The Asset Management Journey: A Case Study of Network Rails

Journey supported by an Excellence Model

T Kersley*, A J Sharp
*Network Rail, UK, Tim.Kersley@networkrail.co.uk

AMCL,

UK, andrew.sharp@amcl.com

plans which used the intelligence gained from the assessments

to help set target trajectories for Asset Management maturity
and then to monitor progress in meeting those trajectories.
Over the period from 2006, Network Rails Asset
Management capability has improved continually and the
organisation gained certification to PAS 55 [1] as part of the
journey. The model used was the AMCL Asset Management
Excellence Model (AMEM) which has been developed
over a number of years and now contains numerous
international organisational assessments across the transport
and utilities sectors.

Keywords: Asset Management, Maturity Assessment, PAS

55, ISO 55001, Excellence Model.

Abstract
This paper will describe how Network Rail and the GB rail
regulator approach Asset Management maturity and how this
has been used to support improvement in Network Rails
Asset Management capabilities over the last nine years. It will
also define how both Network Rail and the Office of Rail
Regulation (ORR) intend to continue using Asset
Management maturity during the current five-year regulatory
Control Period 5 (CP5) to drive further Asset Management
improvements. The paper will underline the importance of
effective Asset Management to the global economy and
wellbeing, and demonstrate how the approach used within
Network Rail is aligned to the Institute of Asset
Managements (IAMs) latest work on Asset Management
maturity. It will also provide further context on Asset
Management capability benchmarks such as the Global
Forum for Maintenance and Asset Managements
(GFMAMs) 39 Subjects, PAS 55 and ISO 55001.

Looking forward, Network Rail will continue to use the Asset

Management maturity measures to support its benchmarking
activities and to formulate its improvement programmes; both
across the overall network and within each of the eight
devolved Route teams. The AMEM has also now been
adopted by Network Rail and the ORR as part of the formal
regulatory framework for the current CP5.
This paper will present all of these aspects as a coherent story
of Network Rails experiences in developing its Asset
Management capabilities. The diagram below shows the
spider chart output structure of the AMEM, and the last
three assessment scores for Network Rail against the End of
CP4 target established for April 2014. These assessments are
discussed further in the Case Study section of this paper.

1 Introduction
Network Rail seeks to develop excellent Asset Management
capability in the realisation of its key purpose to generate
outstanding value for taxpayers and customers. Network Rail
has set itself the goal of becoming a benchmark for others to
assess their Asset Management capability against by 2019.
The ORR has set regulated output targets for January 2018.
AMCL became the Independent Reporter for Asset
Management to the GB main line rail industry in 2005 and
has a duty of care to both the ORR and Network Rail under a
tri-partite agreement. As part of its Independent Reporter
role AMCL has undertaken a number of Asset Management
maturity assessments of Network Rail, the first being
undertaken in 2006 and the most recent assessment completed
at the end of Control Period 4 (CP4), in April 2014. The
assessments were used to support Network Rails
development of its improvements in Asset Management and
help justify the 28.5Bn CP4 and 37Bn CP5 determinations.

Figure 1: Network Rails Asset Management Capability.

During CP4 and CP5 Network Rail developed and

implemented structured Asset Management improvement

Asset Management can us help understand and reduce this

uncertainty, and so give us a better route to success.

2 Why is Asset Management important?

The world is facing a growing challenge with respect to the
ability of global society and indeed the planet itself to meet
the needs of an increasingly growing and demanding
population.
Meryl Lynch estimated that infrastructure
investment in the emerging economies would be $2.25 trillion
annually over three years from 2008 [2], and in the US the
ASCE reported that US infrastructure required investment of
$2.2 trillion in the five years from 2009, twice the expenditure
planned at the time [3]. These pressures have not subsided,
and the parlous condition of infrastructure in the US still
makes the headlines [4]. In Britain, a study by the Policy
Exchange in 2009 concluded that investment in Britains
infrastructure, which is amongst the oldest in the world,
needed to be 434bn by 2020 and that the 18% productivity
gap between Britain and France is in a large part due to
Britains ageing infrastructure [5].

