Transportation Asset Management for Long-Term Sustainability, Accountability, and Performance

/Transportation Asset Management

Accountability

Beyond

The Short Term

Transportation Asset Management For Long-Term

Sustainability, Accountability and Performance

Beyond The Short Term

Transportation Asset Management

For Long-Term Sustainability, Accountability

and Improved Performance

Butch Wlaschin

Director

Office of Asset

Management

Message from the Director,

Transportation Asset Management (TAM) has long been recognized as a sound, long-term approach to

managing infrastructure. It provides decision makers with a rational, long-term systematic process for

making difficult and complex decisions about how to achieve the highest system condition levels for the

lowest cost, over the longest term.

TAM also is evolving to help transportation officials address two new challenges. TAM provides a

sound basis for demonstrating the long-term sustainability of current infrastructure practices. By using

TAM as an over-arching framework, transportation executives can demonstrate that they are making

decisions to sustain the transportation system to the best of their ability over the long term.

Also, TAM can demonstrate accountability. TAM relies upon strategic long-term goals, the pursuit of

measureable targets and the continuous evaluation of results. In this way, TAM not only produces short-

term performance metrics but it closely resembles "quality systems" such as Six Sigma which are

widely recognized as leading to improved performance. TAM can be the foundation for performance

measurement systems which assure not only short-term performance but also long-term sustainability.

This report re-examines TAM as an approach for sustainability and as a system for greater

accountability and improved performance. It also includes advice on Change Management practices to

elevate and expand TAM practices within a department of transportation.

Asset Management for Sustainability, Accountability and Performance i

Table of Contents

Executive Summary ...................................................................................................................... 1

Asset Management: Linking Accountability and Sustainability .............................................. 1

Leadership Driven................................................................................................................................................. 3

Performance Focused ............................................................................................................................................ 3

Transparent ........................................................................................................................................................... 4

Data-Driven .......................................................................................................................................................... 4

Formally Structured .............................................................................................................................................. 4

System Based ........................................................................................................................................................ 4

Chapter 1 Overview of Asset Management ................................................................................ 7

Asset Management Is a Strategic Approach ....................................................................................................... 11

TAM Breaks Down ‘Silos’ ................................................................................................................................ 11

Asset Management Relies on Good Information and Analytic Capabilities ....................................................... 12

Asset Management Practices Are Flexible ......................................................................................................... 12

Asset Management Works at Multiple Levels .................................................................................................... 12

People, Processes, Plans and Products ................................................................................................................ 12

Chapter 2 Key Agency Roles in Asset Management............................................................... 15

Policy, Strategy and Planning Establish Direction ............................................................................................. 15

Project Delivery Reliability is Key to Timely Asset Treatments ........................................................................ 17

The Importance of Maintenance Should Not be Overlooked in Asset Management .......................................... 18

Information and Analysis Rises in Importance in Asset Management ............................................................... 19

Leadership and Communication Link Strategy and Action in Asset Management ............................................ 19

NORTH CAROLINA DOT - A CASE STUDY IN LEADERSHIP, PERFORMANCE MANAGEMENT, ACCOUNTABILITY AND

ASSET MANAGEMENT .............................................................................................................................................. 21

Setting Direction ................................................................................................................................................. 22

Review and Continuous Improvement ................................................................................................................ 22

Leadership and Communication ......................................................................................................................... 23

Clear, Simple Common Mission and Goals ........................................................................................................ 23

Restructure and Realign ...................................................................................................................................... 24

Collaboration from Cradle-to-Grave ................................................................................................................... 24

Focus Resources in Strategic Planning and Asset Management ......................................................................... 24

Office of Asset Management .............................................................................................................................. 25

The North Carolina Multimodal Investment Network (NCMIN) ....................................................................... 26

Being Strategic in Selecting Projects and Services ............................................................................................. 27

Role of Data in Quality Processes ...................................................................................................................... 27

Asset Management for Sustainability, Accountability and Performance ii

Data Collection and Dissemination .................................................................................................................... 28

Aging Assets, Long Term Decisions and Asset Management ............................................................................ 28

Streamlining and Instituting On-site Project Scoping for Bridge Projects.......................................................... 29

Performance Tied to Mission and Goals ............................................................................................................. 29

Performance Management, Accountability and Asset Management .................................................................. 31

Effectiveness of Cascading Performance Measures ........................................................................................... 31

Role of Leadership Emphasized ......................................................................................................................... 22

Improving Assets through Changes in Preservation and Maintenance Strategies .............................................. 23

Outcomes of Better Asset Information and Forecasting ..................................................................................... 24

Summary: Leadership and Accountability Contribute to Successful Management of Transportation Assets .... 24

Chapter 3: Structures and Strategies for Asset Management ................................................ 25

Structure or Process? .......................................................................................................................................... 26

The Critical Role of the Leader in Asset Management ....................................................................................... 30

Interlocking Decisions ........................................................................................................................................ 32

Resource Allocation Processes ........................................................................................................................... 33

UTAH DOT CASE STUDY - EMBRACING NEW STRUCTURES AND STRATEGIES FOR ASSET MANAGEMENT .............. 35

Utah’s Asset Management Beginnings ............................................................................................................... 35

Performance Management Linkage .................................................................................................................... 36

Creating an Asset Management Structure ........................................................................................................... 36

Lessons Learned: Engagement and Evolution .................................................................................................... 37

Strategies for Adaption ....................................................................................................................................... 39

Toward Comprehensive Asset Management ...................................................................................................... 40

LESSONS .................................................................................................................................................................. 42

Chapter 4 Information Needs for Asset Management............................................................. 43

Organizational Direction Information ................................................................................................................. 44

Organizational Competency Information ............................................................................................................ 45

Organizational Asset Data .................................................................................................................................. 46

Analysis for Asset Management ......................................................................................................................... 47

SUMMARY OF ASSET MANAGEMENT DEVELOPMENT IN OREGON ............................................................................ 49

Achieving Organizational Direction ................................................................................................................... 49

Change Management and the Asset Management Communication Plan ............................................................ 53

Organizational Competency Information ............................................................................................................ 53

Implementation Plan to Close the Competency Gap .......................................................................................... 53

Developing Organizational Asset Data ............................................................................................................... 54

Asset Management Steering Committee ............................................................................................................. 54

Decision Support: People and Tools ................................................................................................................... 56

Asset Management for Sustainability, Accountability and Performance iii

A Way of Doing Business .................................................................................................................................. 56

‘Words of Wisdom’ in Developing an Asset Management Process ................................................................... 56

Chapter 5 Asset Management as A ‘Quality’ Framework...................................................... 57

Development of "Quality Systems" .................................................................................................................... 58

Asset Management and Other Quality Systems .................................................................................................. 59

Asset Management as a Form of Performance Management .............................................................................. 61

Short-Term and Long-Term Perspectives ........................................................................................................... 63

Asset Management And Similarities to the Baldrige Process ............................................................................. 65

The Balanced Scorecard Can Complement Asset Management ......................................................................... 67

Six Sigma as a Subsystem Within Asset Management ....................................................................................... 68

ISO, International Organization for Standardization .......................................................................................... 69

Summary ............................................................................................................................................................. 70

EXAMPLES OF ASSET MANAGEMENT PRACTICES COMPLEMENTING “QUALITY” SYSTEMS IN LEADING

TRANSPORTATION AGENCIES ................................................................................................................................... 70

New Zealand ....................................................................................................................................................... 70

Swedish Road Authority ..................................................................................................................................... 71

Queensland, Australia ......................................................................................................................................... 71

New South Wales ............................................................................................................................................... 72

Florida Department of Transportation Office of Materials ................................................................................. 74

MISSOURI DOT PERFORMANCE MANAGEMENT CASE STUDY ................................................................................. 77

Complementary Systems .................................................................................................................................... 78

MoDOT's Story - Changing a Culture to Embrace Accountability .................................................................... 80

Tracking Performance ......................................................................................................................................... 80

Keeping It Simple ............................................................................................................................................... 82

Resource Optimization ....................................................................................................................................... 83

The Role of Maintenance .................................................................................................................................... 84

Increased Efficiencies as an Investment Strategy ............................................................................................... 85

Lessons Learned from MoDOT .......................................................................................................................... 85

Chapter 6 Summary and Conclusions ...................................................................................... 87

MARYLAND STATE HIGHWAY AGENCY CASE STUDY .............................................................................................. 90

Pavement Performance and the Organization ..................................................................................................... 90

Allocations and Project Selection ....................................................................................................................... 91

Performance Measures and Asset Management Results ..................................................................................... 91

Information and Analysis .................................................................................................................................... 92

Decision support: People and Tools ................................................................................................................... 92

Collaborative Decision Making and Support ...................................................................................................... 93

Asset Management for Sustainability, Accountability and Performance iv

Achieving Organizational Commitment ............................................................................................................. 94

Ownership and Accountability ........................................................................................................................... 94

A Way of Doing Business .................................................................................................................................. 94

Communication with Stakeholders ..................................................................................................................... 94

Future Initiatives ................................................................................................................................................. 95

Asset Management for Sustainability, Accountability and Performance 1

Executive Summary

Asset Management: Linking Accountability and Sustainability

ransportation agencies face increasing pressures

from Congress and state legislatures to

demonstrate results, accountability and transparency

in their management of highway assets. The National

Surface Transportation Policy and Revenue Study

Commission issued a clarion call for performance

accountability in the federal transportation programs.

Senior members of Congress are examining how to tie

federal transportation spending to state accountability.

The Government Accountability Office called for

greater linkage between federal transportation

expenditures and transportation agency results.

As transportation agencies consider how to respond to

these calls for accountability and transparency, the

appeal of Transportation Asset Management (TAM)

becomes increasingly apparent. Asset Management

provides agencies with a proven framework to

demonstrate long-term accountability and

accomplishment in the management of highway

networks. As Asset Management matured in the past

decade, it became increasing clear to its practitioners

that it provides a systematic, data-driven and

continually improving framework for managing

assets. In this maturation, Asset Management has

come to closely resemble many other "quality

systems" that major corporations use to meet customer

goals, achieve performance targets and to continually

improve their products. "Quality Systems” such as

ISO, Six Sigma, the Balanced Scorecard, Baldrige,

Total Quality Management and Performance

Management all have elements which resemble Asset

Management. All of these systems rely on variants of

the famous “Plan, Do, Check, Act” processes first

recommended by “quality” guru W. Edwards Deming

in the 1950s and 1960s, and shown in Figure 1 on

page 3. His writings lie at the heart of most major

“quality” programs in use globally today. General

Electric uses Six Sigma to ensure the quality of its jet

engines. Award-winning hospitals rely on the Baldrige

Process to ensure high levels of patient care. More

than 17,000 ISO standards were developed to ensure

quality in technical processes. A highway agency's

embrace of Asset Management allows it to

demonstrate that strategies similar to those which

ensure the success of Fortune 500 companies ensure

Asset

management

provides the

linkage

between a need

to demonstrate

short-term

performance

while also

ensuring long-

term

sustainability

of highway

assets.

Asset Management for Sustainability, Accountability and Performance 2

the long-term, sustainable quality of its highway

network.

As these "quality" systems do for major corporations,

Asset Management does for transportation agencies. It

helps them manage scarce resources, articulate

rational investment policies, measure the effects of

past decisions and provide alternative scenarios to

improve future performance. Asset Management

allows highway agencies to document that their

investment of scarce resources is made within a

logical, comprehensive and systematic framework.

Agencies that use Asset Management are so data

driven, results focused and policy based, that, for

them, producing performance metrics to demonstrate

results is practically incidental. The agency officials

reviewed in the following case studies expressed little

trepidation about producing performance metrics

because their Asset Management frameworks produce

metrics as a matter of course.

This report addresses three major areas of Asset

Management.

First, it examines asset management as a framework

for demonstrating accountability - both in the short-

term management of current transportation programs

but also for the long-term sustainability of a state

highway network. In describing Asset Management as

a framework for demonstrating accountability, this

report also spends considerable time addressing

similarities and differences between Asset

Management and Performance Management. To the

uninitiated, the differences between the two

management frameworks or philosophies may not be

clear. The growing movement for accountability has

led to a significant emphasis upon Performance

Management and this report examines how it and

Asset Management complement and enhance each

other. The report also briefly compares and contrasts

Asset Management to the other highly respected

quality systems such as the Balanced Scorecard, ISO

and Six Sigma.

Second, this report examines successful organizational

structures and leadership strategies for instilling Asset

Management into transportation agencies.

