Understanding the Costs
If asset management is about providing the desired level of service at the lowest life cycle costs, the costs must be clearly understood. Typically, when costs are discussed, the focus is on financial costs, but that perspective is often too limited to fully understand the costs and benefits of any given asset are. Therefore, it is important to consider costs and benefits in both quantitative and qualitative terms.
Not only is it important to understand the full spectrum of costs and benefits for each asset, it is also important to understand how an asset’s functionality changes over time. Some assets decay over time. Some decay with use. Some improve in functionality over time. Some assets’ functionality improves, and then decays. These changes in functionality will impact the way the system looks at the financial planning for the asset.