Question 5

Explanation

Whole-life asset management is a process of evaluating the purchase and other costs incurred during the life of an asset, such as maintenance, operation, disposal, and environmental impact. This process could deliver greater cost-saving in the long-term, but it also requires extensive research and the involvement of multiple stakeholders, such as suppliers, users, and regulators. Therefore, getting support from senior management is necessary for implementing this process effectively.

With senior management support, whole life asset management process can be facilitated because:

• Procurement can have sufficient resources (finance, technologies and personnel) to analyze the whole-life cycle costing and make informed decisions based on the best value for money.

• Senior management support can help secure commitment from other stakeholders and facilitate the collaboration across different functions and departments. This can improve the communication, coordination, and alignment of goals and expectations among all parties involved in the asset management.

• Senior management support can also help overcome potential barriers and challenges, such as resistance to change, lack of expertise, or legal issues. Senior management can provide leadership, guidance, and incentives to motivate and empower the procurement team and other stakeholders.

Without senior management support, procurement can face difficulties in implementing the whole life asset management process, such as:

• Poorer communication and less collaboration from other stakeholders, who may not understand or appreciate the benefits of the process. This can lead to conflicts, misunderstandings, or delays in the asset management.

• Lack of resources (finance, technologies and personnel) to conduct the whole-life cycle costing analysis and monitor the performance of the asset. This can result in suboptimal decisions or outcomes that may compromise the quality or functionality of the asset.

• Higher risks of failure or stagnation of the project due to external or internal factors, such as market changes, regulatory changes, or organizational changes. Without senior management support, procurement may not have the authority or flexibility to adapt to these changes or resolve any issues that arise.

Procurement may gain the support from senior management by undertaking the following steps:

• Understand the interest and priorities of senior management, such as their strategic goals, financial targets, or performance indicators. Use the same language as them and align the benefits of the project with their interests.

• Explain the benefits of the project in a clear and concise business case that demonstrates how the whole life asset management process can help achieve cost savings, improve efficiency, enhance quality, reduce risks, or increase customer satisfaction.

• Provide evidence and examples of successful cases where similar projects have been implemented by other organizations or industries. Highlight the best practices and lessons learned from these cases and how they can be applied to the current project.

• Anticipate and address any potential concerns or objections that senior management may have regarding the project, such as feasibility, affordability, scalability, or sustainability. Provide realistic estimates and projections of the costs and benefits of the project over time and show how they outweigh any drawbacks or challenges.