Capabilities for strategic infrastructure asset management

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(1)CAPABILITIES FOR STRATEGIC INFRASTRUCTURE ASSET MANAGEMENT . Eric G Too BSc Hons (NUS), MBA (Imperial College), MSc (Salford) . . Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Faculty of Built Environment & Engineering Queensland University of Technology 2009 .

(2) Capabilities for Strategic Infrastructure Asset Management . Page i . Keywords Asset Management Capability Infrastructure Asset Performance Resource-‐based View Strategic Management Strategic Infrastructure Asset Management Asset Information Management System Transport Infrastructure . 2009 Eric G Too . Page i .

(3) Capabilities for Strategic Infrastructure Asset Management . Page ii . Abstract Infrastructure organisations are operating in an increasingly challenging business environment as a result of globalisation, privatisation and deregulation. Under such circumstances, asset managers need to manage their infrastructure assets effectively in order to contribute to the overall performance of their organisation. In an external business environment that is constantly changing, extant literature on strategic management advocates a resourced-‐based view (RBV) approach that focuses on factors internal to the organisation such as resources and capabilities to sustain organisation performance. The aim of this study is to explore the core capabilities needed in the management of infrastructure assets. Using a multiple case study research strategy focusing on transport infrastructure, this research firstly examines the goals of infrastructure asset management and their alignment with broader corporate goals of an infrastructure organisation. It then examines the strategic infrastructure asset management processes that are needed to achieve these goals. The core capabilities that can support the strategic infrastructure asset management processes are then identified. This research produced a number of findings. First, it provided empirical evidence that asset management goals are being pursued with the aim of supporting the broader business goals of infrastructure organisations. Second, through synthesising the key asset management processes deemed necessary to achieve the asset management goals, a strategic infrastructure asset management . 2009 Eric G Too . Page ii .

(4) Capabilities for Strategic Infrastructure Asset Management . Page iii . model is proposed. Third, it identified five core capabilities namely stakeholder connectivity, cross-‐functional, relational, technology absorptive and integrated information management 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. . 2009 Eric G Too . Page iii .

