The contribution of enterprise systems to core capabilities: the case of asset lifecycle management in the utilities sector

The desire to obtain competitive advantage is a motivator for implementing Enterprise Resource Planning (ERP) Systems (Adam & O’Doherty, 2000). However, while it is accepted that Information Technology (IT) in general may contribute to the improvement of organisational performance (Melville, Kraemer, & Gurbaxani, 2004), the nature and extent of that contribution is poorly understood (Jacobs & Bendoly, 2003; Ravichandran & Lertwongsatien, 2005). Accordingly, Henderson and Venkatraman (1993) assert that it is the application of business and IT capabilities to develop and leverage a firm’s IT resources for organisational transformation, rather than the acquired technological functionality, that secures competitive advantage for firms. Application of the Resource Based View of the firm (Wernerfelt, 1984) and Dynamic Capabilities Theory (DCT) (Teece and Pisano (1998) in particular) may yield insights into whether or not the use of Enterprise Systems enhances organisations’ core capabilities and thereby obtains competitive advantage, sustainable or otherwise (Melville et al., 2004). An operational definition of Core Capabilities that is independent of the construct of Sustained Competitive Advantage is formulated. This Study proposes and utilises an applied Dynamic Capabilities framework to facilitate the investigation of the role of Enterprise Systems. The objective of this research study is to investigate the role of Enterprise Systems in the Core Dynamic Capabilities of Asset Lifecycle Management. The Study explores the activities of Asset Lifecycle Management, the Core Dynamic Capabilities inherent in Asset Lifecycle Management and the footprint of Enterprise Systems on those Dynamic Capabilities. Additionally, the study explains the mechanisms by which Enterprise Systems sustain the Exploitability and the Renewability of those Core Dynamic Capabilities. The study finds that Enterprise Systems contribute directly to the Value, Exploitability and Renewability of Core Dynamic Capabilities and indirectly to their Inimitability and Non-substitutability. The study concludes by presenting an applied Dynamic Capabilities framework, which integrates Alter (1992)’s definition of Information Systems with Teece and Pisano (1998)’s model of Dynamic Capabilities to provide a robust diagnostic for determining the sustained value generating contributions of Enterprise Systems. These frameworks are used in the conclusions to frame the findings of the study. The conclusions go on to assert that these frameworks are free - standing and analytically generalisable, per Siggelkow (2007) and Yin (2003).

Creating an asset registry for railway electrical traction equipment with open standards

An asset registry arguably forms the core system that needs to be in place before other systems can operate or interoperate. Most systems have rudimentary asset registry functionality that store assets, relationships, or characteristics, and this leads to different asset management systems storing similar sets of data in multiple locations in an organisation. As organisations have been slowly moving their information architecture toward a service-oriented architecture, they have also been consolidating their multiple data stores, to form a “single point of truth”. As part of a strategy to integrate several asset management systems in an Australian railway organisation, a case study for developing a consolidated asset registry was conducted. A decision was made to use the MIMOSA OSA-EAI CRIS data model as well as the OSA-EAI Reference Data in building the platform due to the standard’s relative maturity and completeness. A pilot study of electrical traction equipment was selected, and the data sources feeding into the asset registry were primarily diagrammatic based. This paper presents the pitfalls encountered, approaches taken, and lessons learned during the development of the asset registry.

Contracting-out asset maintenance : how arrangements adapt over time

Technological and societal change, along with organisational and market change (driven by contracting-out and privatisation), are “creating a new generation of infrastructures” [1]. While inter-organisational contractual arrangements can improve maintenance efficiency through consistent and repeatable patterns of action - unanticipated difficulties in implementation can reduce the performance of these arrangements. When faced with unsatisfactory performance of contracting-out arrangements, government organisations may choose to adapt and change these arrangements over time, with the aim of improving performance. This paper enhances our understanding of ‘next generation infrastructures’ by examining adaptation of the organisational arrangements for the maintenance of these assets, in a case study spanning 20 years.

Reflection on the use of rating and score cards for asset and service assessment

The concept of star rating council facilities has progressively gained traction in Australia following the work of Dean Taylor at Marochy Shire Council in Queensland in 2006 – 2007 and more recently by the Victorian STEP asset management program. The following paper provides a brief discussion on the use and merits of star rating within community asset management. We suggest that the current adoption of the star rating system to manage community investment in services is lacking in consistency. It is suggested that the major failing is a lack of clear understanding in the purpose being served by the systems. The discussion goes on to make some recommendations on how the concept of a star system could be further enhanced to serve the needs of our communities better.