Implementing Asset Management requires much more

than buying a new software package or adopting new

terminology. It involves creating new cross-cutting

collaboration between traditionally separate

disciplines within a highway agency. When a

highway agency is optimally structured or managed to

fully capitalize on Asset Management, the formerly

separate functions of planning, design, construction,

maintenance and information technology all must

work together more closely. Instead of operating

strictly within their own silos, they need to collaborate

to carefully manage assets throughout each phase of

the asset’s life. Successfully creating such cultural

and organizational change requires skills in areas such

as Change Management, Organizational Com-

munication and Organizational Theory. These fields

are seldom discussed in transportation literature but

their practice can be essential to change the approach,

the attitude and the culture of large organizations

which are trying to embrace Asset Management.

Shifting the direction of a large organization requires

consistent, sustained leadership, communication,

education and the creation of a common consensus

among the different subcultures within a large

organization.

Third, this report examines case studies of successful

Asset Management programs across the United States

and internationally. Although these transportation

agencies differ significantly in their size, political

structure, and resources, certain principles of how to

instill Asset Management within them appear to be

universal. Examples as diverse as North Carolina,

Sweden, New Zealand, Utah, Maryland, Australia

and Oregon are examined. Despite the significant

geographic, cultural and governmental differences

between these examples, their underlying strategies

for successfully ingraining Asset Management into

their organizations are strikingly similar.

Management trends come and go, creating a degree of

skepticism among some that the lasting benefits of

them may not be worth the effort to adopt them.

However, the results of Asset Management are

difficult to dispute, particularly during an era of

accountability.

• In Utah, the agency has successfully convinced its

Legislature and its Transportation Commission of

its sound stewardship by demonstrating the

systematic and comprehensive way it manages

the state’s highway assets. As a result, Governing

magazine rates it an A for infrastructure

Asset Management for Sustainability, Accountability and Performance 3

• management and its Legislature has bestowed

unprecedented levels of funding upon the agency;

• In New Zealand, the national transportation

agency has ingrained Asset Management into

legislation. Now, it is a basic principle of

national transportation policy that assets should

be preserved at a high level, and be sustained into

the future. More than 98 percent of the New

Zealand pavements meet smoothness targets;

• In North Carolina, the Department of Trans-

portation has successfully made organizational

changes to improve and sustain the performance

and condition of its assets to meet the needs of the

century. It has aligned and assigned

ownership, roles, responsibility and

accountability for performance of the system

across business units, eliminating silos and

forcing collaboration. Accountability for system

performance is clear and transparent, starting at

the highest level and cascading down to all

employees. These approaches have been

integrated into the agency’s day-to-day operations

and are expected to continue irrespective of

changes to the leadership of the agency.

• In New South Wales, Australia, the state

transportation agency has ingrained Asset

Management into all levels of its operations. It

produces a Total Asset Management Plan which

functions like a parallel budget document to

ensure that agency expenditures and agency

efforts achieve its long-term Asset Management

targets. It has sustained 87 percent of its

pavements in good ride condition for at least a

decade, and is forecast to maintain those levels

into the future. It reports having only one load-

limited bridge in its populous and urbanized state.

• In Sweden, the nation’s Road Authority has used

Asset Management and a Balanced Scorecard

framework to keep more than 95% of major

routes above acceptable pavement targets for

more than a decade despite its harsh climate and

diminishing purchasing power.

• The Oregon DOT has developed a comprehensive

asset management process which guides decision

making while also providing legislators with

performance information to assure them of the

agency's direction.

These diverse agencies relied on several common

management tactics for deploying Asset Management

into their agencies.

Leadership Driven

In all of the examples, the use of Asset Management

has evolved from an isolated technical or planning

effort to a department-wide focus which was

embraced by senior leadership. The leadership

impetus came in different forms. In some cases, it

came from a strong individual executive who was

personally committed to Asset Management. In other

cases, strong legislative emphasis led to the embrace

of Asset Management. While there are variations

across agencies, it is clear that a strong leadership

focus underlies sustained efforts to adopt Asset

Management.

Performance Focused

Another key finding is that departments that have

successfully embraced Asset Management tend to

have a strong systems approach to managing. That is,

the department has embraced the Goal-Setting-and-

Performance-Measurement processes inherent in the

"quality systems" such as Six Sigma or ISO. In most

of these cases, the focus upon systematically

measuring and improving assets conditions was not

unique. Similar strategies were applied to other

Figure 1 The "Plan, Implement, Evaluate, Act" cycle is

inherent in "quality systems" and is essential in asset

management as well.

Asset Management for Sustainability, Accountability and Performance 4

department functions such as reducing crashes,

delivering projects, or responding to customers. It

appears that once Asset Management is ingrained in

an agency, expanding a performance focus to other

agency programs becomes simpler.

Transparent

A strong sense of transparency seems to accompany

agencies that have embraced Asset Management.

These agencies were able to document to the public

and to policy makers that they have embraced a

rational, systematic, long-term approach to managing

assets, often for the lowest life-cycle costs.

Data-Driven

The journey to long-term Asset Management has led

to a steady improvement in inventory data and

forecasting tools. As the agencies become more

focused upon asset performance, they become more

data hungry and tend to improve their asset

inventories and data systems.

Formally Structured

Formality marked many Asset Management systems.

Asset Management was rooted in official policies,

ingrained into agency standards, manifested in agency

manuals and articulated in agency publications.

System Based

Although the management structures of these agencies

vary widely, they appear to have evolved similar

management strategies including the primary strategy

of adopting a systems approach to managing their

agencies. In these states and countries, the Asset

Management framework does what virtually all

management systems are supposed to do – it provides

a process, a logic, and a feedback cycle to

methodically and comprehensively get things done

with ever-improving results. By adopting Asset

Management, these agencies find themselves well

positioned to respond to the growing demands for

performance and accountability.

This report does not replicate the excellent work in the

Asset Management Guide, either the earlier 2002

guide or the current update. Nor does it seek to

supplant any technical or procedural guidance on

Pavement Management, Bridge Management or

Maintenance Management. It relies very little on

engineering but instead addresses organizational

change management, institutional communication,

organizational theory and systems approaches to

managing. It examines the management strategies, the

organizational structures and information needs of

transportation executives who seek to lead their

agencies to the next generation of Asset Management.

The Asset Management Guide and its related reports

explain the “what” of implementing Asset

Management. This report examines “how” executives

have instilled Asset Management and its related

practices within their departments. It also explains

how in an era of accountability, they can rely on Asset

Management to demonstrate their agency's efficiency,

effectiveness and transparency.

Asset Management for Sustainability, Accountability and Performance 5

Table 1 The table provides definitions for the management systems commonly referenced in this report.

Management Frameworks Defined

Asset Management is a strategic and systematic process of operating, maintaining, upgrading and expanding

physical assets effectively throughout their lifecycle. It focuses on business and engineering practices for

resource allocation and utilization, with the objective of better decision making based upon quality information

and well defined objectives.

Pavement Management provides decision makers at all management levels with optimum strategies derived

through clearly established rational procedures. A Pavement Management System evaluates alternative

strategies over a specified analysis period on a basis of predicated values of quantifiable attributes, subject to

predetermined criteria and constraints.

Bridge Management includes the establishment of optimal investment funding levels and performance goals for

an inventory of bridges, as well as identification of the appropriate combinations of treatment scope and timing

for each individual bridge over the lifecycle.

Performance Management is an on-going process which translates strategic goals into relevant and detailed

measures which are then tracked to ensure uniform achievement of institutional goals. Performance

Management Systems include an "institutional learning" function in which the agency analyzes the root cause of

failure or success to achieve its performance targets, and disseminates the lessons of that analysis to perpetuate

continuous improvement.

Asset Management for Sustainability, Accountability and Performance 6

Asset Management for Sustainability, Accountability and Performance 7

Chapter 1 Overview of Asset Management

To devise the best organizational structure and the best

leadership strategies for Transportation Asset

Management, it is important to first understand all the

functions which comprise this discipline. This section

summarizes the basic functions of Transportation Asset

Management as described in the Asset Management

Guide and other documents. Much of the description

relates to Pavement Management as an illustrative

example of Asset Management. However, the general

principals could apply to any asset, not just pavements.

As the Asset Management Guide notes, transportation

asset management is a strategic approach to managing

physical transportation infrastructure. It became a

focus in the 1990s after the earlier development of

Pavement Management, Bridge Management,

Maintenance Management, Fleet Management and

even Facilities Management systems. Each of these

processes applies a systems approach to managing not

only individual assets but also the entire class of assets

for the lowest, long-term, life-cycle cost.

The term Asset Management can be ambiguous to both

the uninitiated as well as those who are familiar with

these earlier management systems. To the uninitiated,

Asset Management can be vague because it is named

after two generic words, “Assets” and “Management.”

It is described in general ways which could refer to

many systematic processes. To the non-transportation

specialist, the descriptions of “good” Asset

Management sound like the description of just “Good

Management.” Both rely on effectively executing a

logical strategy to achieve the highest returns for an

organization. To the experienced transportation

practitioner, it can be difficult to differentiate Asset

Management from the earlier systems such as

Pavement Management, Maintenance Management and

Bridge Management. A comparison of the definitions

in Table 1, page 5, illustrates the similarities.

Further complicating the dialogue is the increasing

focus upon “Performance Management.” In this report,

Performance Management is defined “as an on-going

process which translates strategic goals into relevant

and detailed measures and targets which are then

tracked to ensure uniform achievement of institutional

goals.”

Performance management relies heavily on the use of

performance measures to assess whether the

Asset

management

can provide a

framework for

transportation

agencies to

manage their

resources, both

their physical

resources and

also their

human and

informational

resources.

Asset Management for Sustainability, Accountability and Performance 8

organization is achieving its goals. It also has an

“institutional learning process” built in because it

requires continuous analysis of results and root-cause

evaluation of why results were not achieved. From that

analysis, adjustments can made to improve

performance.

Performance Management for federal agencies is

required in the 1993 Government Performance and

Results Act, although the Act’s requirements did not

extend to states. Performance management was

strongly recommended for the federal transportation

program in the 2007 National Surface Transportation

Policy and Revenue Study Commission Report and it

has been an increasing focus of AASHTO. So in

addition to the original pavement and bridge

management systems and Asset Management, the

transportation community is now also coming to grips

with “Performance Management.”

In many ways description rather than definition helps

to clarify Asset Management. Transportation Asset

Management applies a “rational and comprehensive”

approach to managing pavements, bridges and other

assets.

As the Asset Management Guide says,

“At its core, asset management deals with an agency’s

decisions in resource allocation and utilization in

managing its system of transportation infrastructure.

Asset management is a way of looking at an agency’s

“way of doing business” to see if there are better ways

to reach decisions in infrastructure management – for

instance, by basing decision methods and criteria on

current policy guidance, considering a range of

alternatives, focusing on outcomes of decisions, and

applying more objective information to decisions.”

Asset Management has been defined as,

“… a strategic and systematic process of operating,

maintaining, upgrading, and expanding physical assets

effectively throughout their lifecycle. It focuses on

business and engineering practices for resource

allocation and utilization, with the objective of better

decision making based upon quality information and

well defined objectives.”

The antithesis of Asset Management is neglect of

assets until they deteriorate and require reactive

maintenance treatments to restore at least minimal

functionality without regard to long-term need or

performance. Instead, Asset Management is about

applying policies, forecasts, tradeoffs and economic

optimization to comprehensively manage an inventory

of assets. Asset Management is distinguished by being:

Policy-driven—Resource allocation decisions are

based on a well-defined set of policy goals and

objectives.

Performance-based—Policy objectives are translated

into system performance measures that are used for

both day-to-day and strategic management.

Analysis of Options and Tradeoffs—Decisions on

how to allocate funds within and across different types

of investments (e.g., preventive maintenance versus

rehabilitation, pavements versus bridges) are based on

an analysis of how different allocations will affect

achievement of relevant policy objectives.

Decisions Based on Quality Information—The

merits of different options with respect to an agency's

policy goals are evaluated using credible and current

data.

Monitoring Provides Clear Accountability and

Feedback—Performance results are monitored and

evaluated for both efficiency and effectiveness.

The general principles of asset management are

similar, whether the assets involved are pavements,

bridges, roadside features, or even facilities. By using

pavement management as an example, the following

steps illustrate the type of methodical, systematic and

cyclical steps inherent within Asset Management.

First, a target level of service or performance goal for

pavements is set. This target or goal usually is based on

customer requirements, such as the degree of

smoothness customers desire balanced against the

available budget.

Second, the inventory of pavements is developed, if

one does not already exist, and current conditions are

assessed against the desired targets.