(5) Capabilities for Strategic Infrastructure Asset Management . Page iv . Table of Contents Keywords .................................................................................................................................................................................i Abstract................................................................................................................................................................................... ii Table of Contents ............................................................................................................................................................... iv List of Figures ................................................................................................................................................................... viii List of Tables..........................................................................................................................................................................x List of Abbreviations ........................................................................................................................................................ xi Acknowledgments...........................................................................................................................................................xiii 1 CHAPTER 1: INTRODUCTION................................................................................................................. 1 1.1 Background ............................................................................................................................................................... 1 1.2 The Aim and Purpose of the Research........................................................................................................... 4 1.3 Significance of the Study...................................................................................................................................... 5 1.3.1 Academic Significance -‐ Theory Development........................................................................... 6 1.3.2 Practical Significance – Capability Diagnosis.............................................................................. 7 1.4 An Outline of the Research Process ................................................................................................................ 8 1.5 Structure of the Thesis .......................................................................................................................................10 2 CHAPTER 2: AN OVERVIEW OF INFRASTRUCTURE ASSET MANAGEMENT ..........................13 2.1 Introduction ............................................................................................................................................................13 2.2 Defining Infrastructure Asset ..........................................................................................................................14 2.3 The Nature and Characteristics of Infrastructure Asset......................................................................17 2.4 Challenges in the Provision of Infrastructure Assets ............................................................................20 2.5 Deregulation and Privatisation of Infrastructure Assets.....................................................................23 2.6 The Growing Importance of Asset Management.....................................................................................27 2.7 Development of the Asset Management Discipline................................................................................31 2.7.1 Barrier to Development -‐ Lack of Recognition.........................................................................36 2.7.2 Barrier to Development -‐ A Fragmented Discipline ..............................................................37 2.7.3 Barrier to Development -‐ Increasing Complexity ...................................................................41 2.8 The Research Gap .................................................................................................................................................45 2.8.1 Determining Strategic Asset Management Goals ....................................................................46 2.8.2 Identifying Core Asset Management Processes .......................................................................47 2.8.3 Identifying Capabilities for Asset Management.......................................................................49 2.9 Summary ..................................................................................................................................................................51 3 CHAPTER 3: A RESOURCE-BASED APPROACH TO STUDYING ASSET MANAGEMENT CAPABILITIES ...............................................................................................................................................53 3.1 Introduction ............................................................................................................................................................53 3.2 Strategy and Performance ................................................................................................................................54 3.3 A Resource-‐Based View of Performance ....................................................................................................58 3.3.1 Resources and Capabilities ...............................................................................................................59 3.3.2 Sources of Organisational Capabilities ........................................................................................63 3.4 Appropriateness of RBV for Infrastructure Organisation...................................................................65 . 2009 Eric G Too . 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(6) Capabilities for Strategic Infrastructure Asset Management . Page v . 3.5 Supply Chain Capabilities for Infrastructure Organisations ..............................................................69 3.6 A Conceptual Framework for Identifying Capabilities .........................................................................74 3.7 Summary ..................................................................................................................................................................84 4 CHAPTER 4: RESEARCH METHODOLOGY ........................................................................................86 4.1 Introduction ............................................................................................................................................................86 4.2 The Research Paradigm .....................................................................................................................................87 4.2.1 The Positivist Paradigm .....................................................................................................................89 4.2.2 The Interpretive Paradigm ...............................................................................................................90 4.2.3 The Critical Paradigm..........................................................................................................................91 4.2.4 Why an Interpretive Research Paradigm? .................................................................................92 4.3 Quantitative Vs Qualitative Research Approach .....................................................................................93 4.3.1 Why a Qualitative Research Approach? ......................................................................................95 4.4 Research Method ..................................................................................................................................................97 4.4.1 Why Case Study? ...................................................................................................................................98 4.5 Operationalising the Research.....................................................................................................................101 4.5.1 Phase 1: Literature Review............................................................................................................103 4.5.2 Phase 2: Preparation ........................................................................................................................104 4.5.3 Phase 3: Data Collection..................................................................................................................110 4.5.4 Phase 4: Data Analysis .....................................................................................................................116 4.5.5 Phase 5: Formulating Theoretical Propositions ...................................................................125 4.6 Validation – Justifiability and Transferability .......................................................................................128 4.6.1 Justifiability...........................................................................................................................................129 4.6.2 Transferability.....................................................................................................................................130 4.7 Summary ...............................................................................................................................................................132 5 CHAPTER 5: DEVELOPING A SIAM FRAMEWORK........................................................................ 134 5.1 Introduction .........................................................................................................................................................134 5.2 The Cases...............................................................................................................................................................135 5.3 Issues and Trends Affecting Infrastructure Organisations .............................................................137 5.4 The Goals of Infrastructure Asset Management...................................................................................141 5.5 Emerging Framework: The Strategic Infrastructure Asset Management (SIAM) Processes150 5.5.1 Capacity Management Process.....................................................................................................154 5.5.2 Options Evaluation Process...........................................................................................................157 5.5.3 Procurement & Delivery Process ................................................................................................161 5.5.4 Maintenance Management Process............................................................................................165 5.5.5 Asset Information Management Process .................................................................................168 5.6 Summary ...............................................................................................................................................................171 6 CHAPTER 6: CHALLENGES AND APPROACHES IN MANAGING SIAM PROCESSES: WITHIN- CASE ANALYSIS .......................................................................................................................................... 174 6.1 Introduction .........................................................................................................................................................174 6.2 Queensland Rail (QR).......................................................................................................................................176 6.2.1 Organisation & Operations ............................................................................................................176 6.2.2 The Capacity Management Process............................................................................................178 6.2.3 The Options Evaluation Process..................................................................................................186 6.2.4 The Procurement and Delivery Process...................................................................................192 6.2.5 Maintenance Management Process............................................................................................197 6.2.6 The Asset Information Management Process ........................................................................204 6.2.7 Summary of the QR Case.................................................................................................................209 6.3 Port of Brisbane (PortBris) ...........................................................................................................................210 . 2009 Eric G Too . 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(7) Capabilities for Strategic Infrastructure Asset Management . 6.3.1 6.3.2 6.3.3 6.3.4 6.3.5 6.3.6 6.3.7 . Page vi . Organisation and Operations ........................................................................................................210 The Capacity Management Process............................................................................................211 The Options Evaluation Process..................................................................................................219 The Procurement and Delivery Process...................................................................................224 The Maintenance Management Process...................................................................................229 The Asset Information Management Process ........................................................................235 Summary of the PortBris Case......................................................................................................239 . 6.4 Brisbane Airport Corporation (BAC) ........................................................................................................241 6.4.1 Organisation and Operations ........................................................................................................241 6.4.2 The Capacity Management Process............................................................................................242 6.4.3 The Options Evaluation Process..................................................................................................250 6.4.4 The Procurement and Delivery Process...................................................................................255 6.4.5 The Maintenance Management Process...................................................................................260 6.4.6 The Asset Information Management Process ........................................................................267 6.4.7 Summary of the BAC Case ..............................................................................................................272 6.5 Summary ...............................................................................................................................................................273 7 CHAPTER 7: CHALLENGES AND APPROACHES IN MANAGING SIAM PROCESSES: CROSS- CASE ANALYSIS .......................................................................................................................................... 274 7.1 Introduction .........................................................................................................................................................274 7.2 The Capacity Management Process ...........................................................................................................276 7.2.1 Challenges .............................................................................................................................................276 7.2.2 Approaches ...........................................................................................................................................278 7.3 The Options Evaluation Process..................................................................................................................282 7.3.1 Challenges .............................................................................................................................................282 7.3.2 Approaches ...........................................................................................................................................285 7.4 The Procurement & Delivery Process.......................................................................................................288 7.4.1 Challenges .............................................................................................................................................289 7.4.2 Approaches ...........................................................................................................................................292 7.5 The Maintenance Management Process ..................................................................................................295 7.5.1 Challenges .............................................................................................................................................295 7.5.2 Approaches ...........................................................................................................................................298 7.6 The Asset Information Management process........................................................................................302 7.6.1 Challenges .............................................................................................................................................303 7.6.2 Approaches ...........................................................................................................................................306 7.7 Summary ...............................................................................................................................................................310 8 CHAPTER 8: DISCUSSION OF RESULT - A SIAM CAPABILITY MODEL.................................... 312 8.1 Introduction .........................................................................................................................................................312 8.2 Capability for the Capacity Management Process ...............................................................................313 8.3 Capability for the Options Evaluation Process......................................................................................317 8.4 Capability for the Procurement & Delivery Process...........................................................................321 8.5 Capability for the Maintenance Management Process ......................................................................325 8.6 Capability for the Asset Information Management Process............................................................330 8.7 Original Contributions of Study: The SIAM Capability Model ........................................................335 8.8 Discussions and Verification of Research Findings ............................................................................337 9 CHAPTER 9: CONCLUSION................................................................................................................... 342 9.1 Introduction .........................................................................................................................................................342 9.2 Summary of Findings .......................................................................................................................................343 9.2.1 What are the goals of infrastructure asset management?................................................343 . 2009 Eric G Too . 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(8) Capabilities for Strategic Infrastructure Asset Management . Page vii . 9.2.2 What are the core processes in the management of infrastructure asset?...............343 9.2.3 What are the challenges of and the capabilities needed to manage the core processes? .............................................................................................................................................345 9.3 Implications for Practitioners ......................................................................................................................348 9.4 Limitation and Future Research..................................................................................................................353 9.5 Closing Comments.............................................................................................................................................356 BIBLIOGRAPHY.......................................................................................................................................... 357 APPENDICES ............................................................................................................................................... 383 Appendix A: Participant Consent Form..................................................................................................383 Appendix B: Stage 1 Interview Questions .............................................................................................385 Appendix C: Stage 2 Interview Questions .............................................................................................386 Appendix D: Job Titles of Interviewees ..................................................................................................388 . . 2009 Eric G Too . Page vii .

(9) Capabilities for Strategic Infrastructure Asset Management . Page viii . List of Figures Figure 2.1 Interdependencies of Infrastructure Components ......................................................................15 Figure 2.2 Classification of Infrastructure .............................................................................................................17 Figure 2.3 Methods to Commercialise Infrastructure Provision ................................................................27 Figure 2.4 Conflicting Demand of Infrastructure Stakeholders ...................................................................29 Figure 2.5 Demarcation of Roles and Scope of Asset Management ...........................................................44 Figure 3.1 Organisation Resources and Capabilities........................................................................................61 Figure 3.2 Demarcation of Role in Infrastructure Asset Management.....................................................75 Figure 3.3 Goals of Infrastructure Asset Management.....................................................................................76 Figure 3.4 Main Cluster of Asset Life Cycle ..........................................................................................................78 Figure 3.5 SIAM Processes Support its Goals ......................................................................................................79 Figure 3.6 Challenges in Executing SIAM Processes..........................................................................................82 Figure 3.7 A Conceptual Framework ......................................................................................................................83 Figure 4.1 The Research Process ..........................................................................................................................102 Figure 4.2 Example of Initial Broad Based Coding ..........................................................................................119 Figure 4.3 Tree Node to Categorise Concepts ...................................................................................................120 Figure 4.4 Example of Passage Coding .................................................................................................................121 Figure 4.5 Multi-‐Code in Single Passage ..............................................................................................................122 Figure 4.6 Multi-‐Passages in One Code ................................................................................................................122 Figure 4.7 Coding Strategy.........................................................................................................................................123 Figure 4.8 Coding Matrix ............................................................................................................................................124 Figure 4.9 Summary of Research Methodology...............................................................................................133 Figure 5.1 Trends Affecting Infrastructure Asset Management................................................................141 Figure 5.2 How Organisation Creates Value ......................................................................................................145 Figure 5.3 Goals of Infrastructure Asset Management..................................................................................146 Figure 5.4 Role of SIAM Processes within the Asset Management Function.......................................151 Figure 5.5 Strategic Infrastructure Asset Management (SIAM) Processes...........................................154 Figure 5.6 A Proposed SIAM Framework ............................................................................................................173 Figure 6.1 Challenges of the Capacity Management Process at QR .........................................................183 Figure 6.2 Approaches adopted by QR for the Capacity Management Process..................................186 Figure 6.3 Challenges of the Options Evaluation Process at QR................................................................189 Figure 6.4 Approaches adopted by QR for Options Evaluation Process................................................191 Figure 6.5 Challenges of the Procurement & Delivery Process at QR .....................................................194 Figure 6.6 Approaches adopted by QR for Procurement & Delivery Process .....................................196 Figure 6.7 Challenges of the Maintenance Management Process at QR.................................................201 Figure 6.8 Approaches adopted by QR for the Maintenance Management Process.........................203 Figure 6.9 Challenges of the Asset Information Management Process at QR......................................206 . 2009 Eric G Too . 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(10) Capabilities for Strategic Infrastructure Asset Management . Page ix . Figure 6.10 Approaches adopted by QR for the Asset Information Management Process............208 Figure 6.11 Summary of Challenges Faced and Approaches Adopted in Executing SIAM Processes at QR....................................................................................................................................................209 Figure 6.12 Forecast of TEUs Growth ...................................................................................................................213 Figure 6.13 Challenges of the Capacity Management Process at PortBris............................................215 Figure 6.14 Approaches adopted by PortBris for the Capacity Management Process ....................218 Figure 6.15 Challenges of the Options Evaluation Process at PortBris..................................................222 Figure 6.16 Approaches adopted by PortBris for the Options Evaluation Process ..........................224 Figure 6.17 Challenges of the Procurement & Delivery Process at PortBris .......................................226 Figure 6.18 Approaches adopted by PortBris for the Procurement & Delivery Process ...............228 Figure 6.19 Challenges of the Maintenance Management Process at PortBris...................................232 Figure 6.20 Approaches adopted by PortBris for the Maintenance Management Process ...........235 Figure 6.21 Challenges of the Asset Information Management Process at PortBris........................237 Figure 6.22 Approaches adopted by PortBris for Asset Information Management Process ........239 Figure 6.23 Summary of Challenges Faced and Approaches Adopted in Executing SIAM Processes at PortBris ........................................................................................................................................240 Figure 6.24 Challenges in Capacity Management Process at BAC ............................................................246 Figure 6.25 Approaches adopted by BAC for the Capacity Management Process.............................249 Figure 6.26 Challenges of the Options Evaluation Process at BAC ..........................................................252 Figure 6.27 Approaches adopted by BAC for the Options Evaluation Process...................................254 Figure 6.28 Challenges of the Procurement & Delivery Process at BAC................................................257 Figure 6.29 Approached adopted by BAC for the Procurement & Delivery Process .......................259 Figure 6.30 Challenges of the Maintenance Management Process at BAC ...........................................263 Figure 6.31 Approaches adopted by BAC for the Maintenance Management Process....................266 Figure 6.32 Challenges of the Asset Information Management Process................................................269 Figure 6.33 Approaches adopted by BAC for the Asset Information Management Process .........271 Figure 6.34 Summary of Challenges Faced and Approaches Adopted in Executing SIAM Processes at BAC .................................................................................................................................................272 Figure 7.1 Challenges and Approaches: Cross-‐Case Findings ....................................................................311 Figure 8.1 Capability for the Capacity Management Process .....................................................................317 Figure 8.2 Capability for the Options Evaluation Process............................................................................321 Figure 8.3 Capability for the Procurement and Delivery Process ............................................................325 Figure 8.4 Capability for the Maintenance Management Process ............................................................330 Figure 8.5 Capability for the Asset Information Management Process..................................................334 Figure 8.6 A Capability Model for SIAM ...............................................................................................................336 Figure 9.1 An Interpretive Model of Improving Performance of Infrastructure Organisation....349 . . 2009 Eric G Too . Page ix .

(11) Capabilities for Strategic Infrastructure Asset Management . Page x . List of Tables Table 2.1 Definitions of Asset Management..........................................................................................................39 Table 4.1 Main Research Paradigms ........................................................................................................................88 Table 4.2 Example to show the Saturation and Convergence of Findings summarised in a Table127 Table 5.1 Case Profile...................................................................................................................................................136 Table 5.2 Goals of Infrastructure Asset Management....................................................................................143 Table 5.3 Importance of the Capacity Management Process......................................................................157 Table 5.4 Financial Consideration in Options Evaluation ............................................................................158 Table 5.5 Criteria for Infrastructure Asset Evaluation..................................................................................160 Table 5.6 Maintenance Planning Methods..........................................................................................................167 Table 5.7 Computerised Asset Information Management System ...........................................................170 Table 6.1 Objectives of Stakeholders ....................................................................................................................179 Table 7.1 Summary of Challenges in the Capacity Management Process .............................................278 Table 7.2 Summary of Approaches adopted for the Capacity Management Process.......................281 Table 7.3 Summary of Challenges in the Options Evaluation Process....................................................285 Table 7.4 Summary of Approaches adopted for the Options Evaluation Process .............................288 Table 7.5 Summary of Challenges in the Procurement & Delivery Process.........................................291 Table 7.6 Summary of Approaches adopted for the Procurement & Delivery Process ..................294 Table 7.7 Importance of Condition Monitoring ................................................................................................296 Table 7.8 Summary of Challenges in the Maintenance Management Process ....................................298 Table 7.9 Summary of Approaches adopted for the Maintenance Management Process..............301 Table 7.10 Summary of Challenges in the Asset Information Management Process .......................305 Table 7.11 Summary of Approaches adopted for the Asset Information Management Process.309 Table 9.1Summary of Research Findings............................................................................................................347 . 2009 Eric G Too . Page x .

(12) Capabilities for Strategic Infrastructure Asset Management . Page xi . List of Abbreviations SIAM – Strategic Infrastructure Asset Management AIMS – Asset Information Management System SAM – Strategic Asset Management RBV – Resource Based View IOE -‐ Industrial Organisational Economics CIEAM -‐ CRC for Integrated Engineering Asset Management QUT – Queensland University of Technology GOC – Government Owned Corporation . 2009 Eric G Too . Page xi .

(13) Capabilities for Strategic Infrastructure Asset Management . Page xii . Statement of Original Authorship The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made. Signature: _________________________ Date: _________________________ . 2009 Eric G Too . Page xii .

(14) Capabilities for Strategic Infrastructure Asset Management . Page xiii . Acknowledgments Firstly, I would like to thank God for all things are ordained by His wisdom, subject to His will, sanctified by His blessing, according to His promises, and flowing from His love. Acknowledgements go to all the people who have been an integral part of this study. I would first like to thank my principal supervisor and mentor, Professor Martin Betts. Despite his heavy commitments in his capacity as Executive Dean of Faculty of Built Environment & Engineering, he has provided valuable advice, enthusiastic support and perceptive criticism at all stages of this study. My thanks also to Professor Arun Kumar, my associate supervisor, who provided me with his insight on the state of infrastructure asset management. Many thanks to Professor Stephen Kajewski, Head of School of Urban Development, and Professor Martin Skitmore, Discipline Leader of Project Management and Quantity Surveying, for granting me time off from my teaching to write up this thesis. Without their understanding and support, the completion would have taken a much longer time. My thanks also to Associate Professor Bambang Trigurnasyah for his encouragement and advice throughout the entire research process. The discussions we had provided me with a keener sense of self-‐ evaluation of my work. Special thanks to Professor Joseph Mathew, CEO of CRC CIEAM who awarded me a CIEAM Scholarship to complete this study. I am also grateful to . 2009 Eric G Too . Page xiii .

(15) Capabilities for Strategic Infrastructure Asset Management . Page xiv . Professor Kerry Brown, Research Theme Leader of CRC CIEAM, for her support and constructive comments. I am indebted to the many executives who participated in the case studies. Their generous sharing of their knowledge and experience has provided richer insights into this research. Their collective efforts have no doubt contributed to a better understanding of the practice of infrastructure asset management. Finally, I express my heartfelt gratitude to my wife, Linda, for her unlimited patience and encouragement throughout the entire study period. She is my intellectual sparring partner who at times had ruthlessly stretched my capacity for critical thinking and analysis of the research problem. I would not have made it without her. @@@@@@@@@@@@@@@@@@@@@@@@@@@@@ This thesis is dedicated to my daughters, Hannah and Emma. . 2009 Eric G Too . Page xiv .

(16) Chapter 1: Introduction . Page 1 . Chapter 1: Introduction . 1. “Life is like a box of chocolates, Forrest; you never know what you’re going to get.” Winston Groom (1994) . 1.1. BACKGROUND World-‐class infrastructure plays a vital role in encouraging a more . productive and competitive national economy (Hardwicke, 2005). In addition to supporting economic growth, the development of infrastructure systems is critical for the social development of a nation by providing comfortable lives (van der Mandele et al., 2006) and in many ways have made everyday life easier (Jonsson, 2005). Infrastructure is not only the glue that holds economic activity together, but it is an important economic activity in its own right. In Australia, infrastructure is a key component of the nation’s capital stock. The services from economic infrastructure account for more than 12% of GDP and employs 8.7% of the workforce (ABS, 2008). It is therefore vital that Australia’s infrastructure meet today’s need and through careful planning, maintenance and construction, tomorrow’s needs as well (Hardwicke, 2005). However, building and operating infrastructures consumes a large amount of resources (van der Mandele et al., 2006). The provision and development of infrastructure assets typically requires long lead times; significant planning; and the involvement of many stakeholders to ensure that the community is . © 2009 Eric G Too . Page 1 .

(17) Chapter 1: Introduction . Page 2 . appropriately consulted, and needs are prioritised within the funding constraints. Under these circumstances, asset managers are faced with a mounting challenge to manage and sustain these assets. In response to these challenges, an emerging theme that is being recognised in today’s ever changing business environment is the driving need for infrastructure organisations to increase their efficiencies and effectiveness in order to improve their delivery of services to their customers. These organisations need to maximise the investments they have made in their existing infrastructure assets in order to reduce their capital and operating expenditures and improve the organisation’s overall performance. In the quest to improve performance, many infrastructure organisations are beginning to adopt a holistic and integrated “asset management” approach in the management of infrastructure assets. For example, in Australia, “asset management” as a function was formally recognised in 1993 when the Australian Accounting Standard Board issued the Australian Accounting Standard 27 – AAS27 for public works. Standard AAS27 required government agencies to capitalise and depreciate assets rather than expense them against earnings. This development has indirectly forced organisation managing infrastructure assets to consider the useful life and cost effectiveness of asset investments. In this regard, asset management refers to the process of optimising return by scrutinising performance and making key strategic decisions throughout all phases of an assets life cycle (Sarfi & Tao, 2004). Despite the growing importance and increasing adoption of asset management by infrastructure organisations, the concept of asset management is . © 2009 Eric G Too . Page 2 .

(18) Chapter 1: Introduction . Page 3 . still evolving and can mean different things to different organisations. Each organisation, although similar in function, may have alternative processes, work practices and decision-‐making criteria that are unique to each organisation. Hence the adoption of asset management by infrastructure organisations has been fragmented. Consequently, asset management as a discipline is struggling to gain wider recognition and is often viewed by both practitioners and researchers as an operational function that does not enhance the bottom-‐line of the organisation. Current knowledge on asset management takes the forms of guidelines, reports, and best practices of asset management adopted by government organisations and industry practitioners. Hence, the literature tends to lack well-‐ grounded theories. To-‐date, while receiving relatively more interest and attention from empirical researchers, the advancement of this field, particularly in terms of the volume of academic and theoretical development is at best moderate. Thus there is a need to develop theories on how asset management can be adopted successfully to improve the performance of infrastructure assets. Extant literature in strategy suggests that to improve an organisation’s performance, there is a need to focus on factors internal to the organisation in addition to the industry structure. For example, Ravichandran et al. (2005) argued that the resource-‐based theory and its extensions with their focus on firm resources and capabilities can provide the appropriate theoretical lens to examine how factors internal to an organisation can be a source of competitive advantage. An organisation can only gain advantage and achieve superior performance when it has the right capabilities (Smallwood & Panowyk, 2005). Capabilities represent the . © 2009 Eric G Too . Page 3 .

(19) Chapter 1: Introduction . Page 4 . ability of the organisation to combine efficiently a number of resources to engage in productive activity and attain a certain objective (Amit & Schoemaker, 1993). To this end, the challenge for organisations is the optimal allocation of the scarce resources among competing initiatives to acquire relevant capabilities. Hence, it is of significant importance to identify the core capabilities that an organisation should develop that will make a difference in infrastructure asset performance. 1.2. THE AIM AND PURPOSE OF THE RESEARCH Against this backdrop, the aim of this research is uncover the main . managerial challenges of managing infrastructure assets and to identify the core capabilities that are necessary to deliver value and sustained asset performance. Stated formally, the research problem for this study is: How can infrastructure organisations improve the performance of their infrastructure assets and contribute value to their organisations? . Due to the current lack of research in this area, a qualitative or interpretive research approach will be adopted in which multiple case studies are conducted to develop a substantive theory of the core processes in infrastructure asset management. It also hopes to develop a capability model by identifying the capabilities that are needed to execute the core processes for effective management of infrastructure assets. The outcome of this research is a set of theoretical propositions to explain how infrastructure organisations can create value from the effective management of their infrastructure assets. . © 2009 Eric G Too . Page 4 .

(20) Chapter 1: Introduction . Page 5 . To understand the strategic potential of capabilities in improving the performance of infrastructure assets, this research will address the following research questions: 1). What are the goals of infrastructure asset management? . 2). What are the core processes in the management of infrastructure assets? . 3). What are the challenges faced and approaches adopted in executing these core processes well? . 4). What are the capabilities that are important to support these core processes? . 1.3. SIGNIFICANCE OF THE STUDY It is anticipated that by developing a capability model, infrastructure . organisations can invest their resources to acquire the right capabilities. With the right capabilities, infrastructure organisations can achieve better performance and create value not only for asset owners but the larger society. On the macro-‐level, improved infrastructure asset management enhances the credibility and accountability of infrastructure asset owners by achieving better value for their investment. As such, this research topic is pursued with the twin aims of contributing to theory development and current understanding of essential capabilities for infrastructure asset management. These contributions take two primary and interrelated forms: . © 2009 Eric G Too . Page 5 .

(21) Chapter 1: Introduction . Page 6 . 1.3.1 Academic Significance - Theory Development Asset management is an emerging discipline. A review of current literature shows that development of this discipline has been fragmented. This can be attributed to the applied nature of this topic that lends itself well to a multi-‐faceted approach. Researchers in this area have approached it from various angles ranging from finance, engineering, management to information technology. To this end, theoretical development in this area has been patchy and a unifying platform has yet to be found that would provide a base for an incremental building up of knowledge. Literature on infrastructure asset management is even more limited. Most have been confined to practitioner-‐based publications and theoretical development has been piece-‐meal. Consequently, this thesis represents a pioneering academic investigation into the practice of infrastructure asset management in Australia. It adopts a holistic and strategic approach by drawing together the available research on asset management and strategic management. There are two reasons for borrowing from other disciplines to build the theoretical framework and conceptualisations utilised in this study. First, the vacuum in existing theory in infrastructure asset management makes it difficult to construct theoretical frameworks directly from extant literature. Secondly, the relative poverty of such frameworks makes the use of frameworks and models from other disciplines a potentially rich and insightful source of theoretical development for infrastructure asset management . © 2009 Eric G Too . Page 6 .

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