Sustainable infrastructure assets : capability for infrastructure capacity management

Building for a sustainable environment requires sustainable infrastructure assets. Infrastructure capacity management is the process of ensuring optimal provision of such infrastructure assets. Effectiveness in this process will enable the infrastructure asset owners and its stakeholders to receive full value on their investment. Business research has shown that an organisation can only achieve business value when it has the right capabilities. This paradigm can also be applied to infrastructure capacity management. With limited access to resources, the challenge for infrastructure organisations is to identify and develop core capabilities to enable infrastructure capacity management. This chapter explores the concept of capability and identifies the core capability needed in infrastructure capacity management. Through a case study of the Port of Brisbane, this chapter shows that infrastructure organisations must develop their intelligence gathering capability to effectively manage the capacity of their infrastructure assets.

The management of transport construction projects : a survey of public sector organisations in Queensland Australia

Construction procurement organisations in the Australian framework provide broad guidelines on project management in setting benchmark performance measurements and processes for evaluating their projects. Despite this, little has been known in the project management practise in transport construction projects in Australia, in particular Queensland. Questionnaire data from 53 project management practitioners employed in State and City public sector organisations in Queensland,suggested that many practitioners in the public sector have little or a lack of understanding of government regulatory policies, which are used as economic evaluation tools for project options. Public sector project managers perceive socio-economic evaluation tools as inappropriate for public sector projects. The survey results also found conducting risk management analysis, developing a risk register and mitigation of risks were most effective way of managing risk. This study provides an opportunity for the public sector to review and provide training on project management practices and government regulatory policies governing public projects. This will improve project management practitioners’ understanding and interpretation of government regulatory policies.

Assessing wet crashes for the skid resistance management of road assets

Australia, road crash trauma costs the nation A$15 billion annually whilst the US estimates an economic impact of around US$ 230 billion on its network. Worldwide economic cost of road crashes is estimated to be around US$ 518 billion each year. Road accidents occur due to a number of factors including driver behaviour, geometric alignment, vehicle characteristics, environmental impacts, and the type and condition of the road surfacing. Skid resistance is considered one of the most important road surface characteristics because it has a direct effect on traffic safety. In 2005, Austroads (the Association of Australian and New Zealand Road Transport and Traffic Authorities) published a guideline for the management of skid resistance and Queensland Department of Main Roads (QDMR) developed a skid resistance management plan (SRMP). The current QDMR strategy is based on rationale analytical methodology supported by field inspection with related asset management decision tools. The Austroads’s guideline and QDMR's skid resistance management plan have prompted QDMR to review its skid resistance management practice. As a result, a joint research project involving QDMR, Queensland University of Technology (QUT) and the Corporative Research Centre for Integrated Engineering Asset Management (CRC CIEAM) was formed. The research project aims at investigating whether there is significant relationship between road crashes and skid resistance on Queensland’s road networks. If there is, the current skid resistance management practice of QDMR will be reviewed and appropriate skid resistance investigatory levels will be recommended. This paper presents analysis results in assessing the relationship between wet crashes and skid resistance on Queensland roads. Attributes considered in the analysis include surface types, annual average daily traffic (AADT), speed and seal age.

The key to successful implementation : project management of sustainable infrastructure provision

Delivering infrastructure projects involves many stakeholders. Their responsibilities and authorities vary over the course of the project lifecycle - from establishing the project parameters and performance requirements, to operating and maintaining the completed infrastructure. To ensure the successful delivery of infrastructure projects, it is important for the project management team to identify and manage the stakeholders and their requirements. This chapter discusses the management of stakeholders in delivering infrastructure projects, from their conception to completion. It includes managing the stakeholders for project selection and involving them to improve project constructability, operability and maintainability.

Asset health prediction using condition indicators and operating environment indicators : a case study

Prognostics and asset life prediction is one of research potentials in engineering asset health management. We previously developed the Explicit Hazard Model (EHM) to effectively and explicitly predict asset life using three types of information: population characteristics; condition indicators; and operating environment indicators. We have formerly studied the application of both the semi-parametric EHM and non-parametric EHM to the survival probability estimation in the reliability field. The survival time in these models is dependent not only upon the age of the asset monitored, but also upon the condition and operating environment information obtained. This paper is a further study of the semi-parametric and non-parametric EHMs to the hazard and residual life prediction of a set of resistance elements. The resistance elements were used as corrosion sensors for measuring the atmospheric corrosion rate in a laboratory experiment. In this paper, the estimated hazard of the resistance element using the semi-parametric EHM and the non-parametric EHM is compared to the traditional Weibull model and the Aalen Linear Regression Model (ALRM), respectively. Due to assuming a Weibull distribution in the baseline hazard of the semi-parametric EHM, the estimated hazard using this model is compared to the traditional Weibull model. The estimated hazard using the non-parametric EHM is compared to ALRM which is a well-known non-parametric covariate-based hazard model. At last, the predicted residual life of the resistance element using both EHMs is compared to the actual life data.

