Performance management frameworks - Why you need them

27 November 2022|Asset Management

By Jarrod Chesher and Rachel Scott

A well-designed performance management framework is critical to the success of any asset management initiative. By aligning organisational objectives with asset management objectives and operational KPIs, you can ensure that everyone in the organisation is working towards the same goal.

For a detailed understanding of effective KPIs, explore our guide: The ultimate guide to asset management KPIs.

The importance of asset management

Organisations invest a lot of money in their assets, so it is crucial that these assets are managed effectively. Asset management is the process of planning, controlling and optimising the use of an organisation's assets. This process includes acquiring, maintaining, operating and disposing of assets in a way that maximises their economic value.

Benefits of asset management systems

There are many benefits to implementing an asset management system, including improved decision-making, reduced costs, increased efficiency and improved risk management. However, in order for asset management to be successful, it is essential to have a well-designed performance management framework in place.

Learn more about maximising these benefits in our article: How asset management can help you achieve operational excellence.

Understanding performance management frameworks

A performance management framework provides a structure for setting and measuring Asset Management KPIs. It is important to have this framework in place so that you can track progress and identify areas for improvement. Without a performance management framework, it would be difficult to assess the success of your asset management initiative.

Key considerations for framework development

When setting up a performance management framework, there are a few key considerations to keep in mind:

1. Align organisational objectives

Organisational objectives should be the starting point for any performance management framework. Asset management objectives should be aligned with these organisational objectives so that everyone in the organisation is working towards the same goal. The derivation of the asset management objectives from the organisational objectives should be clear and repeatable. Objectives should be SMART (Specific, Measurable, Attainable, Relevant and Time-Based) and able to be quantitatively derived and allocated.

2. Choose the right KPIs

The next step is to choose the right KPIs to measure progress. Asset management KPIs should be chosen so that they accurately reflect the organisation's objectives. They should also be able to be measured and reported on a regular basis. We have previously provided examples in "The Ultimate Guide to Asset Management KPIs". It is important to select KPIs that are relevant to the organisation and that will provide valuable insights into the performance of the asset management system.

3. Establish reporting systems

Once the KPIs have been selected, a reporting system must be set up so that progress can be tracked. This reporting system should be able to generate reports on a regular basis so that Asset Managers can track progress and identify areas for improvement. The reporting system should also be flexible so that it can be adapted as the Asset Management system evolves.

Conclusion

A well-designed performance management framework is essential for the success of any asset management initiative. By carefully considering organisational objectives, selecting appropriate KPIs, and implementing effective reporting systems, you can create a framework that supports continuous improvement and helps achieve your asset management goals.

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