**3. IAM as an integrated approach**

**•** Promoting adequate levels of service and strengthening long-term service reliability;

**•** Managing service risk, taking into account users' needs and risk acceptance;

**•** Improving investment and operational efficiency in the organization;

**•** Extending service life of existing assets instead of building new, when feasible;

**•** Justifying investment priorities in a clear, straightforward and accountable manner.

Given its origin in the financial sector, where the economic approach is prevalent, the first significant developments in the field of infrastructure asset management were led by ac‐ countants and economists. In the late 1980s, the South Australia Public Accountants Com‐ mittee published a series of eight reports alerting all Australian governments for the need to seriously consider the management of their infrastructure if deterioration of valuable public services were to be avoided (Burns *et al*., 1999). Following these reports, Prof. Penny Burns, at the University of Adelaide (Australia), played an crucial role in bringing to attention the importance of the subject and formalizing key concepts and principles (e.g., Burns, 1990; Burns *et al*., 1999). Australian leadership in this field endures to the present day, through both industry practice and initiatives by organizations such as the Institute of Public Works Engineering Australia (IPWEA, www.ipea.org.au), the National Asset Management Steering Group (NAMS, www.nams.au.com), the Australian National Audit Office (ANAO, www.anao.gov.au), the Asset Management Quarterly International (AMQI, www.am‐ qi.com), ACORN Inc. (www.acorninc.org) and the Water Services Association Australia

The Australian and New Zealand AM school is synthesized in the International Infrastruc‐ ture Management Manual, revised and updated periodically (current edition: IIMM, 2011), which addresses different types of public infrastructures and promotes the Total Asset Man‐

IAM has equally seen significant advances in many other countries, such as in the US (e.g. Clark *et al*. 2010; US EPA, 2012), the UK (e.g. IAM/BSI, 2008; UKWIR, 2003) and Portugal (Alegre and Covas, 2010; Coelho and Vitorino, 2011; Alegre *et al*., 2011). From a practical standpoint, very good examples of leading-edge utility practice can be found in Asia (e.g., Singapore PUB), and in Central and Northern Europe, such as in the Netherlands (e.g. PWN - North Holland), Germany (e.g. Munich, Berlin), Norway (e.g. Oslo) or Sweden (e.g. Stock‐

IAM has also registered scientific developments, particularly with regard to algorithms and tools aiming at supporting pipe rehabilitation prioritization and decision-making. Whole-life costing (e.g. Skipworth *et al*., 2002), as well as life time assessment and failure forecasting, are

**•** Improving the sustainable use of water and energy;

50 Water Supply System Analysis - Selected Topics

**•** Upholding and phasing in climate change adaptations;

**2. Overview of current knowledge and practice**

(WSAA, www.wsaa.asn.au).

agement Process.

holm, Malmo).

To avoid the shortcomings inherent to these partial views, integrated IAM approaches are required, driven by the need to provide adequate levels of service and a sustainable service in the long-term.

Integrated IAM may be implemented in many different forms. Even for a specific utility and a given external context, different approaches may be successfully implemented. However, there are some basic principles commonly accepted in the current leading literature, practice and standardization (Hughes, 2002; INGENIUM and IPWEA, 2011; Sægrov ed., 2005; Sæ‐ grov ed., 2006; Sneesby, 2010).

An integrated methodology is presented that approaches IAM as a management process, based on PDCA principles and requiring full alignment between the strategic objectives and targets, and the actual priorities and actions implemented, embedding the key requirements of the forthcoming ISO 55000/55001/55002 standards on asset management (ISO, 2012a, 2012b, 2012c). The approach expressly takes into account that a networked infrastructure cannot be dealt with in the same way as other collections of physical assets: it has a domi‐ nant system behavior (i.e., individual assets are not independent from one another), and as a whole it does not have a finite life – it cannot be replaced in its entirety, only piecemeal (Burns *et al*., 1999). The methodology allows for the assessment and comparison of interven‐ tion alternatives from the performance, cost and risk perspectives over the analysis hori‐ zon(s), taking into account the objectives and targets defined (Alegre and Covas, 2010; Almeida and Cardoso, 2010). In summary, the objective of an integrated approach is to as‐ sist water utilities in answering the following questions:

At each level of management and planning – strategic, tactical and operational – a struc‐ tured loop (Fig. 2) comprises the following stages: (i) definition of objectives and targets; (ii) diagnosis; (iii) plan production, including the identification, comparison and selection of al‐ ternative solutions; (iv) plan implementation; and (v) monitoring and review. Most utilities already have several elements of this process in place. What is often missing is a review mechanism – a way to measure compliance with set goals – as well as an effective alignment