Third, an economic-tradeoff analysis is conducted at

the program level to determine what is the estimated

Asset Management for Sustainability, Accountability and Performance 9

optimum amount to invest in pavements to achieve the

highest economic return. Investing too little will lead to

degradation of pavement conditions which will be

more expensive in the long term to repair. Investing too

much draws essential resources from bridges, safety,

maintenance, capacity and other important needs. This

tradeoff can be conducted through a state-of-the-art

optimization software program or it can be a much

simpler straight-line forecast based off of the pavement

inventory and past expenditure levels. Either way, it

begins with a logical economic evaluation of the

amount that should be budgeted for pavements.

Fourth, once the optimum amount of pavement

spending is estimated, a rational analysis is conducted

to allocate funds among preventive maintenance,

reactive maintenance, rehabilitation and pavement

replacement categories. Preferably, each category’s

spending levels would be predicated upon a highest

Return on Investment analysis. If such a formal

analysis is not possible, engineering judgment and past

experience can be relied upon.

Fifth, once pavement sections are selected for

treatment, the actual treatment would be based upon a

rational analysis of the individual pavement to provide

it the lowest-cost treatment at the right time. The

pavement’s place on the Pavement Deterioration Curve

would be located and the appropriate preventive,

reactive, rehabilitative or replacement treatment would

be selected.

Sixth, once the pavement was brought to good

condition, a planned and rational multi-year preventive

maintenance schedule would be identified, and then

executed.

Seventh, the pavement’s performance would be

assessed annually and adjustments made in its

treatment schedule to provide the highest Remaining

Service Life.

Eighth, if the pavement fails to perform as expected, a

root cause analysis would be conducted so the agency

can learn from the poor performance and can take

corrective action so it is not repeated.

Ninth, the attributes of that pavement’s performance

and treatment costs would be fed into a Pavement

Management System to continually assess if pavement

goals were met and if adjustments need to be made to

achieve overall pavement goals, expenditures or

strategies.

In a fully developed Transportation Asset Management

environment, similar rational and comprehensive

approaches would be taken for the bridges,

maintenance items, the department’s fleet, its

equipment, and even its human resources. Figure 2

above illustrates the basic steps within Transportation

Asset Management. Similar steps would be taken for

any individual class of assets, as well.

In short, Asset Management is a comprehensive,

rational, systems approach to managing pavements,

bridges and other transportation assets.

Haas and Hudson speak in similar terms when

describing pavement management.

“Good pavement management is not business as usual.

It requires an organized and systematic approach to

the way we think and in the way we do day-to-day

business. Pavement management, in its broadest

sense, includes all activities involved in the planning

Haas and Hudson, 1994, pg. 4.

Figure 2 The asset management process includes a

continuous and systematic setting of goals and

evaluating of results.

Asset Management for Sustainability, Accountability and Performance 10

and programming, design, construction, maintenance,

and rehabilitation of a pavement portion of a public

works program. A pavement management system

(PMS) is a set of tools or methods that assist decision

makers in finding optimum strategies for providing and

maintaining pavements in a serviceable condition over

a given period of time. The function of PMS is to

improve the efficiency of decision making, expand the

scope, provide feedback on the consequences of

decisions, facilitate the coordination of activities within

the agency, and ensure the consistency of decisions

made at different management levels within the

organization.”

Nearly 50 years ago, a renowned Yale economist

named Charles E. Lindblom wrote a famous public

sector management article in which he argued that

most public agency decisions are not based on rational

and comprehensive analysis, such as that described by

Haas or the Asset Management Guide. Lindblom

argued that instead, decisions generally are based on

narrow, incremental changes to past practice, or

“muddling through.”

The advent of powerful scenario-producing informa-

tion systems such as travel-demand models, pavement

management systems, HERS-ST, Pontis, and many

maintenance management systems now allow

transportation policy makers to run numerous

forecasting scenarios. They can routinely evaluate

different investment levels and different investment

mixes between programs to seek the optimum program

budgets and strategies. The “rational and

comprehensive” decision-making process that evaded

Lindblom’s peers now is available to transportation

executives for many of their most-important

infrastructure decisions.

He wrote in 1959 that the

complexities of conducting a rational, comprehensive

analysis of many alternatives was generally so difficult

and expensive that public agencies could not afford it.

Instead, they tended to make minor, incremental

changes to past practice as a means of “muddling

through” their policy-making process.

In the absence of sound Asset Management, the

Lindblom, Charles E., The Science Of Muddling

Through, in Public Administration Review, Vol. 19,

pp. 79-88, 1959

following conditions are likely to be found, much in

the manner described by Lindblom:

• Investment levels for various programs are based

upon outdated formulas, geographic splits,

political compromises or simple past practice;

• Bridges, pavements and maintenance assets are

not treated systemically with an optimum mix of

timely preventive and reactive treatments;

• The department lacks a clearly defined set of

goals for where it wants its system conditions to

be and it lacks strategies for how it will get there;

• Planning, design, construction, maintenance and

information technology lack adequate coordin-

ation and take a “silo” approach to their role in

managing assets;

• In other words, an agency “muddles through” its

infrastructure-management process.

Asset Management therefore relates to improving

existing agency functions such as long-range planning,

short-range programming, scheduling of maintenance

and the delivering of projects. These functions clearly

are not new. What is new in an Asset Management

approach is that they are conducted in a tightly

coordinated fashion to ensure they result in the highest-

system conditions for the lowest cost over the life of

the department’s infrastructure planning horizon.

Asset Management should not be viewed as yet another

new program, requiring another new bureaucracy.

Rather, Asset Management is a “way of doing

business.” It brings a particular perspective to how an

agency conducts its existing procedures, reaches

decisions, and applies its information technology

capabilities. It suggests principles and techniques to

apply in policymaking, planning, project selection,

program tradeoffs, program delivery, data gathering,

and management system application.

There is no one correct table of organization and no

one correct set of performance measures that will

guarantee a successful Asset Management program.

However, there are a variety of common functions

which need to occur in an Asset Management structure.

Leaders seeking to instill Asset Management in their

organizations will have to decide how best to

coordinate these functions.

Asset Management for Sustainability, Accountability and Performance 11

Asset Management Is a Strategic

Approach

Asset Management requires a strategic approach to

managing a department’s infrastructure. A strategic

perspective takes a long view of infrastructure

performance and cost, and considers options in a

comprehensive, proactive, and informed way. It is

driven by policy goals and objectives and relies on

systematic assessments of asset performance and cost

in making decisions on future actions.

An agency which practices sound Asset Management

has well-defined policies that can be related to clear

objectives and measures of performance. Management

emphasizes customer service and accountability for

system performance and cost effectiveness. Decisions

on allocating resources are policy driven and

performance-based, consider a range of alternatives,

have clear criteria for decision making, and investigate

the most cost-effective solutions through analyses of

tradeoffs.

TAM Breaks Down ‘Silos’

Asset management encompasses a number of business

processes related to infrastructure management in

DOTs, including those related to planning, program

development, design, construction, maintenance,

information technology and knowledge management.

The functions of planning, design, construction,

maintenance and information technology work through

common, coordinated processes to ensure that each

contributes to asset management, without encumbering

the other. The “sub-optimization” that can occur within

silos is prevented through effective communication and

coordination strategies. The business processes are

managed to elicit effective contributions from all levels

of the organization, and to foster communications on

Asset Management needs and accomplishments both

within and outside the agency. The organizational

roles of each unit are clear, but also clear is the shared

requirement that each unit coordinates with and

complements the other. For instance, if maintenance

has responsibility for crack sealing of pavements, it

understands that role and executes it in a timely and

appropriate manner in the pavement’s lifecycle. Design

provides plans on time to provide treatments when

needed. Information technology understands the

information needs of the other functions and provides

0.8

0.82

0.84

0.86

0.88

0.9

0.92

0.94

0.96

0.98

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Percent of Networkk Acceptable

Pavements Trends Compared to Goal

Condition Goal

Figure 3 The ability to illustrate future trends and the results of current practices allows asset management

practitioners to demonstrate the consequences of current decisions.

Asset Management for Sustainability, Accountability and Performance 12

the data they require. In short, the units function in a

coordinated fashion to execute the thousands of

individual steps required. Management authors

sometimes refer to this as “Horizontal Alignment,”

which often does not occur in large organizations

without specific effort from the senior leadership.

Asset Management Relies on

Good Information and Analytic

Capabilities

Quality information – accurate, complete, timely – is

important at all stages of Asset Management.

Information technology is a practical necessity in

supporting Asset Management. A sound Asset

Management program relies on information regarding

past asset performance, remaining service life, the

expected performance of treatments and a forecast of

future trends. The needed trend forecasts must address

not only expected infrastructure performance but also

future resource availability. Information is needed in

standard reports for system-wide performance. Also

innumerable ad hoc reports are required for front-line

managers seeking to optimize their short-term

performance of individual assets.

Asset Management Practices Are

Flexible

Successful Asset Management practices vary

considerably across the nation because of the significant

differences between how states are organized and

governed. Asset Management performance measures,

data systems and analytical tools also vary widely

because of the disparate development of information

systems over the decades. No two states have the same

legal structure, span of responsibility or legacy

information systems. Each state and locality which

undertakes Asset Management does so in a fashion

unique unto itself.

Asset Management Works at

Multiple Levels

Asset Management provides benefits at three levels, a

policy level, an administrative level and a technical

level.

First, at the public-policy level it provides the

organization with a clear framework it can use to

explain its investment decisions and to illustrate the

investment tradeoffs that it faces, as in Figure 3 above.

If legislators ask for scenario planning to illustrate the

impacts of increased or decreased investment, the

agency can respond in a systematic fashion. The

agency can explain its infrastructure-management

philosophy and document that it is rational,

comprehensive and economical, based on the lowest-

overall life-cycle cost.

Secondly at the administrative level, Asset

Management provides the agency a means by which to

organize its disparate and widely distributed resources

in a coordinated fashion to achieve one of its key

missions – the optimization of roads, bridges and other

transportation assets. The typical department of

transportation will have essential staff distributed

across dozens of counties and regions and hundreds of

construction projects. Asset Management policies and

practices provide a unifying structure and philosophy

to coordinate these widely distributed people and the

resources they control.

Third, at the technical level, Asset Management

systems provide the information that engineers,

planners, information technology specialists and

managers need to conduct their jobs. Asset inventories

provide information on the extent and condition of

assets. Degradation rates can be used to predict assets’

future remaining service life. Information about the

performance of past materials and construction

techniques can be used to assess the adequacy of

construction standards and materials. The planned

preventive and reactive maintenance needs provide

structure to the efforts of maintenance forces. In

summary, Asset Management provides a “knowledge

management” framework which contributes to

continued organizational learning.

People, Processes, Plans and

Products

Two of the agencies examined in this report, the

Oregon and the Utah DOTs, use very similar language

Asset Management for Sustainability, Accountability and Performance 13

in describing the major focus areas necessary to instill

asset management successfully. They describe “people,

processes, plans and products” as being essential. The

fact that four fundamental aspects of an organization

need to be engaged reflects the complexity and

comprehensiveness of Asset Management. Changing

people, changing processes, changing plans and

changing products can involve a transformative

evolution which extends to most major business areas

of a large transportation organization.

Such transformation has been experienced by leading

Asset Management practitioners, and by those

organizations which have embraced other advanced

frameworks such as ISO, Baldrige or Six Sigma. This

report will later describe those other systems and

illustrate how they compare to Asset Management. But

first, the report will describe what leadership strategies

and organizational structures have been used

successfully to ingrain these frameworks into the

people, processes, plans and products of transportation

agencies.

The Case Studies

Beginning with the next chapter, case studies follow each section. These case studies elaborate

upon and illustrate the themes from each topical section. Particularly they focus upon the common

issues that agencies confront and how they address them when they attempt major organizational

change to improve asset conditions.

All of the case study agencies stressed that they do not consider themselves to have achieved a

perfect process. All stressed that while they are pleased with their progress, they are on a long

journey and their asset management practices continue to evolve. Each agency has taken a

different approach based upon its statutes, geography, history and organizational structure. No

case study is presented as representing the definitive approach. Rather, they illustrate the rich and

innovative approaches which have been adopted. In their diversity, they illustrate that Asset

Management principles can be applied successfully in many different settings, with different

organizational structures and with differing legal frameworks. From New Zealand to North

Carolina, agencies have achieved success with asset management practices in their own ways.

Asset Management for Sustainability, Accountability and Performance 14

Asset Management for Sustainability, Accountability and Performance 15

Chapter 2 Key Agency Roles in Asset

Management

To explain how to organize and operate an agency to

maximize Asset Management it is necessary to

elaborate on the how the traditional functions within

a department of transportation need to change. The

functions of planning, design, construction and

maintenance all need to alter or tailor their activities

in important ways to achieve the full benefits of

Asset Management. Operating in silos with a

reactive, short-term term mindset impedes Asset

Management, while a multi-disciplinary, long-term

approach enhances it.