Constructability implementation among Malaysian building contractors

The basic researches about constructability issue done in different countries demonstrate the potential power of this concept to affect the total goals of the construction projects which can lead to significant cost saving, time saving and better quality via considering the contractors’ construction experience in earlier construction project phases. The present research assesses the familiarity of Malaysian building contractors with constructability concept and activities; then it tests their general opinions on its implementation in different construction phases and projects. As the result, some descriptive studies are done on amount of contractors’ familiarity with this term among various kinds of contractors, projects and contracts which can illustrate constructability implementation level among Malaysian contractors. The results of this study show that Malaysian contractors are not all familiar enough with this term and there are still some barriers that prevent them from taking part in its activities completely. The differences in amount of familiarity with constructability matter and its terms of implementation are quite obvious among various types of participants.

Assessment of critical constructability activities among Malaysian building contractors

After the primary researches on constructability issue which were implemented in United States, United Kingdom and Australia, more explorations were applied on that in order to assess this unique scientific fact in East Asian country of Malaysia. Based on the latest researches done on constructability concept in Malaysia, the most Critical Constructability Activities (CCAs) are defined according to amount of contractors’ participation in each activity and amount of gap between actual and potential effects of each of them on achieving the overall objectives of the construction projects with more cost and time savings and better quality which is the whole aim of a beneficial constructability activity. The present research aims to assess the current findings on CCAs in order to identify the types of contractors and projects which these CCAs are getting performed in and also the types of contracts is used in these CCAs. Finally it was found that there are some significant differences in amount of contractors’ involvement in CCAs among various considered independent variables. This study uses the former researches to help Malaysian construction stakeholders to find out the barriers of constructability implementation in building projects via giving more details on application of CCAs among different IVs.

Asset renewal decision modelling with application to the water utility industry

Reliable infrastructure assets impact significantly on quality of life and provide a stable foundation for economic growth and competitiveness. Decisions about the way assets are managed are of utmost importance in achieving this. Timely renewal of infrastructure assets supports reliability and maximum utilisation of infrastructure and enables business and community to grow and prosper. This research initially examined a framework for asset management decisions and then focused on asset renewal optimisation and renewal engineering optimisation in depth. This study had four primary objectives. The first was to develop a new Asset Management Decision Framework (AMDF) for identifying and classifying asset management decisions. The AMDF was developed by applying multi-criteria decision theory, classical management theory and life cycle management. The AMDF is an original and innovative contribution to asset management in that: · it is the first framework to provide guidance for developing asset management decision criteria based on fundamental business objectives; · it is the first framework to provide a decision context identification and analysis process for asset management decisions; and · it is the only comprehensive listing of asset management decision types developed from first principles. The second objective of this research was to develop a novel multi-attribute Asset Renewal Decision Model (ARDM) that takes account of financial, customer service, health and safety, environmental and socio-economic objectives. The unique feature of this ARDM is that it is the only model to optimise timing of asset renewal with respect to fundamental business objectives. The third objective of this research was to develop a novel Renewal Engineering Decision Model (REDM) that uses multiple criteria to determine the optimal timing for renewal engineering. The unique features of this model are that: · it is a novel extension to existing real options valuation models in that it uses overall utility rather than present value of cash flows to model engineering value; and · it is the only REDM that optimises timing of renewal engineering with respect to fundamental business objectives; The final objective was to develop and validate an Asset Renewal Engineering Philosophy (AREP) consisting of three principles of asset renewal engineering. The principles were validated using a novel application of real options theory. The AREP is the only renewal engineering philosophy in existence. The original contributions of this research are expected to enrich the body of knowledge in asset management through effectively addressing the need for an asset management decision framework, asset renewal and renewal engineering optimisation based on fundamental business objectives and a novel renewal engineering philosophy.

A capability model to improve infrastructure asset performance

Infrastructure organizations are operating in an increasingly challenging business environment as a result of globalization, privatization and deregulation. In an external business environment that is constantly changing, extant literature on strategic management advocates the need to focus on factors internal to the organization such as resources and capabilities to sustain their performance. Specifically, they need to develop dynamic capabilities in order to survive and prosper under conditions of change. The aim of this paper is to explore the dynamic capabilities needed in the management of transport infrastructure assets using a multiple case study research strategy. This paper produced a number of findings. First, the empirical evidence showed that the core infrastructure asset management processes are capacity management, options evaluation, procurement & delivery, maintenance management, and asset information management. Second, the study identified five dynamic capabilities namely stakeholder connectivity, cross-functional, relational, technology absorptive and integrated information capability as central to executing the strategic infrastructure asset management processes well. These findings culminate in the development of a capability model to improve the performance of infrastructure assets in an increasingly dynamic business environment.