Improving asset management for utilities by enhancing processes for risk-based capital decisions that align with client goals

Asset Management Assessment and Risk-Based Capital Prioritization Framework

In today’s evolving business climate, utilities are faced with shifting priorities when it comes to investing in the needs of their assets. Knowing how to improve capital decisions to perform critical work on these assets at the right time is crucial. Our utility client’s Asset Management (AM) planning group wanted to improve their existing processes, data, and tools, using a risk-based approach to help them prioritize capital work. They engaged us to help with this continuous improvement initiative—that was driven by a shift in the utility regulator’s view of justifying capital work, the need for internal knowledge transfer among expert planners, and leveraging planned technology upgrades.  

To identify goals for the utility that supports the client’s long-term objective to make data-driven capital decisions, we performed our work in three phases—identifying objectives, assessing the current state of the utility, and defining the future state, informed by results of an industry scan and insights from subject matter experts. Our team performed a gap analysis to identify incremental initiatives that would guide the client towards a future state with a vision for a systematic, risk-based approach that supports a capital prioritization framework. Key to this analysis, we considered the ripple effects that AM planning changes could have on other business groups within the organization, such as wildfire risk management, IT, and field operations. Collaboration was critical to the success of this project, and we held several workshops with the client to understand their current and desired future state.

This analysis lays the groundwork for the client to make strategic decisions based on a risk-based prioritization methodology. With their organization’s strategic goals tied to the utility future state and guidance supporting both implementation and sustainment, the client can work toward achieving the broader 2035 goals of their industry.