3 What is Asset Management?

ISO 55000 defines Asset Management as the "coordinated
activity of an organization to realize value from assets" [7].
Simply put, Asset Management allows asset intensive
businesses to use limited resources to achieve their stated
business objectives in the most cost effective way. In the case
of Network Rail this means that the interventions undertaken
on its infrastructure are designed to accord with the safety,
performance and reliability requirements necessary to provide
train paths for use by passenger and freight operators.
Asset Management combines engineering and mathematical
analyses with sound business practice and economic theory.
The ISO 55000 definition leads to some key principles which
any Asset Steward should follow:
Decisions shall be clearly linked to the overall business
objectives;
Asset Stewards shall manage risks and not resources;
Decisions shall be analysed for whole systems and not
their parts;
Decisions shall be made from a whole-life perspective;
Asset Stewards shall leave assets in at least the same
state they inherited them;
Uncertainty shall be actively embraced and managed;
and
Stakeholders shall have a full understanding of the
choices available.

Add to these raw figures the growing concerns over the social
and environmental impact of infrastructure projects and
questions are bound to be asked about what we will hand over
to future generations. Forum for the Future, a UK based
sustainable development organisation, published its thoughts
in Rethinking Capital [6]. It concluded that falls in capital
markets, most notably during the recent economic crisis,
occur for a number of interlinked reasons:
Incentives are not aligned with the public good;
Critical goods and services are not valued or are
undervalued;
We lack imagination and awareness about new and
systematic risks;
Regulation is inadequate; and
Progress is based on unsustainable growth models
fuelled by credit.

Asset Stewards can begin to deliver Asset Management in

line with these principles by focusing their organizations on
the management of the asset lifecycle within the overall scope
of Asset Management, as shown in Figure 2 below.

Although Asset Management cannot answer these questions

directly, it can provide a long-term view, based on rational
and justified analysis, of the impact of decision-making on
complex infrastructure portfolios which can strongly support
the right decisions. The key decisions are:
How, where and in what to invest?
What risks need to be managed?
How to trade-off short and long-term costs and risks?
What demands must be served?
Where can costs be deferred or cut?
Can this be done without cuts in service levels?
All of these decisions, of course, have to be made in the face
of huge uncertainty. However, as the famous physicist
Richard P. Feynman once said:
In physics the truth is rarely perfectly clear, and that is
certainly universally the case in human affairs. Hence, what
is not surrounded by uncertainty cannot be the truth.

Figure 2: Making Asset Management the focus of an

organisations activities.

We must therefore not be put off making hard decisions

because they are uncertain. The processes that underpin good

in the most sustainable and economic way to deliver the

required outputs.

3 How can Asset Management be measured?

The development of an organisations capability in Asset
Management can be described in terms of developing
maturity, i.e. from initial awareness of the importance of
Asset Management processes (or Innocence), through to a
state where the organisations Asset Management processes
are appropriate, sufficient and capable of producing
consistently good performance (or Excellence). This is
summarised in Figure 3, which shows the impact of Asset
Management capability, or maturity, in the horizontal
dimension and the performance / outputs of an organisation in
the vertical dimension.

3 Foundations for Asset Management and the

Route to Excellence
BSI PAS 55 is the British Standards Institutions Publicly
Available Specification for the optimised management of
physical assets and infrastructure [1]. It provides clear
definitions and a requirements specification for whole life
Asset Management Systems that represent good practice.
Organizations that have adopted PAS 55 as the basis of their
approach to Asset Management report benefits which include
safer more reliable infrastructure, improved communications,
cost savings, and service level improvements.

Customers, individual managers and regulators typically

focus on the vertical axis of this matrix the output
performance of the organisation. Yet the ability of the
organisation to consistently deliver economic and sustainable
performance requires mature Asset Management capability in
parallel.

