Water Design-Build Council Blog

New Study Demonstrates A Positive Future For Asset Management Adoption In The Water Sector

Posted by Admin on Wed, Mar 20, 2013 @ 09:47 AM

By Harvey M. Bernstein, Vice President, Industry Insights and Alliances, McGraw-Hill Construction and Donna Laquidara-Carr, Manager, Industry Insights and Research Communications, McGraw-Hill Construction

Utility Management Conference attendees are invited to join CH2M HILL and McGraw-Hill Construction for breakfast on March 12, 7 a.m. – 8:15 a.m. in Solana FG at the Renaissance Glendale Hotel to be among the first to hear more about the results of the study from Mr. Bernstein and Scott Haskins, CH2M HILL director, Management and Strategic Consulting.

The sequester cuts in Washington are a grim reminder of the funding challenges faced in the water sector. While water utilities must deal with many challenges, including aging infrastructure, increased water scarcity and meeting strict environmental regulations, there is little hope for increased funding in the near future. Utilities must find strategies to use the resources they have more effectively.

Asset Management Report CoverResults of a new McGraw-Hill Construction/CH2M HILL study, reflecting the responses of 451 utilities in the U.S. and Canada, demonstrate that asset management offers one way to help deal with these challenges by helping utilities make smarter decisions— both for investments in new assets and in the operations and maintenance of existing ones.

The study took a unique approach: instead of relying on a utility’s self-definition of an asset management practice, it asked respondents to indicate which of 14 asset management practices included in the survey that they have adopted. Those doing four practices or more were identified as asset management practitioners. Sixty-five percent of the respondents are asset management practitioners based on that standard. However, 43 percent of practitioners are doing only four to six practices, demonstrating that there is strong opportunity for wider adoption of asset management in the industry.

The analysis of the research published in the Water Infrastructure Asset Management SmartMarket Reportdemonstrates that the industry has recognized the value of asset management and has robust plans for adopting further practices in the next five years. Perhaps the most telling is the plan to adopt an asset management policy. 46% of current asset management practitioners report having a policy in place now, but that is expected to grow to 84 percent by 2017, and for non-practitioners, the growth is equally significant, from 5 percent to 59 percent. This finding reveals that the industry is becoming more committed to taking a holistic asset management approach in the future.

Contributing to this high level of adoption are the benefits experienced by those using asset management. Eighty percent report that they have an improved ability to explain and defend budgets to governing bodies because of their use of asset management practices, and 67 percent find that asset management helps them focus on priorities. Combined together, this means that most practitioners find that they can better determine where they need to invest in their assets and more easily persuade stakeholders to fund those investments by having strong data to back up their requests.

In addition, a much higher percentage of practitioners doing 10 or more practices report achieving the other benefits of asset management adoption than those doing fewer practices. For example, 65 percent of high-level practitioners report that they have a better understanding of risks and consequences of alternative investment decisions due to their use of asset management, versus just 34 percent of those doing four to six practices. Clearly, a broader, holistic approach to asset management provides greater opportunities to reap the rewards.

As the industry continues to be driven by the need to replace, upgrade or expand infrastructure—selected by the highest percentage (39 percent) of survey respondents as the single most important factor encouraging adoption of an asset management approach—the survey results reveal that the investment in asset management practices can help address some of the severe challenges the industry faces.

We invite you to download a free copy of the Water Infrastructure Asset Management SmartMarket Report for the complete study results and analysis, exploring the most effective practices, critical triggers and obstacles and the impact of asset management adoption on how utilities make decisions about their investments in their assets.

Harvey Bernstein, vice president of Industry Insights and Alliances with McGraw-Hill ConstructionHarvey Bernstein, F.ASCE, LEED AP is Vice President of Industry Insights & Alliances, leading McGraw-Hill Construction’s (MHC’s) thought leadership, market research and green building initiatives. He was responsible for launching MHC’s successful SmartMarket Report series tracking future industry trends and speaks and writes on such topics as: construction workforce, green building, prefabrication and modularization, BIM, public-private partnerships, water efficiency, retrofit market, renewable energy, innovation and global markets. Previously, Bernstein served as President and CEO of the Civil Engineering Research Foundation.

Donna Laquidara-Carr, Manager, Industry Insights and Research Communications, McGraw-Hill ConstructionDonna Laquidara-Carr, Ph.D., LEED AP has over 20 years of experience in construction news and analysis. She is currently the Manager of Industry Insights and Communications at McGraw Hill Construction, where, since 2008, she has provided editorial direction to the SmartMarket Reports. Recent reports on which she was managing editor include The Business Value of BIM in North America, Construction Industry Workforce Shortages: Role of Certification, Training and Green Jobs in Fill the Gaps and Mitigation of Risk in Construction SmartMarket Reports. Donna has her Ph.D. from Tulane University, M.A. from Boston University and B.A. from Middlebury College.

This article has been republished with permission by CH2M Hill. To view the original article, visit CH2M Hill's blog here

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