Policy, Strategy and Planning

Establish Direction

Asset Management begins with sound strategy. It

rejects a “business-as-usual,” “muddling-through”

acceptance of past practices. Instead it embraces a

clearly articulated “rational comprehensive”

approach to planning, programming, project-delivery,

maintenance and on-going analysis. As such, a

department which wants to embrace Asset

Management must develop realistic long-term goals

for its system conditions. It needs to set clear,

numeric goals for what level of condition it wants to

achieve for its pavements, bridges, maintenance

features, fleet and facilities. These specific, numeric

goals must be realistic to be credible. They can be

based upon computerized forecasts conducted by

Creating

organizational

alignment is one of

many benefits of

adopting an asset

management

approach. TAM

provides an

overarching

framework for

decision making

which coordinates

disparate activities.

Asset Management for Sustainability, Accountability and Performance 16

models or be conducted by ad hoc analysis of past

trends and future projections. They should extend at

least a decade into the future to fully capture the

long-term effects of current practices in planning,

programming, construction and maintenance. To

understand whether today’s actions are sufficient, the

departmental leader needs to understand how today’s

actions will affect system conditions in the future.

By its very nature, Asset Management assumes a

long-term view. Therefore, a long-term strategic

approach to thinking about the department and about

organizing its activities is essential to implementing

Asset Management.

The department’s planning function must be able to

produce sound investment scenarios. The asset

planning functions reside in various units in different

agencies. Sometimes, the asset planning functions are

in the Planning Division, other times they are within

districts, or materials units, or for bridges they may

be in the structures divisions or even maintenance.

Wherever the asset planning function resides, it must

do more than fulfill the short-term mechanics of the

federal or state planning process. The planning

function must conduct strategic long-term forecasts

of system conditions and provide senior management

with alternative investment options based upon

various long-term scenarios. The scenario which best

meets the department’s policy needs, system-

condition goals and financial resource forecasts can

be selected.

An important component of the department’s

strategic, long-term approach is to meaningfully

translate the long-term objectives into short-term

performance measures which are drivers for annual

activities. If the department seeks to increase

preventive maintenance investments for greater long-

term pavement performance, the number of

preventive maintenance projects in the short-term

Transportation Improvement Program probably needs

to increase. The planning function can measure and

track the short-term annual and bi-annual pavement

project accomplishments for their conformance to the

long-term objectives.

Formerly separate functions often become linked in

an Asset Management process, therefore cross-

cutting coordination is important. The maintenance

of asset inventories is an important planning function

within an Asset Management environment. Another

important planning function is the development of

the State Transportation Improvement Program

(STIP), or the collection of capital projects and

activities to be undertaken. In an Asset-

Management framework, these two formerly separate

functions become linked in important ways. Each

year as the inventory conditions are updated, the

conditions should be assessed and compared against

the short-term condition goals which the department

had set for the year. Also, the development of the

projects in the STIP should be carefully done so that

the particular projects actually include the precise

number of preventive, reactive, rehabilitative and

replacement projects which were prescribed in order

to achieve the desired long-term system conditions.

As mentioned earlier, all the traditional departmental

functions occur in an Asset Management operation

but they often occur with more cognizance and

linkage as to their effects upon other aspects of the

department. In this case, the development of the STIP

is done with a clear objective of achieving the short-

term system-condition goals, which are one annual

component of a multi-year strategy. Also, as the

annual inventory assessments of the condition of

bridges, pavements and maintenance items occur, the

resulting overall condition levels are compared to

“field verify” whether the forecasted conditions were

actually achieved. The two formerly separate

functions of STIP development and inventory

condition updates become strategically linked in an

Asset Management planning framework.

Traditional planning and forecasting scenarios must

be clearly understood by policy makers. The planning

functions must fulfill an important forecasting role,

both internally and externally to policy makers.

Departments are always influenced by outside policy

forces, whether they be gubernatorial, legislative,

media-driven or embodied within a commission.

These forces will seek to influence project selection

and programming to whatever ends they deem most

important. The policy and planning process of an

organization can provide these influencers with clear

information on the tradeoffs to be faced and the

consequences to be expected from their decisions. To

effectively influence the investment decisions, the

forecasts need to be clear, credible and

Asset Management for Sustainability, Accountability and Performance 17

understandable. This requires the planning function

to not only be expert in conducting forecasts but also

to be able to clearly explain them to the public and

policy makers. Important within this forecasting

function is:

• the clear estimation of available resources;

• the trends in system condition;

• the investment tradeoff scenarios which are

possible, and;

• a recommendation for how to balance these

complex, and competing needs.

These competing needs can be between asset classes

such as bridges and pavements, between important

objectives such as safety and environmental

enhancement, or between modes.

Project Delivery Reliability is

Key to Timely Asset Treatments

The coordination between the asset planning

functions and the project delivery functions is very

important in an optimized Asset Management

operation. The planning and programming functions

play an explicit role in selecting specific projects to

achieve specific system-condition goals. Outcome-

related metrics drive programming decisions, as

opposed to more general output measures such as

merely the number of miles paved or whether a

department hit a goal for the size of its construction

program. The programming and project-selection

decisions are explicitly tied to predicted asset-

deterioration cycles. The timing of preventive and

reactive maintenance projects are carefully planned

to maximize asset-condition longevity. For any one

project, predicting this time window and delivering a

treatment project accordingly is relatively simple.

When departments are managing thousands of

disparate pavement sections and thousands of

separate structures, the coordination of hundreds of

specifically scoped and specifically timed projects

becomes quite complex. Therefore, the coordination

between planning and design functions must be

sound.

For instance, by tracking structural deficiencies in

pavement sections, the pavement planning officials

can identify pavement sections appropriate for

preventive maintenance treatments. Projects for those

treatments can be scoped and timed appropriately

with the design division. The pavement planning

function also can assist design by forecasting the

cumulative effects of all programmed projects upon

meeting the department’s pavement or bridge-

condition goals. If the overall program is not

projected to achieve the desired goals for a specific

horizon year, either additional projects can be

considered or the scope of the existing projects can

be altered to achieve the asset condition goals.

Projects are reliably delivered on time and within

scope in an agency that successfully optimizes asset

management. The role of design or plan

development units is to reliably deliver the

appropriately scoped project on time so that the

lowest-lifecycle-cost treatment actually is delivered

to the asset when it is needed. If preventive or

reactive maintenance is delivered too late in an

asset’s deterioration curve, the treatment

effectiveness will be diminished. The importance of

treatment timing is particularly acute considering the

lack of adequate funding that most agencies

experience.

Agencies are seeking to stretch their assets’ useful

lives without letting them deteriorate to a stage where

they require expensive reconstruction or replacement.

This creates a treatment window in which the

appropriate low-cost treatment will improve the asset

but the same treatment delayed may be inappropriate

for that asset. For instance, a minor overlay timed

appropriately can extend a pavement’s life but a

minor overlay on a severely structurally deficient

pavement will accomplish little in the long-term.

The overall lifecycle cost assumptions of when to

treat an asset and how to treat it must be predicated

on the reliable assumption that the treatments will

occur on schedule.

Design units also must have sound cost data to

successfully support Asset Management. Asset

Management is about seeking the highest-return-on-

investment strategies for the assets over their useful

life. Assumptions about how to treat those assets

must be predicated upon sound cost information.

This cost information generally comes from a

Asset Management for Sustainability, Accountability and Performance 18

comparison between estimated costs and actual costs.

The actual costs are derived not only from the

awarded bids, but also from all the change orders

which occur to a project during its construction. The

final, as-built costs must be tracked and translated

into useful unit costs which are fed back into the

planning forecasts. The accuracy of the unit costs

which can be escalated with realistic growth factors

is essential to investment forecasts and scenarios. To

coordinate the accuracy of planned, estimated and as-

built costs, requires coordination of the planning,

estimating and construction sectors. The accurate

data they generate must be available to the Asset

Management planners who are forecasting system

needs. In the Utah DOT case study, the Asset

Management staff noted that capturing reliable asset-

treatment unit prices was a key step in their Asset

Management development. Separating the costs of

pavement treatments from ancillary costs in projects

was important to forecasting budget levels needed to

sustain pavement conditions.

Departments have a formal, documented process for

approving significant change orders and cost

increases in an Asset Management framework.

Because funding and programming decisions have

been carefully balanced in an Asset Management

environment, a significant cost increase in one

project results in the delay or cancellation of another.

The cost change which results in a project delay or

cancellation may ripple through the carefully

balanced network analysis. The production or plan

delivery unit needs to formally report the cost

increases and coordinate that information with the

planning and programming staffs who had balanced

the program originally. Not only are project-delivery

dates carefully tracked, but adherence to project cost

and scope must also be coordinated.

The Importance of Maintenance

Should Not be Overlooked in

Asset Management

Maintenance forces can become a key partner in an

Asset Management framework. Maintenance

activities traditionally have been reactive but they

become incrementally more strategic and pro-active

when they are fully integrated into an Asset

Management framework. The daily work

maintenance forces do can be strategically focused

upon the maintenance activities which most directly

support the continued performance of assets. These

activities are unglamorous but important. They can

include:

• Systematic crack sealing;

• The application of low-cost treatments such as

chip seals;

• The cleaning of under drains;

• General drainage maintenance;

• The strengthening of shoulders which can

prevent pavement edge failures;

• The clearing of scuppers and expansion joints

on bridges;

• Bridge deck patching;

• Full-depth pavement repairs which contribute to

pavement structural integrity instead of mere

surface patching.

It has been common in recent decades for

maintenance forces to operate under , however, for

those forces to be explicitly trained as to how the

above activities can extend the life of pavements and

bridges. In a fully organized, asset management

framework the front-line maintenance forces are

viewed as an important ally in the process.

Construction’s Critical Quality-

Control Role

It is self-evident that sound construction,

inspection and materials-testing practices

are important in Asset Management. The

detailed adherence to materials and

construction specifications are always a

priority. In an Asset Management

framework, the reliance on sound

construction techniques is even heightened

because the organization is relying on the

full performance of any particular treatment

as part of its carefully choreographed and

balanced program of projects.

Asset Management for Sustainability, Accountability and Performance 19

Information and Analysis Rises

in Importance in Asset

Management

Information and analysis is probably the area of a

traditional department of transportation which most

grows in importance during the transition to a full

Asset Management environment. As departments

embark on an Asset Management effort, they quickly

consume ever-increasing amounts of information and

analysis. Legacy asset inventories such as bridge,

pavement and maintenance inventories are

increasingly relied upon as the basis for scenario and

tradeoff analysis. Management systems are often

found to be lacking in the detail and flexibility which

decision-makers soon require as they seek ever-more

complex scenario planning.

Nearly all departments have basic inventories for

their pavement, bridge and maintenance assets. In

some cases where Asset Management was not

emphasized, these inventories degraded in terms of

the accuracy and timeliness of their data. If the data

were not heavily relied upon for decision making,

there was little institutional imperative to sustain

them in a high condition. Once decision makers

come to rely upon sound condition data as the basis

of scenario forecasting and project selection, the need

to update and enhance the legacy inventories rises in

importance.

Management systems are called upon for increasingly

sophisticated scenario analysis. As the department

refines its Asset Management approach it will seek to

increasingly improve the accuracy, specificity and

scope of its scenario forecasting. As it discusses

options with policy makers, they will seek answers to

ever-more complex questions about the effect of

different investment options. These scenarios will

put increased pressure upon traditional management

systems, which the information technology unit will

be asked to enhance.

The measurement of performance in all Asset

Management functions will require continuous

reporting. Departments which rely heavily upon

Asset Management tend to develop “dashboards” and

other performance reporting processes. These reports

are desired so that policy makers can measure

progress of the multiple and inter-related functions

which must occur continuously to effectively

implement Asset Management.

Leadership and Communication

Link Strategy and Action in

Asset Management

The execution of Asset Management requires vision,

communication and continuous self-evaluation. In

short, it requires leadership. If left to their own best

efforts, the various units within a department will

attempt within their span of control to improve the

assets under their jurisdiction. However, to effectively

achieve the extensive coordination and resource-

allocation tradeoffs described above, a leadership

structure needs to be in place. This structure must be

able to effect timely and reliable execution of

activities and it must be able to enhance institutional

learning by compelling the continuous analysis of

results. In short, the successful change from

“business as usual” to a “rational and comprehensive”

system requires compelling leadership.