From 2004, when PAS 55 was first introduced, it gained

significant acceptance internationally as the de-facto
benchmark for competent Asset Management. In 2014 a new
ISO standard was launched called ISO 55001 [8] which was
developed using PAS 55 as the foundation document. ISO
55001 has had a rapid uptake amongst those already certified
to PAS 55, and amongst a new and eager international
community eager to exploit the benefits of good practice
Asset Management. ISO 55001 has two related standards,
ISO 55000 [7] and ISO 55002 [9] which provide an
introduction to Asset Management and guidance on the
interpretation of the requirements set out in ISO 55001. ISO
55000 contains the diagram reproduced in Figure 4.

Figure 3: Asset Management Capability versus Output

Performance.
An Under Performing organisation is likely to lack the
underlying capability to significantly improve consistently
poor output performance. A Promising organisation is also
likely to have consistently poor performance, but has at least
recognised the need to develop process maturity, noting that
there can be a significant lag between improvements in Asset
Management decision-making and this being reflected in the
outputs of an organisation.

Figure 4: Asset Management and the Asset Management

System (Source ISO 55000:2014)
Figure 4 underlines a critical concept for the achievement of
excellence in Asset Management, which is the difference
between having an Asset Management System in place, and
being able to continually improve that Asset Management
System in an informed and focused way to achieve the best
appropriate practice for your particular organisation within
its particular context. Such capability is generally considered
to be excellent - in terms of Asset Management maturity
and reflects an ability to optimally tailor and continually
demonstrate that your organisation is able to realise value

Organisations that have a wide variability in their

performance (i.e. sometimes achieving the desired
performance, but not being able to maintain it) will typically
have a focus on outputs, but a low level of underlying Asset
Management capability. This is usually the result of
transitory efforts to address the latest problem but often not

from its assets. This requires organisational self-awareness

and a willingness to benchmark against the best in class.
The IAMs Asset Management Maturity Group has recently
developed a framework representing the total journey an
organisation would take to excellence in Asset Management,
via compliance to PAS 55 or ISO 55001, and onwards to
context specific excellence. This is summarised in Figure 5.
This bow-tie recognises that organisations begin
implementing Asset Management through a process of
alignment and integration which converges to a level of
competence that is consistent across industries and sectors
(and is independently certifiable as good practice).
The right hand part of the bow-tie identifies that organisations
diverge in defining their optimal target levels for best
appropriate practice within their specific context, with
different degrees of worthwhile sophistication and
optimisation, and context-specific definitions of what
comprises excellent Asset Management.

Figure 6: The Asset Management Capability Maturity Scale

3 Case Study
Network Rail and AMCL have been working since 2006
within the tri-partite arrangement described earlier on
defining and measuring Network Rails Asset Management
improvements. AMCL has operated in the role of
Independent Reporter (Asset Management) to the Office of
Rail Regulation (ORR) the economic and safety regulator
for the GB rail industry and Network Rail throughout this
period.
The key objectives of the Independent Reporter role include
providing a level of confidence and assurance to the ORR that
Network Rail is operating robust, sustainable and efficient
Asset Management processes and providing best appropriate
practice guidance to Network Rail in the continual
improvement of its Asset Management capability.

Figure 5: The IAMs Asset Management Maturity Framework

Based on this we can define ISO 55001 compliance against a

qualitative maturity sale, as shown in Figure 6. Maturity
beyond ISO 55001 compliance then becomes the areas
where organisations choose to excel, based on clear costbenefit justifications and driven by their business
requirements. Asset Management excellence can then be
defined as the cutting-edge of development in any particular
area. Figure 6 is therefore a detailed representation of the
horizontal axis introduced in Figure 3.

