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Likelihood of failure should be based on consideration of the four possible failure modes: mortality, efficiency, level of service, and capacity. For example, a mortality failure is one in which the asset is physically incapable of performing its function, such as a sewer main collapse. The consequences of this might produce multiple impacts, depending on the situation. If raw sewage reaches a waterway or a nearby waterbody, it could impact public health. If it runs under a street, the failure could cause traffic delays. Economic consequences could follow seepage into water or buildings. An efficiency failure results when there are more cost-effective and feasible alternatives, such as opting for inefficient equipment motors with high energy costs. In this case, the consequence is generally economic. Level-of-service issues related to an asset failure, as compared to an enterprise-wide level of service, could include a pump that cannot achieve the required wastewater flow during peak demand times. The consequence of failure could be sewer overflows that result in fines and negative environmental impacts. Capacity failure could include a pump that cannot provide adequate water supply during peak periods, resulting in reduced revenue. 5. Develop a prioritized plan. Fundamentally, asset management is about change management. Change management takes time. Therefore, it makes sense to develop a prioritized plan so that staff has the opportunity to do their "day job" and still participate meaningfully in the development of the asset management program. It's important to adapt practices to fit within one's own utility — again, that takes time. Most utilities take between three to five years to make significant progress with the development of their asset management program. Whether you use the U.S. EPA 10-step process or the newly adopted ISO 55000 standard, the core concepts of managed risk, planned service levels, and life-cycle cost are still important components. 6. Create a holistic, connected picture of operations and capital needs. One of the more significant insights that asset management creates is the need to manage the life-cycle cost of assets — from planning, design, and construction through the often long operational cycle. A capital investment today can be a decision that a utility lives with for a long time. So practices that connect the two, even if they reside in separate budgets, will yield benefits down the road. Simply put, a cheap capital investment today can be a high operating expense through a lot of tomorrows. 7. Implement the plan and measure results. As the old saying goes, "You can't manage what you don't measure." Some key performance indicators really help gauge progress or make visible how changes are driving performance improvements. For instance, the percentage of planned maintenance work orders completed compared with the ones scheduled for critical valves and pumps can be a leading indicator of whether there might be issues with achieving a level of service of 100 percent of customers with no water outages of greater than two hours. It's important to track progress and trends to know what areas need to be improved and which ones can wait. Managed Risk And The Reward At its core, asset management can be seen as a matter of managed risk, no matter what the asset is. Utility managers who do the hard work of advancing the level of practice of asset management will ultimately leave their utility more sustainable for the future. For example, in a project managed by the Water Environment Research Foundation 1 , the authors found that best practice utilities routinely (at least annually) sought to identify the "big picture" risks to the operations. They developed a risk register and discussed these risks with their elected and appointed officials, then senior leadership developed plans to manage these risks. The risks that they considered were broad, from natural disaster risks, such as flooding and earthquakes, to man-made risks, such as labor issues, healthcare costs, or the impact of a disgruntled employee who wants to sabotage control systems. In the end, once started, asset management quickly brings benefits that become essential. It improves financial performance, efficiency, and effectiveness; manages risk; informs asset investment decisions; and improves reputation, compliance, and sustainability. n References 1. "Leading Practices For Strategic Asset Management," by Linda Blankenship, Frank Godin, Terry Brueck, EMA, Inc. Published by the Water Environment Research Foundation. 2012. wateronline.com n Water Innovations ASSETMANAGEMENT Linda Blankenship is Associate Vice President with ARCADIS US, Inc. She was the principal investigator and program manager for the WERF research challenge "Strategic Asset Management Implementation and Communication," developing leading practices, tools, and guidance. Linda has more than 25 years of experience working on a wide variety of drinking water, wastewater, groundwater, and stormwater issues, holding senior positions while managing major infrastructure planning in local government as well as managing regulatory affairs, technical programs, and research support in major water industry associations. About The Author Like many top municipalities, the City of San Diego, CA, which operates the Alvarado Water Treatment Plant (pictured), relies on asset management to inform decision-making. 29