Asset Management for Sustainability, Accountability and Performance 20

North Carolina DOT Case Study

Following is a case study of the North Carolina DOT. The evolution of asset management in

North Carolina clearly reflects many of the evolutionary trends described in Chapter 2. In

North Carolina, the roles and responsibilities of many disparate units were clarified to focus

their efforts to collaboratively embrace asset management as the organization's framework

for managing its highway system. The North Carolina case study also foreshadows trends

relating to organizational structures and informational needs that are discussed in Chapters 3

and 4.

Asset Management for Sustainability, Accountability and Performance 21

North Carolina DOT - A Case Study In Leadership,

Performance Management, Accountability And Asset

Management

o best serve North Carolinians in the 21

century,

NCDOT conducted an internal review to identify

areas of improvement that could be undertaken to

help them better manage all the transportation assets,

projects, programs, initiatives and services. This report

discusses the changes implemented by NCDOT as a

result of that review. Actions taken by NCDOT

included changes to its processes, management

strategies, organizational structure, roles and

responsibilities. It resulted in a stratified approach to

investment in the multimodal transportation network. It

aligned accountability and performance measures

around a clear understanding of agency mission and

goals. The approach also focuses on systematically

managing all assets within the charge of NCDOT.

Performance measures and accountability were simple

and transparent. They cascaded from the top leadership

down to each employee. Employees could link their job

responsibilities and actions to performance of the

agency mission and goals. NCDOT’s actions have

resulted in systems, policies processes and structures

that have enabled the agency to forecast the condition of

its infrastructure and develop strategic and tactical plans

to systematically manage its assets. The process helps

the agency to better address system needs while

working within budget constraints.

DOT FACTS

The North Carolina DOT was established in 1915 as the

State Highway Commission. Over the years, the agency

has gone through major changes when the General

Assembly consolidated services provided by other state

departments into the DOT. The agency, earlier referred

to as the North Carolina Department of Transportation

and Highway Safety, was later shortened to the North

Carolina Department of Transportation and incorporated

the Division of Motor Vehicles.

The North Carolina DOT is amongst DOTs that manage

not only state and local roads and ferries, but also

provides funding and oversight to rail, public airports,

and other modes of transportation. The agency has the

second largest state-maintained highway system in the

nation and an annual budget of approximately $4

billion.

Nearly 12,000 employees in the agency headquarters

and across 14 highway division offices, 41 district

offices and 100 county maintenance facilities are

involved in managing all of these assets.

In the late ‘90s, NCDOT established a Maintenance

Quality Assurance program and implemented a

Maintenance Management System. The goal was to

estimate and plan its routine maintenance and

resurfacing needs. The agency’s initiative was in

response to the State Legislature passing a General

Statute requiring the agency to survey the condition of

the State Highway system every even-numbered year

and reporting the findings to them.

Significant increase in the use of the state’s

infrastructure has been observed and this is expected to

continue to increase. With inflation and funding

The DOT manages:

• 79,009 road miles

• 158, 592 paved lane miles

• 6,644 miles of unpaved miles

• 17,756 State Structures

o 14,000 Bridges

o 3,756 Culverts

• 511 Traveler Information System and

Intelligent Transportation System

that includes

o 140 dynamic message signs

o 200 traffic cameras

o 500 centerline miles of

Interstate Motorist Assistance

Asset Management for Sustainability, Accountability and Performance 22

constraints, maintaining the condition of an agency’s

asset has become a tremendously challenging task.

According to projections, the VMT of North Carolina is

expected to double by 2020 and the population is

expected to grow by 50% between 2000 and 2030. This

will make North Carolina the seventh most populous

State by 2030. The constraints in funding and the

increases in population and VMT will magnify the

challenge of the agency to keep the transportation assets

in good condition.

Setting Direction

In 2008, the agency revised its mission and goals to

meet the transportation needs of the 21st century. The

goals of all the business units were revised to be closely

tied to the mission and goals of the agency.

The revised goals addressed all aspects of asset

management necessary to run a world class

transportation agency. It addressed processes to

effectively manage the network proactively and make it

last longer while ensuring safe and efficient movement

of people and goods. The goals also focused on Human

Resources, considering the employees as assets and

creating an environment that would attract, retain and

bring out the best in the employees.

The State Highway Administrator, Terry Gibson said

“Long term success of an organization has to come

from within. This can be accomplished by setting clear

directions and enabling the employees to feel like

shareholders, involved in the long term success, taking

ownership and contributing to its continuous

improvement.”

The Agency Mission

Connecting people and places in North Carolina -

safely and efficiently, with accountability and

environmental sensitivity.

The Agency Goals

• Make our transportation network safer.

• Make our transportation network move people

and goods more efficiently

• Make our infrastructure last longer.

• Make our organization a place that works well.

• Make our organization a great place to work.

Review and Continuous

Improvement

The heart of all effective management strategies lies in

planning, implementing, reviewing and correcting. This

cycle has to occur continuously in order for the

improvement to be effective and appropriate to the

changing times. The NCDOT initiated an effort to better

understand the challenges of the 21st century. The

objective was to identify the areas within the DOT

where improvements could be made and to lay the

foundation for how to best deliver transportation

services to North Carolinians in the 21st century within

the constraints of the budget.

In 2007, to assist in this effort the leadership hired

McKinsey and Company to survey, review, identify and

diagnose the operation, processes, workings and the

organizational structure of the DOT. The company

worked closely with the NCDOT team in completing

this assessment. Many agencies conduct similar internal

reviews including the use of external assistance such as

that used by NCDOT to accomplish the objective of

reviewing and refining/ making changes to existing

processes, programs, structures and policies. Based on

the goals set by the NCDOT, McKinsey and Company

made recommendations to build capabilities and support

the transformation that would enable the agency to

deliver transportation services to North Carolinians in

the 21st century. After the review, the agency

systematically implemented a series of changes. The

agency also implemented a revamped Continuous

Improvement Program that helps it to continue the

review and refinement of various aspects of its

organization as they relate to the mission and goals of

the agency.

This has resulted in many new ideas for improving the

life of assets and the delivery of services within the

DOT. In 2009, the agency received over 20 suggestions

for improvements. One of these suggested

improvements was about, “How to improve asphalt

surface treatment.” The process started by the

leadership taking the initiative to make continuous

Asset Management for Sustainability, Accountability and Performance 23

improvements and this approach is now integrated into

the agency culture. It is thus more likely to continue in

the future.

Leadership and Communication

As organizations continue to grow, business units try to

make internal improvements. Often these internal

improvements are not done in collaboration with other

business units and are narrowly focused more on

improving unit specific products and services. Without

continuous review and alignment of the goals of the

organization with the goals of each of the business units,

over the years these can get off synch. This can lead to

the silo effect. Reviews at the organizational level can

be expensive and can be perceived as wasteful, making

it difficult for public organizations to conduct frequent

review and realignments.

Change is always difficult. But when such reviews and

changes are led by the agency leadership that is open to

and leading the change, it sets an example for its

employees also to embrace such change.

When NCDOT conducted its review in 2007, its

leadership identified the formation of silos as one of the

challenges that needed to be addressed. They found that

even though business units had streamlined their

internal operations, because of the presence of silos,

often the goals were not collaborative and in many cases

competed with those of other units. The sum of these

improvements did not result in the better performance of

the agency as a whole.

Clear, Simple Common Mission

and Goals

Having clear and simple mission and goals makes it

easier for employees to understand, adopt and contribute

to the success of an organization.

NCDOT leadership addressed the issues of silos and

competing goals by revising and setting simple but very

clear goals and a clear mission for the agency. The goals

of each business unit were completely aligned with the

mission and vision of the organization. The agency then

set up an implementation plan to communicate these

goals and its mission across the agency. These were

repeatedly communicated to all employees. The

communication and changes included:

• One Common Focused Direction.

• Revised the mission and goal statement to

make it consistent within the agency.

Communication and Common

Understanding

The NCDOT mission and goals were cascaded

throughout the organization. The agency adopted a

practice in use at many well-run organizations to

start every meeting by tying the objectives of the

meeting back to the mission and goals of the

department. This practice achieves two objectives:

• Firstly, it reminds everyone about the mission

and goals of the agency, and

• Secondly, it forces employees to relate the

objective of the meeting to the mission and

goals of the agency. This helps further align

agency activities with common goals and

reduces the formation of silos.

Like most large organizations, in the DOTs, many

business units, divisions and offices contribute to the

successful delivery of projects, programs initiatives and

services. In organizations where business units are silos

it is difficult to assign accountability or responsibility

for successful delivery of products at the agency level.

Accountability and responsibility can be defined clearly

when the sub-deliverables, sub-tasks and sub-products

to be delivered by each business unit are well defined.

Silos within NCDOT made it difficult to clearly assign

accountability and responsibility. This led to missed

opportunities due to lack of collaboration in areas

including in planning, project selection and

implementation. Duplication and contradictory

decisions led to some waste of resources and efforts. It

also led to imbalance in staffing with respect to the

overall agency goals.

“Employees tend to focus on the goals of their business

unit often at the cost of agency goals. Silos coupled with

lack of processes for agency wide prioritization,

accountability and coordination leads to delays in

projects and waste of resources” said the Chief

Operating Officer, Jim Trogden.

Asset Management for Sustainability, Accountability and Performance 24

To create an efficient streamlined organization, where

there was less duplication of efforts and there was

collaboration to meet the transportation needs of 21

century, NCDOT reviewed the operations of all of its

divisions and identified areas for improvements.

Restructure and Realign

Restructuring of an organization has to be done

thoughtfully. It is important to restructure in order to

realign areas of the organization for efficient

functioning and improved collaboration across the

agency. NCDOT restructured itself by focusing on

developing a more productive organization. They

restructured only selected areas that would lead to

accomplishing the overall success of the organization

and the proactive management of assets and services

based on long and short term goals of the Department.

Realignment should facilitate maximum coordination

and align business units to collaborate, be accountable

and responsible in delivering the agency’s goals and

mission for the 21st century effectively. Some of the

actions taken to address the issues with collaboration

included:

• Selective organizational restructuring and

realignment to support collaborative and well

coordinated decisions in project planning and

project delivery;

• Alignment of business units along functional lines

and improvement of coordination amongst business

units;

• Improving coordination across geographies in

planning, designing, delivering and maintaining

projects;

• Restructuring in a way to improve accountability

for delivery of projects, programs, services and

initiatives;

• Improved coordination of Core Processes;

• Working with employees to change mindsets to a

more collaborative approach focused on

organizational success and accomplishment versus

individual or business-unit-specific

accomplishments;

• Focus on Outcome Based Performance Metrics.

Collaboration from Cradle-to-

Grave

An approach to improving efficiency and increasing

effectiveness in decision making identified by NCDOT

was to increase sharing and collaboration in processes

from planning through project development. To

facilitate this, the agency recommended the

implementation of a Project Collaboration Software

that supports core processes in planning, programming

and project development. This prevented isolation and

disconnect in decision making amongst the various

business units and processes necessary to plan and

develop projects in a shorter period of time.

Focus Resources in Strategic

Planning and Asset Management

To strategically help with improving overall

management of assets and to link it to strategic

planning, NCDOT created the Strategic Planning Office

(SPOT). SPOT was responsible for analyzing system-

needs, conducting trade-off analysis and prioritizing

Deputy Secretary for

Intergovernmental Affairs &

Budget Coordination

Legislative

Coordination

Federal Funds

Coordination

Transportation

Planning

Policy and

Procedure

Administration

Strategic Planning

Governor’s

Highway Safety

Program

Figure 4 The Strategic Planning Office reports to the Deputy Secretary.

Asset Management for Sustainability, Accountability and Performance 25

projects, for the Statewide Transportation Improvement

Program (STIP) state-wide. SPOT as shown in Figure 4,

is high in the organizational chart and is responsible for

coordinating the submission of candidate projects for

the STIP and prioritization based on the DOT’s mission

and goals.

SPOT assisted the agency and helped make strategic

planning transparent and proactive. The process

followed by SPOT involves comprehensive 1-year, 2-

year and 8-year strategic planning efforts. The steps

involved:

• Every 8 years, establishing a strategic direction and

creating a 30 year outlook;

• Every 2 years, developing strategic prioritization

based on a 5 to 10 year outlook;

• Every year, creating action plans based on a one to

two year outlook.

The formal and systematic annual process of

prioritization guides the development of the

Transportation Improvement Plan. Though collaborative

in nature, it takes input from multiple sources and

applies a numerical value based on the contribution of

the project to reaching the department’s goals and

objectives. The agency has also a process for

stakeholders to provide input early in the process.

Keeping the process transparent and communicating the

details of the prioritization models publicly has helped

the agency to improve and shorten the selection and

prioritization process.

