Value Management of Construction Projects, 2nd Edition

8Value Management and Asset Management

8.1 Introduction

The focus of asset management (AM) is on the strategic alignment of physical assets as a public or private sector corporate organisational resource with the organisation's strategy. At the core of this is how physical assets enable those strategies and as a result add value, either commercially, socially and/or politically. As such, AM manages the linkages between the organisation's strategic plan and the whole life management of physical assets, the subsequent investment decisions associated with managing those assets through time, and any related bundle of ‘rights’ and ‘interests’ that may be involved in the use of assets to create value for an organisation. There is a consequent close alignment with the philosophy of asset management and that of value management (VM).

The earlier parts of the chapter set the context for three case studies in the final sections. The case studies explore the relationship between asset management and the use of a value management philosophy and methodology. This is achieved by exploring why AM is important for an organisation, providing a series of definitions, and subsequently positioning it against other related disciplines such as maintenance management, facilities management, property management and corporate real estate management. The chapter adopts the term AM throughout due to its wider strategic remit. Having set out the thinking, concepts and models behind asset management, the ...