National Transportation  Asset Management Workshop September 24, 2001 Establishing Goals and Performance Measures: Impleme...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>OMNITRANS </li></ul><ul><li>SAN BERNARDINO...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Sondra Kay Morison, CPA </li></ul><ul><li>...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>OMNITRANS </li></ul><ul><li>16 million pas...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>I.  Foundations for Integrated Systems </l...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>I.  Foundations for Integrated Systems: </...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>1. Organizational Hierarchy Perspective </...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Hierarchy describes  authority .  It is th...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>2. Systems Perspective </li></ul>
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>The systems perspective illustrates </li><...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Applied to EAM, the systems perspective de...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>3. Michael E. Porter’s Value Chain Perspec...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Support activities add value to the links ...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Porter’s Value Chain Helps us Understand E...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>II. Enterprise Asset Management (EAM) </li...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>EAM </li></ul><ul><li>describes a system t...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Premises of EAM </li></ul><ul><li>an agenc...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Premises of EAM </li></ul><ul><li>the cost...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Premises of EAM </li></ul><ul><li>an effec...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Benefits of EAM </li></ul><ul><li>focus is...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Benefits of EAM </li></ul><ul><li>facilita...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Note well the caution of V.C. Srikanth: </...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>III. Integration of Performance Measures <...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Performance measures inform an organizatio...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Four Types of Performance Measures </li></...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>3.  Outcomes  measure the effect, if any, ...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>EAM performance measures must be directed ...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>IV. IMPLEMENTATION ISSUES </li></ul>
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>1. The planning and implementation of the ...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>2. Use an incremental approach--learn from...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>3. Pay attention to the human side of EAM....
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>4. Software should be designed to facilita...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>5. Effective implementation of EAM depends...
ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>THANK YOU! </li></ul>
 