This relationship has allowed Network Rail to develop

prioritised improvement programmes. To date these have had
a particular focus on the business planning processes that
underpin Network Rails long term strategic business plan
and associated funding requirements and justification. The
original appointment of AMCL in 2005 was the first time in
GB rail regulation that an Independent Reporter had been
appointed specifically to look at Asset Management, and it
was important to ensure that there was a common
understanding of Network Rails Asset Management
capability. It was therefore agreed between the parties that an
assessment of the maturity of Network Rails capability in
Asset Management should be undertaken using an appropriate
Asset Management maturity model. This assessment would
also then provide a useful baseline for identifying and
tracking any future improvements.

One of the co-authors of this paper works for Asset

Management Consulting Limited (AMCL), which uses the
AMCL Asset Management Excellence Model, or AMEM,
to assess the Asset Management capability of organisations
and to help them establish and refine Asset Management
improvement programmes based on the findings. More
latterly, as PAS 55 and ISO 55001 have become an important
and recognised stepping-stone in the development of Asset
Management capability maturity, AMCL has also assessed
and certificated organisations against the requirements of the
relevant specification or standard using the AMEM.

The objective of the initial 2006 assessment, referred to

earlier, was therefore to determine the maturity of Network
Rails Asset Management capability, using contemporary best

practice as a framework, and to subsequently allow the ORR

and Network Rail to identify and agree improvements to this
capability that were both challenging yet realistic. AMCLs
AMEM was the maturity model used to achieve this. Figure
7, below, illustrates the relationships between the 23 activities
assessed using the AMEM at the time of the initial
assessment, and their alignment with the six general
groupings established by international best practice (see
Figure 2).

The overall outcome (i.e. the overall Asset Management

maturity score across the six-groups of the AMEM model
see Figure 7) for Network Rail was tracked against a
trajectory, based on AMCLs Roadmap and jointly agreed by
the Boards of ORR and Network Rail, as shown in Figure 8.

Figure 8: Network Rails performance through CP4

The assessment process needed to be objective, accurate and
evidence-based to assure consistent and comparable refection
of the maturity of Network Rails Asset Management
capabilities throughout the Control Period. The approach
utilised ensured that all AMEM activities were appropriately
assessed on a statistically relevant basis, both via documented
interview and review of relevant supporting evidence
(documentation, process, data, etc.). The level of existence,
completeness, effectiveness and integration of relevant
processes within each AMEM activity was assessed. The
level of maturity for each activity was determined and
justified against documented criteria through the evidence
trail. Leading internal practices and areas of opportunity were
identified and documented to ensure all parties had clear
indications of where improvements could be made both in the
short and longer-term.

Figure 7: AMCL Asset Management Excellence Model

The 2006 assessment was undertaken to establish an initial
baseline. This was followed-up again in 2009 to review
progress and help shape subsequent improvements. The
original 2006 work involved an initial high-level assessment
with a senior group of Network Rail managers acting as a
proxy for Network Rail as a whole. The output from this
high-level assessment was then used to help guide and
prioritise a detailed and fully evidenced subsequent
assessment. The outputs of the fully evidenced assessment
included a report and a set of detailed recommendations
which were converted into a prioritised and sequenced Asset
Management Vision for Network Rail. Progress against the
Asset Management Vision was assessed by the 2009 followup and the findings used to refine and update the Asset
Management Vision into a comprehensive Asset Management
Roadmap which considered best appropriate practice,
organisational context, timescales and constraints. In turn,
Network Rail developed a detailed Asset Management
Improvement Programme (AMIP) to deliver the Roadmap.

