Why are organizations turning to Asset Investment Planning (AIP)?
As an asset-intensive organization, you make tremendous investments in the assets you rely on to operate your business day to day. And you want to make the most of your outlays to better meet service level agreements (SLAs), optimize your capital spending dollars, and minimize the business risks of asset failure.
Achieving the most desirable outcomes requires you to have the ability to take advantage of comprehensive data to make strategic decisions. Yet if you’re like many asset intensive organizations, you may rely on antiquated decision-making processes to make capital investment decisions, such as drawing on rules of thumb, historical practices, and manufacturers’ recommendations. Clearly, you need a solution that gives you more accurate data-driven answers more quickly.
Today, asset-intensive organizations are increasingly adopting asset investment planning (AIP) to help determine how to best spend their limited capital to ensure their assets deliver the highest level of service across the asset lifecycle. Gartner predicts that by 2022, 50 percent of utilities will shift from traditional planning tools to API software to help them optimize their investments in critical assets. AIP can also lengthen your planning horizon to smooth out capital expenditures to minimize spikes.
The benefits of an AIP strategy
An asset investment plan enables your organization to optimally balance costs, risks, and performance improvements of competing asset interventions. For example, an AIP allows your organization to look at the tradeoffs between maintaining, refurbishing, or replacing a given asset. The plan also provides data-driven answers to fundamental questions such as: How big a budget do you need? What should you spend it on? And when should you spend it?
By using AIP to develop a more well thought out asset plan, your organization will be able to:
- More effectively meet service level objectives. AIP operationalizes ISO 55000 best practices to enable your organization to more effectively assess the impact of your asset decisions on the service level you deliver to your customers now and in the future.
- Make the right investments in the right assets at the right time. AIP enables your asset-driven organization to evaluate the best course of action—whether it’s best to invest in maintenance, refurbishment, or replacement for each of your assets. You can evaluate these investments across timeframes ranging from one to 25-plus years in order to smooth capital expenditures over time.
- More effectively evaluate business risks with regards to areas such as safety, environmental impacts, service impacts and costs.
- Future proof investments. AIP enables your organization to keep pace with evolving regulatory requirements and market conditions and factor these changes into your investment planning.
Your organization may have long relied on educated guesses based on past experience to make asset investment decisions. AIP now allows you to make data-driven decisions as to when and how to invest in your assets so you can deliver on your SLAs, minimize risk, and make the most of your hard-earned capital. To learn more about how AIP can benefit your organization, read our whitepaper “Four key considerations for adopting an asset investment planning strategy.”
 Gartner report , Optimize Utility Capital Expenditures with Asset Investment Planning Solutions, 22 January 2019, Refreshed 1 June 2020
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