Office of Asset Management

Transportation Asset Management (TAM) has been a

part of the agency’s operation for a long time. It was

formalized in 2003. According to Terry Gibson, the

NCDOT State Highway Administrator, the approach of

the staff has been “give us the resources and hold us

accountable for the performance of our transportation

assets. The agency already had many elements of Asset

Management in place. With the revised performance

management process and the resulting performance

measures being closely linked to the goals and

performance being measured based on the results, Asset

State Highway

Administrator

Asset Management

State Road

Management

Secondary Roads

Equipment

Pavement

Management

Bridge Management

Road Inventory

Mapping

Figure 5 Organizational chart for asset management.

Management has become more appreciated.”

According to Mr. Gibson, Performance Management

and Asset Management are closely tied. Any agency

starting the journey into developing effective

performance management processes and measures can

Asset Management for Sustainability, Accountability and Performance 26

use some of the following simplified steps:

• Jump-start the process by creating a TAM office;

• Assign someone the responsibility and authority

which by itself will force change in the

organization;

• Develop performance measures and metrics and tie

them to performance of the assets;

• Lay out the benefits of TAM in the context of the

mission and goals of the business;

• Communicate the goals, objectives and role of

TAM to all the business units and explain how each

business unit could use TAM to make better

decisions and improve performance of projects,

programs, services and initiatives within their

charge.

Since TAM makes sense from a business perspective,

agencies will be able to get buy-in across the

organization, sooner or later, depending on the

organization and the type of strategies they use to

educate and communicate.

Jon Nance, Chief Engineer stated, “we use Asset

Management linked to the performance of our assets to

communicate with the legislature and stakeholders.

This has resulted in an increase in our budget and has

helped to improve their understanding of our strategies,

efforts and challenges.”

NCDOT uses tools to translate conditions of the assets

into strategies. For example, the number of miles of

pavements in good, fair and poor conditions is used to

develop short term and long term strategies. These

strategies are translated into action plans for the field

managers.

Asset Management plays an important role in the NC

DOT. As shown in Figure 5, The Director of the Asset

Management Office reports to the State Highway

Administrator. The Office of Asset Management is

responsible for coordination of condition assessments

on all three tiers (state, regional and sub-regional) of the

roads, pavements and bridges and the management

systems that support these assets.

“Transportation Asset Management has allowed us to

communicate financial resources to the legislature. It is

a mechanism to show how you are good stewards of

funds and how you are making the best use of resources

to benefit the public”, said Terry Gibson. Lacy Love,

Director Asset Management said, “Asset Management

has been important for decision making in NCDOT. It

helps the agency have an accurate picture of the current

conditions of the assets and the resources required to

change and improve the conditions of the system.”

The Asset Management group has an important role in

providing data and sharing the information required to

accomplish the outcomes and results established

through the performance management process.

Terry Gibson, said, “The agency’s asset management is

focused on highways for which we have very good

information. We are looking to ultimately develop a

cross functional analysis to help us meet targets of

performance across all modes.”

The North Carolina Multimodal

Investment Network (NCMIN)

NCMIN is an investment template developed by

NCDOT to help prioritize investment strategies based

on how the components of the transportation network

contribute to serving different transportation

movements. The agency also developed the Strategic

Highway Corridor initiative to” protect and maximize

the mobility and connectivity on a core set of highway

corridors.” In North Carolina, all transportation

facilities are classified into three groups based on their

function in serving transportation. The three tiers as

shown in Figure 6 are defined as follows:

• Statewide Tier serves long-distance trips, connects

regional centers and has the highest usage. This

includes the Strategic Highway Corridors (SHC)

which consists of 7% of the roads that carry over

45% of the traffic.

• Regional Tier serves to connect major population

centers. All Primary routes (US and NC) not on the

Statewide tier fall into this tier,

• Sub-Regional Tier serves localized movements

and is of most interest to cities and

• counties. This includes all secondary routes (SR)

not on the SHC.

Asset Management for Sustainability, Accountability and Performance 27

Tiered approach to asset management is an effective

way to prioritize and make decisions when large

numbers of assets compete for limited resources. In

Statewide

Tier

Regional

Tier

Subregional

Tier

Increasing

State

Interest

Increasing

Local

Interest

Figure 6 Conceptual representation of the Multimodal

Investment Network.

NCDOT this tiered approach is an effective strategy for

making decisions on investments based on the use and

function being served by the transportation component.

Being Strategic in Selecting

Projects and Services

The NC DOT portfolio of projects and services is

explicitly linked to the revised goals of the agency. The

portfolio of projects is based on the long-term as well as

short-term goals. The portfolio also is based on

innovative funding approaches beyond relying on

existing sources of funding. The plan of activities

includes day-to-day actions that need to occur for

effective performance of the assets as well as the long

term actions required by the agency. The short term

plans become part of the annual action plan for the

managers.

Role of Data in Quality Processes

Good decisions depend on the quality and consistency

of data being used. In quality processes such as

Baldrige, Six Sigma, Balance Scorecard and ISO, the

quality of data and information systems and their

contribution to data driven decision making, are major

components of the evaluation process. The quality of

decisions depends on the sustainable availability and the

quality, reliability and consistency of the data and

directly contributes to the quality of the agency’s plans.

One of the big data challenges faced by organizations is

the lack of consistently reliable data to make decisions.

Standardization of data has always been a challenge.

Often, data pertaining to the same asset used by

different business units for decision making even for the

same period of time is different. This may be because:

• different business units collect their own data;

• the frequency and hence “how current the data

is” varies across business units;

• the interpretation of the data by different users

is different, or;

• business units save the data in their own

databases that are not linked to and do not

communicate with other databases in the

agency.

This results in islands of data that do not connect with

each other. All of these issues of data inconsistency

make it difficult for an agency to make sound strategic

decisions. These issues can lead to external

stakeholders, the public and the legislature questioning

the credibility of the agency’s decisions.

NCDOT, in the review of its internal systems, found a

lack of integration of data in its core businesses such as

Bridge Management, Pavement Management,

Maintenance Management, Traveler Information

Management System, Accident History, Construction

Management, Project Management, Financial

Management (SAP system) and GIS.

Based on the findings, NCDOT identified the need for

Data Integration, Enterprise Document Management

and Project Collaboration Software as high priority

projects necessary to support the delivery of

transportation projects, programs, services and

initiatives effectively. To accomplish these, the agency

identified the following goals for Data Integration:

• Integrate data across DOT to enable

management reporting;

• Ensure consistent and accurate reporting;

• Provide reporting from a single source.

To address the lack of integration between many of the

systems pertaining to core processes, the agency

implemented changes to its data warehouse and

Asset Management for Sustainability, Accountability and Performance 28

integrated important data about the performance of core

assets and functions into a one-stop performance

management and accountability system. The agency

thus created a single source of business intelligence data

for all DOT management reporting. This single view of

the data across the enterprise - an essential element of

asset management - has resulted in an integrated

approach to making decisions on the short-term and

long-term management of the agency’s infrastructure

assets. This has also helped the agency in its analysis of

the conditions and in developing corrective actions

required for developing the short-term and long-term

plans.

Data Collection and

Dissemination

DOTs have many assets and therefore, data collection in

a DOT can be a very expensive process. NCDOT has

over 75,000 miles of pavement and over 17,700

structures. Monitoring and evaluating the condition and

performance of these assets require collection of large

numbers of specific data throughout the life of the

asset. NCDOT addressed the data collection and data

consistency issue by consolidating and centralizing

strategic data collection for the Division of Highways

under the Office of Asset Management.

To make sure that all users get on-time access to the

same data, the collected data is streamed to all users.

The data is also mapped and stored in the central

repository. This approach ensures that the same type of

data is not collected by multiple areas within the

agency. It also enables consolidation of data to a single

repository so decisions made across the agency are

based on the same data.

Aging Assets, Long Term

Decisions and Asset Management

NCDOT is facing the same challenges that many other

states are facing. Many bridges across the nation are

nearing the end of their life. Delayed action will mean

more expensive treatments. However, the current

funding situation makes it extremely difficult for states

to address the challenges in maintenance and

preservation that need more immediate action.

• In North Carolina about 8,000 bridges will

need to be addressed within the next 20 years.

• About 12, 700 bridges are owned and

maintained by NCDOT;

• 3,400 bridges have an estimated remaining life

of less than 10 years;

• The agency will need to address about 400

bridges each year to make gains on the number

of deficient bridges;

• The agency is able to address only 100 per year

leading to approximately 200 bridges

becoming structurally deficient each year.

One of the issues the agency found was that delays in

project delivery led to the agency not being able to use

all of its federal allocation of “B” funds. Bridge project

delivery issues included overdesign at the sub-regional

tier, lack of budget controls where scoping was not

based on a budget, too long a time between planning

and letting of projects. The agency found that improving

coordination and development, and including

maintenance, preservation and rehabilitation strategies

in project prioritization would help the agency to

increase the number of bridges that it addressed each

year.

The agency also found that accountability and

responsibility of the bridge program was too dispersed.

To address these issues, the agency identified the need

to create a structure with a Central Bridge Manager,

Division Bridge Manager and Right-of-Way Utility

Coordinator responsible for coordination and successful

management of bridge projects. The intent of this

organization change was to make the Central Bridge

Management Office accountable for the entire bridge

program with the Division Managers being accountable

for bridges in the divisions. The agency is in the process

of implementing these changes and hiring managers to

fill these new roles. The agency also understood that all

bridge projects are not the same. To address the varied

needs of the divisions, the agency implemented two

different project management approaches for bridges.

One consisted of a TRI-managed process and another is

a Division Managed Process. The selection of the type

of process depends on the complexity of the project and

the site conditions. The agency also implemented

budget-based design and construction. It is also

developing formal processes and capturing these in

manuals for bridge preservation and management and

Asset Management for Sustainability, Accountability and Performance 29

communicated these through training the employees.

The agency has also established two new positions to

help with their preservation efforts; a pavement

preservation engineer and a bridge preservation

engineer.

Streamlining and Instituting On-

site Project Scoping for Bridge

Projects

NCDOT streamlined preconstruction and project

development to reduce the time taken from planning to

project letting. The agency focused on making sure that

over-design was eliminated and “right-sized” its bridges

to meet transportation needs. They are institutionalizing

on-site scoping of bridge projects to minimize the

number of alternatives. The agency believes this will

lead to saving time and money in the completion of

projects. The agency is grouping projects

geographically and plans on letting them as “groups of

projects as one” for economy of scale.

Performance Tied to Mission and

Goals

The agency developed a detailed performance

management process with participation and involvement

of a large number of its employees. The leadership

sought input from all employees before the process was

finalized. In this revised performance management

process, the performance measures are tied to the

mission and goals of the agency. The mission and goals

of the agency are focused on how to most effectively

manage the agency’s assets in the short and long term.

The process led to the reduction of the silo-effect and

increased collaboration and synergy between the various

business units and maximized the returns on the efforts

of all employees. The group developed performance

metrics through collaborative processes that involved

many workshops and meetings of Employee Subject

Matter Experts. The Performance Metrics Relationship

Chart linked outcomes to agency mission, goals and

values. It tied as shown in Figure 7:

• Outcomes and expected results to agency

goals;

• The way an employee is expected to act to

uphold NCDOT values;

• The skills needed to be effective for required

competencies.

• Contributions to achievement of higher-level

metrics as they relate to NCDOT’s mission or

goals;

• Meeting customer requirements;

• Improving processes;

• Carrying out key job responsibilities.

NC DOT Mission

NC DOT Values

NC DOT Goals

Competencies

Metrics

Value $

Results You Are

Expected to Achieve

Ways You Are

Expected to Act

Skills You Need to

be Effective

Figure 7 Performance metrics relationship chart.

The agency then went through a rigorous and

systematic process of relating each job in the agency

with goals. This ensured that every job function was

tied to goals and performance measures. More

importantly employees knew what was expected of

them in their jobs and how they contributed to

accomplishing the agency’s goals.

The performance metrics had measures, targets and

weights. The targets are based on the expected

conditions and performance of the agency’s assets and

are directly tied to the strategies and approaches used by

the agency to manage its assets.

• The “Measure” was defined as “results of

action to be gauged related to Mission and

Goals.”

• The” Target” was defined as “the desired level

of achievement.”

• The “Weight” was defined as “the level of

importance.” Lagging Metrics to Adjust Target

for Leading Activities

The agency identified lagging metrics to adjust targets

Asset Management for Sustainability, Accountability and Performance 30

for metrics of leading activities. Leading indicators

measure and track performance before a problem arises.

They are proactive and task specific. They indicate what

may happen in the future based on the value of the

measure and are good to predict the ability to meet

future goals.

