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A structured approach to the development and implementation of an AM scorecard

Darryl Summers: Partner Consultant, Pragma

Measuring and managing performance in an organisation is vital in driving an organisation towards success.

Management requires fact-based decision making which relies on authentic performance measures. In medium to large organisations, which tend to span multiple customer sectors and countries, consistent evaluation of performance is often a challenge experienced by executives. Organisations with a history of major acquisitions and mergers further complicate standardisation with multiple operating models in place. A structured approach to the development and implementation of an asset management scorecard can set up an organisation for success.


Successful endeavours in asset management scorecards are able to balance a short term need for tracking quick wins while rolling out an asset management key performance indicator (KPI) set that is able to track progress in the strategic cycle and drive the desired behaviours in the organisation. Effective change management is key in managing resistance to change and embedding performance measurement in the operational culture. A structured approach supports an organisation that is transitioning to a new and improved KPI set. Figure 1 below depicts such a structured approach.

Figure 1. Structured approach to AM Scorecard Development and Implementation

Evaluate Current KPI Set

Organisations with no form of performance measures are rare in modern times. An organisation’s KPI set should be reevaluated regularly and this evaluation should be revisited at the start of an asset management intervention such as the development of an updated AM scorecard.

Prior to attempting to change the measures an organisation uses to track performance, an asset management professional needs to understand the current KPIs that are in use. These KPIs are often embedded in an organisation’s culture. Existing KPIs may either be leveraged to support your implementation, e.g. by adopting a useful KPI across divisions and sites, or a potential barrier in rolling out your scorecard.

KPIs with merit should be stressed to support quick wins. KPIs that may be a potential barrier should be identified in the early stages of your initiative to enable an asset management professional to plan their approach to addressing the required changes. KPI’s linked to incentives, especially for unionised staff, require proactive engagement with stakeholders.

Evaluation of the current KPI set should be seen as an opportunity to engage with stakeholders to get first-hand feedback on what is working in the current KPI set and what requires change or review. This engagement should happen at multiple levels of the organisation across all the impacted functions. Investment in this activity pays dividends at the latter phases of development and implementation, but it is not a substitute for change management.

Determine To-Be KPI Set

Once the current KPI sets are understood, these KPIs can form a departure point when engaging with stakeholders in determining the AM scorecard to be used to drive asset management performance. An AM framework, as depicted in the figure below, is recommended to analyse gaps in the KPI set.

Prior to developing the To-Be KPI set, the organisation and subsequent asset management objectives should be clearly defined and documented. All KPIs in an AM scorecard should be aligned with these objectives, irrespective of the framework used to evaluate and define a KPI set.

KPI sets should be developed from strategic level (executive/senior management) to tactical (middle management) and subsequently operational level (operational staff). It is important that individuals and teams are measured using KPIs that they can influence.

When defining a To-Be KPI set, business process maturity should be considered to ensure that selected KPIs are feasible. Rolling out advanced measures for an immature business process or function will severely inhibit adopting by stakeholders in the business.

The To-Be KPI set should be formally documented with definitions, formulas, reporting frequency and sources of data noted for all KPIs in the set.

Development Phase

Defining a To-Be AM KPI set is just part of the preparation to roll out an improve AM scorecard for an organisation. Development is required to make the To-Be KPI set feasible. An AM professional needs to address how KPIs will be reported, what the targets should be for the defined KPIs and how information shall be managed. This development is discussed in the following subsections.

Dashboard and Report Development

Numerous reporting tools and BI tools have become available in the market to support organisations in providing platforms to aid configuration of reports, dashboards and data analytics. In large organisations, these tools should be leveraged to aid in standardisation and automation of reporting. Labour intensive excel driven reports should be avoided, as data velocity tends to be poor for such reporting and these reports are prone to manipulation.

A key determining factor in the success of the roll out of an AM scorecard is the selection of the software tools or platform to support reporting. The desired functionality of a software tool or platform should be the primary factor when performing an evaluation of available software. Defaulting to the currently available software tools often dooms an organisation to months of custom development and end user frustration. An AM professional should consider the following factors when selecting a software suite or reporting platform to support AM performance reporting:

  • Ease of deployment of reports and dashboards
  • Configurability of dashboards and reports by power users
  • The ability to interface with existing information systems (MES, EAMS and SCADA systems) is a minimum requirement. It is advisable to select software that can interface using multiple protocols and that is platform-independent.
  • Required software development to configure scorecard and dashboards
  • System extensibility
  • Mobile functionality
  • Available software support and developer community

Once a software platform/suite has been selected for AM performance reporting, dashboards should be configured to support reporting and performance monitoring at executive level, departmental management level and operational level. Each dashboard should be optimised to display information that is only relevant to the targeted end user. It is vital that all dashboards and data represent a single version of the truth with data and calculations consistent and aligned.

Established AM focused software suites such as On Key Insights address the factors listed above, the key differentiating factor is typically the capability of the service provider linking the business requirements to the deployed system.


Figure 2. Dashboard from On Key Insights providing an operational view of the Work Management KPIs and the distribution of work


Figure 3. Reliability Dashboard from On Key Insights utilising Jack Knife Analysis

Defining Performance Targets

When a supervisor or manager is confronted with a new KPI, their first response is often ‘what is a good result for this measure?’. The definition of targets that are both achievable and sufficient to drive the required behaviour is what an AM professional should strive for. These targets should be defined either prior to roll-out across an organisation or in the early stages of the deployment of an AM scorecard. An AM professional has the following tools available to determine performance targets:

  • Benchmarking with peers in your industry
  • Internal benchmarking by performing data gathering of internal performance over an initial trial period
  • Modelling and Simulation

Information Strategy

Strict and effective governance of information used to support an AM scorecard is a key enabler in ensuring performance measures are relevant and authentic.  An organisation’s information strategy should be updated to support the AM scorecard by defining:

  • Input data and source systems.
  • Roles and responsibilities for ensuring data integrity
  • How data acquisition will be performed for relevant transactions
  • Data quality controls
  • Data velocity requirements
  • Responsibility for compilation and distribution of KPIs
  • Information retention and security policy
  • Information audit requirements

Change Management

Effective organisational change management with any major AM initiative, such as a change in AM KPIs, is vital in setting up the business for success. Ineffective organisational change management will result in your employees being apathetic and resistant to adopting a new and improved AM scorecard. A formal change management methodology (e.g. ADKAR) should be applied as part of the initiative. The selection of change champions for your initiative at each site and, if possible, each function is key in driving the required changes in the business. The manner in which an organisation proactively addresses resistance to change will determine the effectiveness of the AM scorecard roll out.

AM Scorecard Roll Out

With all the required efforts in understanding the As-Is state of an organisation, defining a revised AM scorecard, developing dashboards and reports, defining KPI targets and preparing a business for change complete, an organisation is ready for the roll-out of an improved AM scorecard.

An AM professional should resist the urge to roll out all changes at once. A phased approach is recommended to prove concepts and create momentum. This prevents stakeholders from being overwhelmed by the change. KPIs should be prioritised based on strategic importance to the business, and roll out should start at strategic sites. Change management efforts should be doubled at this stage with a focus on managing engagement during initial stages and focusing on-site ownership of the new KPIs.

Senior management support of the roll-out is a key outcome of change management efforts, however evidence of senior management and executives using KPIs and making decisions based on the new AM scorecard has a positive bearing on the success and sustainability of the rollout.

Simple tools such as visual management should be utilised to ensure KPIs are visible to employees. The more effective KPIs are communicated and made available to employees, the more effective the roll-out process and employee buy-in will be.

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