Best practice asset management is achieved by adopting a life-cycle approach which uses transparent, informed decision-making processes.
Life-cycle planning is a key asset management concept that takes into account the whole-of-life implications of acquiring, operating, maintaining and disposing of a building asset.
It should be used when making decisions at both strategic and operational levels of capital works investment and building management.
While there are many uses of life cycle planning, it is important to understand how this information can be used in support of your current and future asset management requirements.
The objectives of life-cycle planning are to:
- determine the total cost of ownership and operation of an asset to ensure service continuity
- establish a sound basis on which decisions are made by evaluating the total cost of any investment decision, rather than just looking at the short-term impact or the initial capital costs
- identify the impact of refurbishment and maintenance decisions on asset disposal plans.
Undertaking life-cycle planning for assets will ensure that:
- the building effectively supports priorities
- there is a sound basis for making investment, maintenance and disposal decisions (for example, the estimated economic life of the asset should be considered when determining if refurbishment or disposal is the most appropriate course of action).
Possible consequences of not undertaking life-cycle planning include:
- failure to make explicit and give consideration to the optimal balance of operating and maintenance costs that are attributable to the use of the building relative to capital works investment/procurement costs
- capital costs are minimised without the knowledge of the consequential impact on life-cycle costs
- deficiencies in the asset planning and management processes which may result in assets that are inefficient to operate and maintain
- difficulty in determining whether refurbishment/renovation or an addition to a building will deliver better value for money than continuing to maintain a building which is no longer suited to its function or purpose
- inappropriate strategies for asset utilisation over the expected remaining life of the building.