Examples of some leading activities for the lagging

metrics for “Crash Rates” that provide information

about safety are:

• Improving shoulder drop-offs;

• Adding reflective markers;

• Adding turn lanes;

• Reduction of VMT by use of alternative

modes;

• Timely project delivery.

NCDOT has had performance measures for a number of

years; some formal, some informal. The agency has

been tracking and measuring its performance in the past.

The change now is that the agency is more focused on

the on-time and on- budget delivery of its deliverables

than on the completion of the activities. Following are

some examples of revised measures:

• A specific quantitative measure of 1.5 to 1.75

Crash Rate versus a generic goal of providing

leadership to ensure safety;

• 90% to 95% system reliability on the strategic

highway corridor;

• 85% to 90% delivery on schedule and on

budget for projects.

The NCDOT performance system is result based. The

measures are tied to the mission and goals of the

agency. For effective management of its assets, NCDOT

has linked all of its projects, programs and services to

goals.

The focus on effective management of the agency’s

assets is reflected in Figure 8. It shows how

performance of the goals directly ties to performance of

the assets. For example, the life of infrastructure is tied

to the Goal “Make our infrastructure last longer.”

Effectiveness in easing congestion and effectiveness in

managing incidents, are tied to the goal “Make our

transportation network move people and goods

efficiently.”

Transportation system and

facilities

Vehicle operation

Ease congestion

Manage incidents

Add capacity

Infrastructure Life

DOT facilities

Projects

Programs

Services

Shareholder interaction

Attractive to people

Performance mindset

Make Our Infrastructure Last Longer

Make Our Transportation Network Safer

Makes Our Organization A Great Place to

Work

Make Our Transportation Network Move

People and Goods More Efficiently

Make Our Organization A Place That Works

Well

Connecting people

and places in North

Carolina – safely and

efficiently with

accountability and

environmental

sensitivity.

Figure 8 The relationship between mission, goals and assets.

Asset Management for Sustainability, Accountability and Performance 31

Figure 9 Performance measures cascade from the top of the organization.

Performance Management,

Accountability and Asset

Management

The Performance measures developed by the NCDOT

are used to:

• Measure process results;

• Measure expectations;

• Establish goals for the agency;

• Establish goals for the individual;

• Gauge performance throughout the organization;

• Provide information to make better decisions.

In view of the current nationwide focus and the

direction of the US Congress in considering

performance management to gauge the performance of

the overall transportation network, DOTs are reviewing

their own agency’s performance framework. The

approach to performance management and the measures

developed and adopted by NCDOT serves as a

illustrative model for other DOTs to study as they

review, revise or develop their own approach.

Effectiveness of Cascading

Performance Measures

Measuring the performance in the NCDOT starts with

the Secretary of Transportation and cascades down to

each level of the organization and reaches every

employee as shown in Figure 9. Strategic direction,

clear metrics and leading by example goes a long way in

obtaining agency-wide buy-in on evaluation of

Department

Directors

Branch Heads

Unit Heads

Employees

Asset Management for Sustainability, Accountability and Performance 22

employee performance.

There is broad understanding in NCDOT of what is

being measured and how measures are tied to the

mission and goals of the agency. This transparency

coupled with clear direction on how to contribute to

meeting the agency’s performance targets makes

employees take responsibility and motivates them to

work toward accomplishing the goals.

Some examples of measures for the Chief Engineer for

are:

• System Reliability: “Percentage of incidents

cleared within 90 minutes,” with a target 70-85%;

• Infrastructure Health: is “Improve Index Score (3

year avg.) toward Goal,” with a Goal of 68-72.

The same measures apply to all positions but the

weights of the measures vary depending on the job

responsibilities and accountability of individual

employees.

Figure 10 is an example of how each position in the

agency is tied to performance measures. Measures for

each position are further related to the overall goals and

targets of performance for the agency.

Role of Leadership Emphasized

In NCDOT the senior leadership is leading by example.

They have embraced change and are holding themselves

accountable and responsible for the performance of the

agency. An example is seen in how the same

performance measures are used to measure all the

employees in the organization. This lends credibility to

the use of the performance measures.

The systematic and logical approach of tying the

performance of assets, projects, programs, initiatives

and services to goals and relating each job to the

measures selected, makes it easy to understand and help

get buy-in from the employees. The process in NCDOT

helps employees understand the actions they need to

take to improve the performance of the transportation

network.

Division Engineer

Division Operations Engineer

Division Infrastructure Health and

Performance – LOS Rating

Infrastructure Health and

Performance – Division LOS

Rating or % of Division

Projects/Programs/Services

delivered on schedule

Division Infrastructure Health and

Performance – LOS Rating

Division Traffic Control Division LOS

Rating

Division Traffic Engineer

Transportation Supervisor

Transportation Worker

% of Planned Pavement

Marking Replacements

Achieved

% of Planned Deficient

Sign Replacements

Achieved

% Planned Pavement

Marking Replacements

Achieved

% Planned Deficient Sign

Replacement Achieved

% Planned Shoulder

Repairs Achieved

% Planned Shoulder

Repairs Achieved

Infrastructure Health and

Performance – Division LOS

Rating or % of Division

Projects/Programs/Services

delivered on schedule

Position

Measures

Figure 10 NCDOT cascading metrics for the Goals: Last Longer and Works Well

Asset Management for Sustainability, Accountability and Performance 23

Figure 11 Projected PCR above 80

Figure 12 projected roadway level of service.

The approached used in the NCDOT is to:

• firstly, define clear goals linked to the

condition of the transportation assets and

services being provided;

• secondly, tie them to performance measures;

• thirdly, link the performance of all employees

to the performance of the goals;

• fourthly have an on-going process of

continuous reviews and corrections to align the

goals.

Continued effective running of organizations cannot be

dependent on a handful of people. Leadership has to

come from within the organization. Leadership and

effective management styles have to be instilled in the

culture. They have to be integrated in the good business

practices and strategies throughout the organization.

To address continuity in leadership, NCDOT has

focused on developing processes that ensure the on-

going development of leadership and competencies.

This is important for the long-term success of the

organization and necessary as the leadership of the

organization changes. With the focus on talent

management, recruiting, employee development and

succession planning, the agency expects to continue to

be a model best practice agency delivering the

transportation needs of its stakeholders.

Improving Assets through

Changes in Preservation and

Maintenance Strategies

For many years chip seals and crack sealing have been a

core business function of the agency. Recently, the

NCDOT has refined its Bridge Preservation, Pavement

Preservation and Maintenance strategies. The agency

included chip seals, slurry seals, microsurfacing and

thin hot mix asphalt to its preventive and maintenance

programs where the pavement conditions are in “good”

to “fair” condition.

Based on the Pavement Condition Rating, the severity

of distress and projected traffic conditions, specific

treatments are determined and applied to each roadway.

The agency’s goal is to apply preservation strategies

early in the life of the pavement where possible, to

extend the life of the pavement in “good” condition at a

much lower cost.

Figure 11 shows the pavement conditions for the

agency. The figure shows the good and fair condition of

pavements in 2008 trending upwards. In 2009, the

numbers of miles resurfaced by the agency declined due

to the economic downturn. This is expected to lead to a

slight decrease in the percentage of good pavements.

The North Carolina DOT faces the challenges

confronted by many DOTs nationwide of rising material

costs, aging infrastructure and reduction in funds to

manage the transportation assets. With the changes

2009 2010 2011 2012 2013 2014 2015

% of System Above 80

2009 2010 2011 2012 2013 2014 2015

LOS

100

2000 2002 2004 2006 2008

PCR Good

PCR Fair

PCR Poor

Figure 13 Overall pavement condition rating.

Asset Management for Sustainability, Accountability and Performance 24

made to overall asset management strategies and the use

of performance measures agency-wide, NCDOT expects

to extend the use of dollars and make good decisions to

improve the condition of all its assets within the

constraints of the budget.

Outcomes of Better Asset

Information and Forecasting

One of the important outcomes of implementing

strategic performance measurements linked to the goals

of the agency has been having better information to

make decisions. It is important for an organization to

make projections about the future condition of its assets.

It allows the organization to develop strategic and

tactical plans to address its transportation priorities

systematically.

As shown in the Figure 12, based on the current data,

the DOT is projecting that if the funding levels remain

at current levels, the percent of pavements in good

condition will fall to from 70% to 40% by 2015.

As shown in Figure 13, the agency is also projecting

that if the funding levels remain at the current levels, the

Roadway Level of Service will fall from a composite

score of 82 to a score of 72 in seven years. Projections

as shown in figures 11, 12 and 13 help the agency make

informed decisions, educate its stakeholders and also

collaborate with them to plan for and implement

acceptable corrective action.

Summary: Leadership and

Accountability Contribute to

Successful Management of

Transportation Assets

Based on the experiences of NCDOT, listed below is a

summary of some of steps that contribute to the

successful management of transportation infrastructure

and efficient and effective delivery of transportation

services:

• Have simple, clear, consistent Mission and Goals;

• Align strategic direction to Mission and Goals;

• Communicate direction, Mission and Goals

repeatedly. Use multiple strategies to communicate;

• Create a culture where objectives of all business

units are linked to the Mission and Goals of the

organization;

• Streamline core operations such as Planning,

Project Prioritization, Project Design and Project

Delivery;

• Link Performance Measures to the organization’s

Mission and Goals;

• Clearly link job and performance expectations to

Performance Measures;

• Link accountability and responsibility to

performance starting at the topmost level of the

organization and cascade them down to every

employee;

• Streamline project prioritization. Build simple

quantitative models for prioritization. Keep the

prioritization process transparent;

• For good asset management, include projects,

programs and services in the prioritization process;

• Obtain feedback on the prioritization process.

Review and revise the prioritization process, as

appropriate, based on feedback;

• Plan and prioritize for funding shortages,

• Conduct quarterly or bi-annual meetings to discuss

the overall performance of the organization;

• Focus resources on strategic planning And Asset

Management. To be effective, these resources

should be high in the organizational chart;

• Use and propagate data-driven decision making;

• Ensure that there is horizontal and vertical

integration across the organization;

• Facilitate collaboration through tools, processes and

use of data from a central source for decision

making;

• Centralize select activities for efficiency. Examples

include data collection and data dissemination;

• Focus on developing a productive organization.

Recruit, retain and develop the workforce;

• Facilitate cross-training of employees. Motivate

and facilitate the sense of ownership in the

employees;

• Develop and plan for succession;

• Review and revise Goals to keep current with the

transportation needs;

Incorporate continuous review and revision of all core

operations and performance measures into the strategic

planning process.

Asset Management for Sustainability, Accountability and Performance 25

Chapter 3: Structures and Strategies for Asset

Management

s can be seen from the North Carolina DOT

example, the full-scale integration of Asset

Management involves addressing most major

operations in the organization. It is worth noting what

Asset Management is not before describing how to

adopt structures and strategies for fully integrating it

into a transportation agency. Asset Management is not:

A particular information technology system or product.

Although computerized information systems are a part

of Asset Management, they are components of Asset

Management, not the entire process themselves.

Asset Management is not a rigid checklist of

mandatory steps that an agency must comply with.

Rather it is a flexible framework which can be adapted

to the unique laws, governance structures, information

systems and historical developments of individual

agencies.

Asset Management is not a rigid organizational

structure that must be adhered to by all agencies. It has

become more common to describe Asset Management

as a “program” or a “set of principals” rather than a

“system.” Although a “systems approach” or “systems

management” is generally used in management

literature, in the transportation field those terms often

have been confused with specific pavement, bridge,

safety or maintenance management systems. This

ambiguity has led to a lack of understanding of Asset

Management and the practice of performance

management.

Asset Management is broader than any one

computerized management product or any one table of

organization. There is not one perfect organizational

structure that an agency can adopt to promote Asset

Management. For instance, a state which operates with

strong local government control over many assets, will

need an outreach function to its Asset Management

activities if it seeks to extend good Asset Management

practices to the local highway network. A state which

has a strong element of privatization will need to

As the an agency

moves in the

direction of more

sophisticated asset

management

practices, its form

often changes as well.

Positions and

processes are often

created to ensure

that all parts of the

organization are

moving in the same

direction to support

asset management.

Asset Management for Sustainability, Accountability and Performance 26

consider contractual means by which contractors’

preventive and reactive pavement maintenance

activities are coordinated with the agency’s long-term

Asset Management system. A large state such as

Texas or California is compelled to be decentralized by

its huge geographic scope while a Rhode Island or

Delaware may not be. In other words, one structure

alone will not be sufficient for all states.

Many different functions and activities must work in

concert for successful Asset Management. Important

connections across these functions can be provided by

Information Technology which must gather knowledge

from each function and make it available to all others.

