Establish Business-Sponsored Utility Asset Management KPIs

Build clarity to guide planning and implementation.

Analyst Perspective

Development of value-driven KPIs to improve overall maturity.

Utility asset management is a fundamental capability that is critical in enabling and supporting the mission of utilities: delivering reliable essential services to customers and communities. In the era of digital transformation, utilities continue striving to improve their asset management practices and achieve greater maturity. Business leaders often turn to asset management systems to enhance existing practices and mitigate risks.

However, the challenge is that the linkage between strategic goals and tactical implementation is often missing. Without a well-defined set of strategic KPIs, it becomes difficult to guide the implementation of technologies to ensure that decisions align with desired business outcomes. Equally important is the enablement of people, process, and technology to empower utilities to achieve their targeted strategic KPIs.

The purpose of this research is to present a KPI framework to assist utilities leaders to establish a strong connection between strategic goals and tactical implementations of people, process, and technology to improve overall asset management maturity.

Jing Wu Principal Research Director Utilities, Industry Practice Info-Tech Research Group

Executive Summary

Your Challenge

Utility asset management has become increasingly complicated due to the complexity of asset mix and external challenges such as extreme weather patterns.

Low digital maturity and asset information silos negatively impact asset management maturity.

Your organization over-relies on technology investment without commitment to improving process and empowering employees.

Common Obstacles

Your organization does not have a comprehensive enterprise asset management strategy.

Business stakeholders have not taken on the accountabilities of product and data ownership of asset information systems.

IT leaders lack framework to engage business stakeholders to guide asset management systems planning and implementation.

Info-Tech’s Approach

Leverage Info-Tech’s Utility Asset Management KPI Analysis Tool to engage your key stakeholders.

Kick-start your development of executive-sponsored and value-driven KPIs with Info-Tech’s prepopulated sample data.

Establish the key enablers of people, process, and technology to achieve targeted strategic KPIs.

Info-Tech Insight

Utilities leaders must work together to establish crucial KPIs to guide the tactical implementation of asset management initiatives. Without these KPIs, there is a risk of overreliance on technology investments without adopting a holistic approach to enhancing overall maturity levels.

Utility asset management is under pressure

Essential services are at risk of becoming unreliable.

Complexity grows in utility asset mix

• Aging Infrastructure
  The current utility infrastructure is aging, and the demand on maintenance has increased significantly. Three-quarters of more than 200 US water industry stakeholders ranked aging infrastructure as the most pressing challenge facing the industry. (Source: Black & Veatch, 2021)
• Increased Asset Volume
  Growth in the infrastructure investment has broadened the service territory and increased the volume of assets to operate and maintain. In 2021, Duke Energy, one of the largest utilities in US, generated about 23% more total assets than in 2017. (Source: Statista, 2022)
• Diverse Asset Types
  The rapid expansion of digital assets and renewable assets require different asset maintenance programs, of which the best practices are still developing. Renewable energy contributed more than a quarter of electricity generation in Australia in 2020, which is double that than in 2014. (Source: Clean Energy Council, 2021)

Volatility increases due to disruptors

• Workforce Skill Gap
  The retiring utility workforce in the next decade will create a mass loss of critical operational knowledge. Utilities are facing challenges to attract and retain a younger generation.
• Increased Security Threats
  The proliferation of digital assets and increased connectivity have expanded the potential attack surfaces. Greater security risks can result in severe damage to assets and major disruptions to services.
• Changing Regulations
  The evolving regulations related to critical infrastructure, ESG, and AI require utilities to adapt their asset management practices to comply with new standards.
• Severe Weather Events
  The unpredictable and abnormal extreme weather events pose significant threat to the reliability of asset operations. Utilities need proactive and adaptable maintenance programs to mitigate risks.

(Source: Deloitte, 2021; Utility Analytics Institute, 2023)

Adopt a holistic asset management practice

Bolster organizations’ capabilities in safeguarding reliable essential services.

An integrated and sustainable asset management practice has to lead from a corporate strategy and integrate with various levels of tactical operations including people, process, and technology. IT must demonstrate thought leadership to collaborate and influence business stakeholders to enforce this concept while leading the development of asset information and technology advancement.

• Asset Management

  Coordinated activity to realize value from assets

• Asset Management System

  Interacting elements to establish policy, objective, and process

• Asset Portfolio

  Assets in scope within the system

Comprehensive Scope of Asset Management

• Strategy & Planning
  Policy, Strategy, Objective, Planning
• Organization & People
  Leadership, Org. Structure, Culture, Competency
• Decision-Making
  Capital Investment, O&M Investment, Resourcing, Lifecycle Value Realization
• Risk & Review
  Risk Assessment, Resilience Analysis, Performance, Monitoring, Audit & Assurance
• Life Cycle Delivery
  Acquisition, Operation, Maintenance, Disposition
• Asset Information
  Information Strategy, Standards, Systems, Data

(Adapted from The Institute of Asset Management, 2015.)