Infrastructure Asset Management of Urban Water Systems

http://dx.doi.org/10.5772/52377

53

Setting up objectives, assessment criteria, metrics and targets is a crucial stage in order to set up clear directions of action, as well as accountability of results through timely review, with‐ in a given time frame (short, medium or long-term) (ISO 24510:2007, 24511:2007, 24512:2007). These metrics and targets are an essential basis for establishing the diagnosis,

The process cascades through the decisional levels within the organization's management structure. The global approach is based on plan-do-check-act (PDCA) principles aiming at the continuous improvement of the IAM process. The key notions in this process are align‐ ment among the decisional levels and their actors; bottom-up feedback; and involvement and empowerment of the entire organization, from the CEO to the asset operators, in order to promote leadership, co-ordination, collaboration, corporate culture acceptance, motiva‐

**4. From whole-life costing to long-term analysis of indefinite life systems**

Comparing intervention alternatives from the financial stand point requires that all relevant costs and revenues incurred during the asset life be taken into account. The costs in particu‐ lar include such items as design and building costs, operating costs, maintenance costs, asso‐ ciated financing costs, depreciation, and disposal costs. Most of the reference literature on asset management recommends a whole-life costing approach (also known as life-cycle ap‐

between the different management levels.

**Figure 2.** The planning process at each planning level

tion, commitment and corporate know-how.

prioritizing intervention solutions and monitoring the results.


The cube shown in Fig. 1 symbolizes an integrated IAM approach. It advocates that IAM must be addressed at different planning decisional levels: a strategic level, driven by corporate and long-term views and aimed at establishing and communicating strategic priorities to staff and citizens; a tactical level, where the intermediate managers in charge of the infrastructures need to select what the best medium-term intervention solutions are; and an operational level, where the short-term actions are planned and implemented. It also draws attention to the need for standardized procedures to assess intervention alternatives in terms of performance, risk and cost, over the analysis period. The other relevant message is that IAM requires three main pillars of competence: business management, engineering and information.

**Figure 1.** General IAM approach

At each level of management and planning – strategic, tactical and operational – a struc‐ tured loop (Fig. 2) comprises the following stages: (i) definition of objectives and targets; (ii) diagnosis; (iii) plan production, including the identification, comparison and selection of al‐ ternative solutions; (iv) plan implementation; and (v) monitoring and review. Most utilities already have several elements of this process in place. What is often missing is a review mechanism – a way to measure compliance with set goals – as well as an effective alignment between the different management levels.

**Figure 2.** The planning process at each planning level

tion alternatives from the performance, cost and risk perspectives over the analysis hori‐ zon(s), taking into account the objectives and targets defined (Alegre and Covas, 2010; Almeida and Cardoso, 2010). In summary, the objective of an integrated approach is to as‐

The cube shown in Fig. 1 symbolizes an integrated IAM approach. It advocates that IAM must be addressed at different planning decisional levels: a strategic level, driven by corporate and long-term views and aimed at establishing and communicating strategic priorities to staff and citizens; a tactical level, where the intermediate managers in charge of the infrastructures need to select what the best medium-term intervention solutions are; and an operational level, where the short-term actions are planned and implemented. It also draws attention to the need for standardized procedures to assess intervention alternatives in terms of performance, risk and cost, over the analysis period. The other relevant message is that IAM requires three main

Operational level

Management

Engineering

Information

Tactical level

Planning and decision levels

Strategic level

pillars of competence: business management, engineering and information.

sist water utilities in answering the following questions:

**•** What do we own in terms of infrastructures?

**•** Where do we want to be in the long-term?

**•** How do we get there?

52 Water Supply System Analysis - Selected Topics

Alegre (2006, 2009)

**Figure 1.** General IAM approach

Dimensions of analysis

**•** Who are we at present, and what service do we deliver?

Setting up objectives, assessment criteria, metrics and targets is a crucial stage in order to set up clear directions of action, as well as accountability of results through timely review, with‐ in a given time frame (short, medium or long-term) (ISO 24510:2007, 24511:2007, 24512:2007). These metrics and targets are an essential basis for establishing the diagnosis, prioritizing intervention solutions and monitoring the results.

The process cascades through the decisional levels within the organization's management structure. The global approach is based on plan-do-check-act (PDCA) principles aiming at the continuous improvement of the IAM process. The key notions in this process are align‐ ment among the decisional levels and their actors; bottom-up feedback; and involvement and empowerment of the entire organization, from the CEO to the asset operators, in order to promote leadership, co-ordination, collaboration, corporate culture acceptance, motiva‐ tion, commitment and corporate know-how.
