IPMA International Project Management Association
9 August 2018 / 9:56

The interrelations between asset and project management

hrough a series of blogpost articles I´d like to highlight the interrelations of project management with other disciplines. This time my focus is on asset management. According to ISO 55000 [https://en.wikipedia.org/wiki/ISO_55000], assets are an item, thing or entity that has potential or actual value to an organization… Value can be tangible or intangible, financial or non-financial, and includes consideration of risks and liabilities… Physical assets usually refer to equipment, inventory and properties owned by the organization. Physical assets are the opposite of intangible assets, which are non-physical assets such as leases, brands, digital assets, use rights, licences, intellectual property rights, reputation or agreements.” Assets may be bundled to an asset portfolio, which might encompass multiple sub portfolios.

For example, an energy provider may have an asset portfolio of all assets related to provision of renewable energy. This portfolio may be subdivided into a sub portfolio of wind, hydro, solar and other energy assets. Or it may be subdivided into a portfolio of asset acquisition, asset development, asset operations and asset improvement in the area of renewables. Asset management will take care for developing an asset strategy derived from the organisation´s overall strategy. It will develop future scenarios for the organisation´s renewable energy assets, derive a roadmap of activities (projects) and establish a set of KPIs for asset planning, monitoring and controlling.

Obviously, all this is a prerequisite for project, programme and portfolio management. Asset portfolio considerations are the basis for project portfolio management. Questions such as: “Which assets are to be build next year? Do we have enough resources to perform the asset development projects in time, quality and budget? What are the priorities for the multiple projects to be performed in a sub or a portfolio? How do we balance the available financial and human resources between the asset respective project portfolios?”

Both disciplines are heavily interrelated. Asset portfolio planning is impossible without the planning information from projects, programmes and project portfolio. Based on project information, the project portfolio manager may perform scenario analysis, showing the development paths of all projects based on their interdependencies and schedules. Asset management is impossible to do without the project management and vice versa. Therefore, project, programme and portfolio managers in organizations with a strong focus on assets should familiarize themselves with asset management and start aligning their activities with the asset management system.

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Reinhard Wagner

Author of this post

Reinhard Wagner has been active for more than 30 years in the field of project- related leadership, in such diverse sectors as Air Defense, Automotive Engineering, and Machinery, as well as various not-for-profit organizations. As a Certified Projects Director (IPMA Level A), he has proven experience in managing projects, programmes and project portfolios in complex and dynamic contexts. He is also an IPMA Certified Programme and Portfolio Management Consultant, and as such supports senior executives in developing and improving their organizational competence in managing projects. For more than 15 years, he has been actively involved in the development of project, programme and portfolio management standards, for example as Convenor of the ISO 21500 “Guidance on Project Management” and the ISO 21503 “Guidance on Programme Management”. Reinhard Wagner is Past President of IPMA and Chairman of the Council, Honorary Chairman of GPM (the German Project Management Association), as well as Managing Director of Tiba Managementberatung GmbH.