevant and applicable to their circumstances. Domain sector Expertise Assessors assigned based upon their operational knowledge and experience in the domain which represents the core business of the client organisation. Ensuring that the assessors speak the same language are empathetic to the concerns and issues of the client and have a broad awareness of the risks to which the sector is exposed and are therefore best placed to add value to the assessment process.

7 Conclusion
The PAS 55 framework provides a sense of focus and direction without which the asset management activities can set off on a course of action which maybe at variance with the objectives of the business plan and therefore less than effective for the organisation as a whole. The benefits of PAS 55 framework compliance are increasingly recognised and reflected in a growing number of organisations going through certification. The achievement of PAS-55 certification requires effort and management commitment. It is a step along the asset management journey and reflects that organisations have met or exceeded the requirements of the standard. To retain the certification requires a sustained approach to improvement and management commitment to the benefits the PAS-55 approach brings. PAS 55 certification should not be viewed as a badge to be collected. Such a short term approach risks missing the full opportunity for long term improvement and change. Indeed, the attitude this approach may instil in an organisation is less likely to foster the types of behaviour or systems approach that would result in a PAS-55 certification. The certification process can act as a catalyst for implementing changes in a business changes required to move the business to effective asset management. This is still not the final goal. It is the impact that effective asset management has on the business that is important. Asset Management done well protects investments and explicitly manages the performance of the business in order to meet corporate goals. PAS 55 certification represents independent confirmation of the achievement of this aspiration.

Acknowledgements
We acknowledge the advice support and comments on the Enterprise Asset Management consulting team at PwC and the team at Lloyds Register for their support and advice during the preparation of the paper.

References
[1] BSI. PAS-55 Asset Management Part 1: Specification for the optimised management of physical assets. (2008)