What Is ISO 55001? What Are Its Key Implementation Steps And Benefits

 Assets whether small or big are an integral part of any organization. In simple words, assets can be tangible or intangible and include everything from IT components, property, inventory, and intellectual property, owned or leased by a company to operate. The assets have a great potential to add value to any business.

ISO 55001- Asset Management System (AMS)

It is important to manage assets effectively and ISO 55001 is capable of that. ISO 55001 is the international standard that helps organisations effectively manage their assets to optimize their lifetime value. ISO 55001 is especially crucial in industries that are capital intensive and have numerous assets.

ISO 55001 provides a competent asset management framework to establish, implement, maintain, and improve effective control and governance of assets to realize value through managing risk and opportunity, in order to achieve the desired balance of cost, risk, and performance. Some of the significant improvements witnessed by organisations are:

• 15 % reduction in Operational Costs
• 10 % increase in Utilization / Return on capital employed

An Effective management system also focuses on creating a culture of steady improvement and can also help to:

• Improvement in Asset performance (e.g. uptime, efficiency);
• Reduction in the unit cost of product or service;
• Improved reliability & availability (mean time/distance between failures);
• Improves life cycle costs

Understanding Terms and Definitions Related to ISO 55001

Before we dive deeper into the details, let us look at the meanings of some terms and definitions for better understanding.

Asset: “Item, thing, or entity that has potential or actual value to an organisation.” (Reference ISO 55000:2014)

Value can be tangible or intangible, financial or non-financial,
Physical assets usually refer to equipment, inventory, and properties owned by the organisation.
Intangible assets refer to non-physical assets such as leases, brands, digital assets, use rights, licenses, intellectual property rights, reputation, or agreements.

Asset management: “Asset management is the coordinated activity of an organisation to realize value from assets.” (Reference ISO 55001:2014)

Asset Management Ensures

Assets exist to provide value to the organisation.  Asset management does not focus on the asset itself, but on the value that the asset can provide to the organisation.

• That organisational objective is translated into technical and financial objectives.
• Leadership and workplace culture are determinants of the realization of value.
• That asset will fulfill its required purpose.

Scope and Application of ISO 55001

ISO 551001 can be applied to all types of assets as well as by all types and sizes of organisations that are looking to improve the realization of value from their assets which includes the following:

• Physical assets
• Information assets
• Intangible assets
• Critical assets
• Information and Communications Technology (ICT) assets
• Infrastructure assets
• Moveable assets

Kindly note:

• Physical assets usually refer to equipment, inventory, and properties owned by the organisation.
• Intangible assets refer to non-physical assets such as leases, brands, digital assets, use rights, licenses, intellectual property rights, reputation, or agreements.

• Documentation Requirement for ISO 55001- Asset Management System

  Every organisation should document the following information in order to comply with ISO 55001

  a) Strategy and Planning

  Corporate service levels, policy, and objectives
  Strategic Asset Management Plans (SAMP) / Asset Management Strategies
  Asset Management Plans

  b) Process

  Asset-related processes and procedures
  Process performance objectives and indicators

  c) Technical and Asset-related Properties

  Asset attributes, ownership, design parameters, vendor information and location.

  d) Service Delivery and Operations

  Service levels, performance objectives, asset performance characteristics, future operational requirements and demand management objectives.

  e) Maintenance Management

  Historical asset failures, betterment or replacement dates and future maintenance requirements.

  f) Performance Management and Reporting

  Asset performance data, continuous improvement objectives and regulatory reporting.

  g) Financial and Resource Management

  Historical cost, depreciation, asset replacement value, date of acquisition, materiality, capitalization rules, asset classification/hierarchies, life cycle costing, analysis, useful lives of assets, residual value, and any residual liabilities.

  h) Risk Management

  i)   Contingency and Continuity Planning

  j) Contract Management

  Asset-related contractual information, vendor information, services, objectives, third party agreements.

  Key Steps to Implement ISO 55001

  The International Standard can create an efficient Asset Management System that helps achieve your organisation’s goal, expand or replace existing infrastructure, and comply with regulatory requirements along with other benefits if implemented properly.

  An Asset Management System is a set of interrelated and interacting elements of an organisation, whose function is to establish the asset management policy and asset management objectives, plans, and the processes, needed to achieve those objectives. Here the steps that need to be followed: