Infrastructure projects a funding black hole without asset management

Death and taxes, they say, are the only two certainties in life.

Perhaps challenging for third place is the seeming inevitability that every budget — state or federal, will feature announcements of record-breaking commitments to investment in infrastructure. The promise of new roads, rail, bridges, and public facilities has obvious political appeal and there is also a powerful argument to be made that spending on infrastructure is the economically responsible way for governments to stimulate jobs and growth.

But with the federal budget colliding with a fiscal crisis, persistent inflation, and sagging growth we must ask: are we compounding the problem with inefficient and poorly managed assets?

By its nature, infrastructure needs to be rebuilt, expanded, retired and replaced. And, most importantly for information and communications technology infrastructure, it needs to be kept up to date.

There is no better example of that than technology infrastructure.

Imagine if we had not invested in upgraded telecommunications, or alternatively, look at the struggles of government agencies trying to meet citizens’ expectations using obsolete information technology.

While most government infrastructure investments are subject to some cost-benefit analysis in the planning stages, there is often little visibility into whether the build project is being managed in the most efficient way. Too often, governments have no way of accurately knowing how much recurrent cost has been added to their budgets from recent investment in infrastructure and assets, and no idea if money is being wasted.

Worse, poor assets management practices can risk damage to irreplaceable assets or even create risks to the public.

Modern asset management software means organisations can resolve these issues by giving real-time information on costs and maintenance from cradle to grave. This delivers the ability to identify and manage build processes much more effectively, avoiding the slipped timelines and budget blowouts that beset big projects.

With most organisations managing assets on numerous spreadsheets, the transition to these systems can unearth a few unwelcome surprises in the first instance.

Once the single source of truth is established, it not only captures the state of the assets and all associated characteristics, but it can also directly integrate into finance systems. In other words, the days of the information black hole are gone forever. Organisations — including governments — know exactly where every dollar is spent on new assets.

Private businesses have long understood the value of systems that provide detailed insights into asset management across their whole life, and many are leading the use of the next generation of these systems. Governments, with their diverse departments and agencies and annual budget pressures, have been slow to seize the opportunity.

The implementation of modern asset management systems across government will pay for themselves over time, but this would likely take years to achieve, even if it began immediately.

However, one way the Federal Government could speed up the process is by attaching a requirement that any asset or infrastructure project above $10 million in value must be supported by a modern system. With the fiscal management challenge we are in, getting started should be a matter of urgency.

Image credit: iStock.com/Onfokus