AMS Behavior: Risk Management

Asset Management Behavior Miniseries

ISO 55000 defines risk as the “effect of uncertainty on objectives” and objectives as a “result to be achieved”.  It also states that asset management is not about assets, it’s about the value assets provide to an organization.  It further defines asset management as the “coordinated activity of an organization to realize value from assets”.  This requires the management of risk related to the achievement of objectives that define value for the organization.

The Asset Management (AM) Framework introduced in an earlier AMP Newsletter miniseries details a structure for risk-informed resource and investment decision making.  The AM Framework focuses on resource and investment decision making because it is the point that commits the organization to actions that drive its success.  Given uncertainties and resource and capability limitations, these decisions always involve the consideration of risk.

This outlines the need for risk management through the lens of asset management.  The balance of this article will cover Asset Management System (AMS) behavior and its treatment of risk through an organization’s universal AM Framework.  To do so necessitates the introduction of two perspectives: Operational Risk Management and Enterprise Risk Management.  These perspectives are implemented through an organization’s AM Framework to enhance integration of risk management and asset management, and thereby improve organizational performance and success.