Upcoming SlideShare
Loading in …5
×

National Transportation Asset Management Workshop

398 views

Published on

  • Be the first to comment

  • Be the first to like this

National Transportation Asset Management Workshop

  1. 1. National Transportation Asset Management Workshop September 24, 2001 Establishing Goals and Performance Measures: Implementation of Enterprise Asset Management and the Integration of Performance Measures
  2. 2. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>OMNITRANS </li></ul><ul><li>SAN BERNARDINO COUNTY </li></ul><ul><li>CALIFORNIA </li></ul><ul><li>Durand L. Rall, CEO/General Manager </li></ul>
  3. 3. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Sondra Kay Morison, CPA </li></ul><ul><li>Director of Finance </li></ul>
  4. 4. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>OMNITRANS </li></ul><ul><li>16 million passengers/year </li></ul><ul><li>480 square mile service area </li></ul><ul><li>15 cities plus county </li></ul><ul><li>294 coaches/vans </li></ul><ul><li>640 employees </li></ul><ul><li>$75 million budget </li></ul><ul><li>Charting new directions </li></ul>
  5. 5. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>I. Foundations for Integrated Systems </li></ul><ul><li>II. Enterprise Asset Management (EAM) </li></ul><ul><li>III. Integration of Performance Measures </li></ul><ul><li>IV. Implementation Issues </li></ul>
  6. 6. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>I. Foundations for Integrated Systems: </li></ul><ul><li>Different Perspectives of a Transit Organization </li></ul>
  7. 7. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>1. Organizational Hierarchy Perspective </li></ul>
  8. 8. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES
  9. 9. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Hierarchy describes authority . It is the traditional way of thinking about organizations. But, it does </li></ul><ul><li>not describe intra-organizational communications and relationships or operational linkages </li></ul><ul><li>not say anything about the organization’s mission, goals, and strategies </li></ul><ul><li>not say anything useful about organizational assets, their value to the organization, and their costs </li></ul>
  10. 10. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>2. Systems Perspective </li></ul>
  11. 11. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>The systems perspective illustrates </li></ul><ul><li>relationships between the organization and its external environment </li></ul><ul><li>relationships among the units of the organization </li></ul><ul><li>It’s like the weather: small or large actions (or inactions) in one part of the organization may have profound effects on the other parts. </li></ul>
  12. 12. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Applied to EAM, the systems perspective demonstrates </li></ul><ul><li>the extent to which a transit organization may purchase needed assets is based on its relationship with its external environment </li></ul><ul><li>that maximizing asset value depends on effective linkages among the organization’s parts </li></ul>
  13. 13. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>3. Michael E. Porter’s Value Chain Perspective </li></ul><ul><li>Primary Activities </li></ul><ul><li>Buy Marketing Prepare Deliver </li></ul><ul><li>Vehicles & Sales Vehicles Service </li></ul>
  14. 14. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Support activities add value to the links in the primary activities chain or to assist other support units make their contribution to the value chain </li></ul><ul><li>Human Resources Finance Planning Maintenance Procurement Information Management </li></ul><ul><li>Value Chain Primary Activities </li></ul>
  15. 15. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Porter’s Value Chain Helps us Understand EAM </li></ul><ul><li>it is consistent with the systems approach </li></ul><ul><li>it directs managers to employ a mindset in which everything in the organization is directed toward adding value to the final service </li></ul><ul><li>it demands that managers subordinate parochial priorities for the achievement of larger goals </li></ul><ul><li>it demands that managers eliminate the mindset that assets are the property of their units of the organization </li></ul><ul><li>it requires that assets be treated according to what they add to the transit agency’s service </li></ul>
  16. 16. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>II. Enterprise Asset Management (EAM) </li></ul>
  17. 17. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>EAM </li></ul><ul><li>describes a system that integrates the management, support, and utilization of assets in an asset intensive organization (such as a transit organization). </li></ul><ul><li>Focus-Fusion-Force </li></ul>
  18. 18. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Premises of EAM </li></ul><ul><li>an agency’s revenue is directly linked to the available quality and quantity of its transit assets (e.g. coaches, para-transit vans, trolleys, trains, subway cars, boats) </li></ul><ul><li>the purchase and maintenance of transit assets amount to a large percentage of most agency budgets </li></ul>
  19. 19. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Premises of EAM </li></ul><ul><li>the cost of buying, maintaining, and operating transit assets is a variable expense, not a fixed one </li></ul><ul><li>an effective EAM will reduce the variable cost and increase the effective utilization of transit assets, thereby maximizing the value of those assets </li></ul>
  20. 20. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Premises of EAM </li></ul><ul><li>an effective EAM will reduce organizational friction caused by poor intra-organizational communications, misunderstandings, and conflicting notions about what the organization is trying to achieve, and how </li></ul>
  21. 21. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Benefits of EAM </li></ul><ul><li>focus is on the relationship between assets and organizational goals and strategies </li></ul><ul><li>integrates organizational units and processes </li></ul><ul><ul><li>procurement with operations </li></ul></ul><ul><ul><li>maintenance with operations </li></ul></ul><ul><ul><li>support functions with maintenance and operations </li></ul></ul><ul><ul><li>executive management with operating and support </li></ul></ul>
  22. 22. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Benefits of EAM </li></ul><ul><li>facilitates communication among units of the organization involved in asset purchase, management, operation, support, and maintenance </li></ul><ul><li>develops an asset information system and integrates that system with the organization’s overall management system (e.g. a MIS to support Performance Based Management) </li></ul>
  23. 23. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Note well the caution of V.C. Srikanth: </li></ul><ul><li>EAM integrates asset management with enterprise wide functions </li></ul><ul><li>It is an integrated management system, not just another information system </li></ul>
  24. 24. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>III. Integration of Performance Measures </li></ul>
  25. 25. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Performance measures inform an organization of its goals and objectives, and how successful it has been in their achievement. </li></ul><ul><li>We won! </li></ul>
  26. 26. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>Four Types of Performance Measures </li></ul><ul><li>1. Inputs are invested into and by the organization. (e.g. FTA grants to purchase new coaches). </li></ul><ul><li>2. Outputs are activities performed by the organization (e.g. a group of actions (a strategy) to reduce the incidence of road calls in a given period of time). </li></ul>
  27. 27. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>3. Outcomes measure the effect, if any, a given set of outputs (strategy) make to the organization (e.g. the maintenance program listed above might show a reduction in road calls by 13% in one fiscal year). </li></ul><ul><li>4. Ratios measure the relationship between two or more sets of data </li></ul><ul><li>a. number of road calls / total miles of transit service = Road Calls Per Mile </li></ul><ul><li>b. gross transit revenues / amortized value of transit assets = Return on Assets (ROA) </li></ul>
  28. 28. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>EAM performance measures must be directed by the organization’s overall strategic goals, objectives, and priorities. </li></ul><ul><li>The most effective EAM is not simply a parallel data and management system. </li></ul>
  29. 29. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>IV. IMPLEMENTATION ISSUES </li></ul>
  30. 30. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>1. The planning and implementation of the EAM system should include all parts of the organization. </li></ul>
  31. 31. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>2. Use an incremental approach--learn from and correct mistakes as you proceed to the next stage. </li></ul><ul><li>Don’t do efficiently that which should not be done at all. Peter Drucker </li></ul>
  32. 32. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>3. Pay attention to the human side of EAM. A system that is not supported is a system that will not work well or not at all. </li></ul>
  33. 33. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>4. Software should be designed to facilitate the organization’s goals and strategies; the organization’s goals and strategies should not be subverted to facilitate a software package. </li></ul><ul><li>Let’s go in the same direction! </li></ul>
  34. 34. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>5. Effective implementation of EAM depends upon the visible and consistent support of and participation by the organization’s top managers. </li></ul><ul><li>Key to success! </li></ul>
  35. 35. ENTERPRISE ASSET MANAGEMENT AND THE INTEGRATION OF PERFORMANCE MEASURES <ul><li>THANK YOU! </li></ul>

×