Armed with a clear view of improvement opportunities,

Network Rail was able to focus on the areas that were of most
importance to its particular context that of a monopoly
supplier to the UK main line rail industry with a responsibility
to be able to justify 37bn of expenditure during CP5.
A key area of review in relation to justification of funding
were the requirements of the Strategy & Planning and
Whole Life Cost Justification groups, as shown in Figure 7.
In particular, the further development of Network Rails
Asset Policies and how these are utilised within a strategic
planning framework were identified as central to the
development of many areas of its Asset Management
capability. The purpose of the Asset Policies is to provide upfront analysis on the most appropriate renewal, maintenance,
operating and disposal regimes for each asset discipline
Track, Signalling, etc. on a whole-life cost basis, that
reflects the organisational objectives and the characteristics
and requirements for the different types of rail route types
found across the GB rail network. These policies are
underpinned by justification documents that contain the

The AMIP set Network Rails priorities for Control Period 4

(CP4) which ran from 2009 until 2014. Three additional
AMEM assessments were scheduled to coincide with key
milestones during the Control Period:
1. The publication of the Initial Industry Plan (IIP) in
2011, which included Network Rails first draft of
spending plans and justification for CP5;
2. The publication of the Strategic Business Plan (SBP)
in early 2013 upon which the ORR would evaluate
and agree the CP5 funding settlement; and
3. The end of CP4 / start of CP5 in early 2014.

lifecycle cost studies to justify the chosen policies, to a level

proportional to the criticality of the different asset groups.
They then provide the assumptions for both overall strategic
planning activities, and the definition of the appropriate Asset
Management activities and interventions to be undertaken on
Network Rails national asset base, depending on the costs,
risks and current and anticipated performance associated with
each asset.

commentary of strong progress made, whilst highlighting

gaps or issues that need addressing This understanding has
been used by both the ORR and Network Rail to review
existing Asset Management improvement projects, better
justify that expenditure plans are robust, sustainable and
efficient and to establish clear, quantified and continually
challenging but realistic targets for improvements in Asset
Management capability. A critical foundation for achieving
economic and sustainable output performance.

Network Rails performance in the area of Strategic Planning

from 2006 to 2014 can be seen in Figure 9. This shows the
rapid improvement in this capability, in line with the
established Roadmap and subsequent AMIP, between the IIP
(2011) and SBP (2013) assessments.

Acknowledgements
The authors would like to thank the IAM and Network Rail
for various permissions.

This rate of improvement reflects a focused and concerted

effort by Network Rail to refine and embed its Strategic
Planning Framework. This consists of the Asset Policies, an
associated suite of tiered portfolio, strategic and asset-level
whole-life cost models and detailed asset information and
knowledge of the asset base at a local level. The Strategic
Planning Framework is, in turn, embedded in an
organisational structure and process which enables the
bottom-up validation of top-down work volumes and costs to
reach a fully justifiable conclusion.

References
[1] British
Standards
Institute.
PAS
55-1:2008
Specification for the optimized management of physical
assets, (2008).
[2] Meryl Lynch & Co Inc. The $2 Trillion EM
Infrastructure Theme, (2008).
[3] American Society of Civil Engineers. Report Card for
Americas Infrastructure, (2009).
[4] Robert Wright. US Infrastructure: Broken System,
The Financial Times, April 28, (2014).
[5] Policy Exchange. Delivering
Infrastructure for Britain, (2009).

21st

Century

[6] Forum for the Future. Rethinking Capital, the larger

lessons of the financial crisis, (2009).
[7] International Standards Organisation. ISO 55000:2014
Asset Management Overview, principles and
terminology, p14, (2014).
[8] International Standards Organisation. ISO 55001:2014
Asset management Management systems
Requirements, (2014).
[9] International Standards Organisation. ISO 55002:2014
Asset management management systems
Guidelines for the application of ISO 55001, (2014).

Because of the Asset Management maturity established

within Network Rail, each of the elements described above
are also subject to a demonstrable continuous improvement
plan-do-check-act cycle which includes review of targets with
internal functions and engagement of an array of stakeholder
views including that of the regulator, ORR.

4 Conclusion
In conclusion, the use of a consistent and repeatable Asset
Management maturity assessment methodology has helped to
create a common understanding between Network Rail and
the ORR of the growing maturity of the organisations Asset
Management capability. The deployment of this tool by an
independent expert (AMCL), has been an essential element to
ensure the approach is objective and provides a balanced