The information systems become the linkage which

supports the coordinated, seamless approach to Asset

Management which is desired. An optimum

organizational structure would be one in which all

these various functions are commonly united with a

focus upon how their activities contribute to Asset

Management. The optimized structure for Asset

Management would have all team members or

divisions clearly understanding their role in the larger

strategy, which involves a life-cycle approach to

sustaining transportation assets for the lowest cost. The

Transportation Asset Management Guide notes that:

“Transportation officials manage a wide range of

“assets” to meet public, agency, and legislative

expectations. These assets include the physical

infrastructure of the transportation system (e.g.,

guideways, structures, and associated features, utilities,

and appurtenances) as well as other types of assets:

e.g., an agency’s human resources, financial capacity,

equipment and vehicle fleets, materials stocks, real

estate, and corporate data and information.”

This description recognizes that all of the

organization’s resources need to be managed with

consideration of how they contribute to Asset

Management. For instance, front-line maintenance

crews can be trained to contribute significantly to Asset

Management. Maintenance workers who fix potholes

with proper full-depth repairs contribute significantly

more to the pavement’s performance than they would if

they only performed surface patching. To conduct full-

depth repair they need to be better trained and equipped

for:

• Properly establishing a safe work zone;

• Using pavement saws to completely remove the

old pavement;

• Stabilizing the base of the repair;

• Handling hot mix to keep it at the proper

temperature;

• Conducting proper compaction;

• Sealing their repair.

If the crews are to perform such work, many divisions

must act in sync. The policy division must make clear

that maintenance crews are expected to be making full-

depth repairs when possible. The training division

must provide adequate training. The equipment

management division must ensure maintenance crews

receive the proper equipment, and therefore the

department’s equipment inventory becomes an adjunct

of Asset Management. The Maintenance Management

System or Cost Accounting System must not penalize

them for the extra time taken to conduct full-depth

repairs, versus surface repairs. The crew’s recording of

their work and its improvement to pavement structure

requires support from the Information Technology unit.

The purchasing rules need to accommodate the

maintenance crew’s acquisition of materials in a timely

manner. In short, this one critical function requires an

integrated network of cooperation and support. The

transition from “throw and go” surface pothole

patching to full-depth in-house pavement repairs

requires a change in mindset, training, maintenance of

traffic practice, equipment, materials, information and

administrative support.

Structure or Process?

A senior leader who wants to embrace Asset

Management will face a fundamental question first:

Do I organizationally restructure my department’s

table of organization for effective Asset Management

or do I operationally restructure my department so that

the existing divisions operate in a fashion which

supports Transportation Asset Management?

In many cases, a department executive may not have

the legal authority or political ability to restructure a

table of organization. However, he or she can create

internal processes and reporting structures to keep all

units cooperating for Asset Management. In other

cases, a decision maker may want to physically change

Figure 14 A simple structure for Asset Management.

Asset Management for Sustainability, Accountability and Performance 27

Figure 14 Leadership and data provide essential

coordination of other functions in an asset

management environment. Leadership points the way

and common data systems keep all divisions

communicating effectively.

the table of organization to optimize Asset

Management.

In some instances, agencies pursuing Asset

Management have created high-level Asset

Management positions which elevate the status of the

function in the organization. An international scan in

Transportation Asset Management published in 2005

This concept of having disparate divisions all

simultaneously focusing on their component of a larger

process such as Asset Management has been referred to

found that in all the agencies visited there was a

dedicated management position or office responsible

for Asset Management. If such a structure is not

possible, an alternative approach is to operationally

assign all relevant divisions with Asset Management

goals, objectives, responsibilities, reporting

assignments and coordination assignments. In effect,

everyone’s job is defined as contributing to Asset

Management.

FHWA, “Transportation Asset Management

In Australia, Canada, England, and New Zealand”

2005.

as Horizontal Alignment. As most organizations are

traditionally hierarchical, commands, control and

coordination tend to flow from the top down and

information flows from the bottom up. In a function

such as Asset Management, coordination and

cooperation also needs to flow “across” the

organization as each division coordinates its timing and

strategies with the related divisions. Each major

division such as Maintenance, IT, or Design all are

links in a chain of managing an asset over the various

stages of its lifecycle. Therefore in an Asset

Management organization, traditional tables of

organization generally are supplemented with features

such as Strategic Plans, on-going coordination

meetings, reporting processes and other strategies to

keep the disparate divisions focused upon cooperating

for Asset Management. The requirement to coordinate

horizontally needs to be ingrained into divisions, in

addition to their normal requirements to coordinate

vertically within their silos.

Some of the management tactics to ensure horizontal

alignment include:

• Developing performance agreements with

managers which are tied to the

accomplishment of organizational Asset

Management targets and functions. When

managers have performance agreements that

require them to coordinate with peer divisions

on Asset Management, such cross-cutting

coordination becomes a required way to

operate;

• Conducting regular, formal team progress

meetings in which managers review the

organizational Asset Management metrics and

report to peers and bosses their efforts to

achieve them;

• Developing Balanced Scorecards, not only for

the entire organization but for every unit and

manager within the organization. These

Balanced Scorecards can be based upon the

competing Asset Management metrics that

managers need to balance;

• Briefing central authorities such as the state

budget office, legislative committees or the

governor’s office on the organization’s Asset

Management performance to ensure that the

Asset Management for Sustainability, Accountability and Performance 28

• central authorities are aware of the agency’s

performance, and its Asset Management

challenges;

• Publishing regular reports, both internally and

publicly, which track the achievement of key

asset measures, and explain steps to improve

performance when targets were not achieved;

Asset Management Roles and Responsibilities

Planning

Long-term strategic planning

Resource evaluation and tradeoff recommendations

Maintaining management systems (HERS, PONTIS, Pavement Management)

Project selection

STIP development

Gathering system conditions

Maintaining asset inventories

Design

Coordinating treatment designs and treatment timing with Asset Management staff

Delivering those treatments on time

Using current cost estimates

Remaining current with proper mix design, treatment types

Updating designs, standards, manuals to reflect current Asset Management

strategies

Construction

Ensuring construction means and methods meet specifications

Accept only materials which meet Asset Management specifications

Recording as-built under drains and other items which will need on-going

maintenance

Write contract specifications for long-term asset performance

Information

Technology

Operate department’s Knowledge Management processes

Quality Control/Quality assurance of data

Understand Asset Management; Integrate and align IT systems to reflect Asset

Management practices

Provide standard and ad hoc reporting abilities

Integrate legacy systems

Develop new systems to support Asset Management

Provide executive and user data reports

Maintenance,

Operations

Conduct preventive maintenance

Ensure reactive maintenance contributes to long-term life-cycle optimization of

assets

Human

Resources

Provide process for Asset Management training to maintenance staff

Ensure that personnel categories reflect more sophisticated maintenance skills

needed for front-line Asset Management practices

Facilities,

Equipment

Ensure that maintenance equipment is adequate for proper full-depth pavement

repairs and bridge preventive maintenance by in-house forces

Ensure equipment is provided

Asset Management for Sustainability, Accountability and Performance 29

• Establishing Asset Management practices into

law, or agency policy. This can

“institutionalize” Asset Management so that

its practice extends beyond one executive or

one administration.

The Asset Management Guide notes that Asset

Management is:

• Comprehensive;

• It is a philosophy or approach;

• It is driven by policy;

• It focuses upon the long-term;

• It is pro-active;

• It is driven by good information;

• It is explicit and visible;

• And it is viewed “as the way we do

business.”

Each of these individually and all of them collectively

call for an organizational structure and management

practices that set clear Transportation Asset

Management goals and then cascades them through the

organization. The organization also needs a reporting

or feedback mechanism which measures accom-

plishments and ensures accountability.

These needs call for both a “form” and a “function” for

the department’s organizational approach to Asset

Management. The structure of the organization needs

to reflect the activities which must occur to effectively

implement Transportation Asset Management. The

functions need to complement and reinforce the

cyclical and continuously improving steps the agency

must take.

There is not one specific organizational structure which

best suits such a cyclic process, rather such a process is

Different Strategies for Different Structures

Asset Management has been found to flourish in a wide variety of states with different

organizational structures. The following different organizational structures are common in the

United States, yet each structure can accommodate Asset Management.

• Some states have highly centralized structures with decision-making residing in a central

office;

• Other states operate with decentralized structures with great autonomy in the districts;

• Some states have jurisdiction over all roads including low-volume local ones such as in

Pennsylvania, Virginia and North Carolina;

• Some state DOTs only have jurisdiction over the higher functional classes;

• Some states rely on privatized services for the management of large corridors, and their

Asset Management strategies must incorporate their private sector partners;

• Some states operate under enterprise resource programs (ERPs) in which state IT systems

are integrated into statewide ones for functions such as tracking time and equipment;

• Other states operate under legacy IT system structures in which asset information is pulled

from a variety of existing internal systems;

• Some states have strong commissions which exert great influence over program budgeting

and project selection;

• Other states have very active legislatures which select projects and decide on program

funding allocations;

• At least one state has statutory requirements for equalized spending across geographic

regions.

Asset Management for Sustainability, Accountability and Performance 30

applicable to many types of organizational structures.

While the organizational structure may differ, it is

necessary to have a structure which includes the

functions of: Setting Goals; Analyzing Resource

Tradeoffs; Measuring Accomplishments and Adjusting

Strategies and working collaboratively towards the

same Asset Management goals.

It is important in the organizational structure to have all

divisions processing their Asset Management efforts

through a common goal-setting and resource-allocation

process. Such a process has several elements which

ensure cooperation and alignment of disparate

functions. These include the setting of common

strategic goals, the joint participation in the

development of work plans for each unit, the common

communication of results and the joint, common

evaluation of accomplishments. Such processes

accomplish organizational alignment and the cross-

cutting cooperation needed for effective Asset

Management.

The various divisions all have an important role in

Asset Management. Their various units need to be

working in concert and with common goals to achieve

the optimum organizational outcomes. The successful

highway agency which achieves such alignment

generally operates with the following strategic

approach:

• It has an emphatic and well-communicated

Strategic Planning Process which clearly informs

the organization about its intended strategic

direction;

• Asset Management is clearly articulated as a

Strategic Goal;

• The Strategic Goals are broken into annual or

biennial Objectives, which are precise and

quantified. They serve as milestones and interim

goals toward the longer-term achievement of the

Strategic Goals;

• The resource allocation and tradeoff process is

formal, widely communicated and cyclical;

• Accountability is clearly and explicitly required.

The Objectives are clearly assigned to people and

units;

• Coordinating strategies, reports and meetings are

required to keep the disparate units focused upon

the common goals.

• Data is viewed as a key asset. All decisions are

expected to be based on data. Units which

generate asset data are held accountable for the

accuracy, frequency and timeliness of the data;

• Leadership actively supports Asset Management

and embraces it as a critical strategy for

organizational success.

The Critical Role of the Leader in

Asset Management

While the structure of the organization can vary, the

role of the leader generally cannot. Generally, the

establishment of a strong Asset Management ethos

depends on leadership, either from the individual

executive, from an executive body such as a

commission or from legislative mandate. It takes

leadership to overcome the organizational inertia

which tends to prevent individual units from working

seamlessly and selflessly together on initiatives which

transcend the boundaries of any one unit. It takes

leadership to adopt new practices which are not

common in the organization. It takes leadership to get

divisions and individual personnel to change past

practices. It takes leadership to make difficult

financial-tradeoff decisions.

For leaders to change an organization requires them to

understand why organizations do what they do and

what it takes to get them to adopt new practices. For

the past 50 years, the field of organizational theory has

offered increasing insight into why organizations, and

particularly bureaucracies, either adopt change or resist

it. Many organizational theorists propose some

variation of the three overriding premises presented by

Anthony Downs in his book, “Inside Bureaucracy.”

• Bureaucratic officials are rationale and will

respond to incentives and disincentives provided

by the leadership;

• However, bureaucratic officials have complex

goals, only some of which relate to responding

to the leadership and to fully cooperating with

Asset Management for Sustainability, Accountability and Performance 31

peer units within their organization. Goals such

as loyalty to their own units, simplifying their

own decision making, and adherence to their

original, narrow mission can outweigh

obligations to the larger organization;

• The “social function” of the bureau will greatly

influence the internal behavior of the individuals

within it.

In other words, the various complex, interactions and

cooperative functions which must occur across units in

an Asset Management framework are not naturally

occurring tendencies to officials whose normal

incentives are to work within their own units.

However, because division officials are rational they

will respond more positively to peer units and

cooperate more fully with them when the organization

creates greater incentives for them to do so. Since,

their peers are unable to create such incentives, it up to

a higher level official – or a leader – to create the

environment in which their incentives are to cooperate

fully with the other units in a long-term approach to

Asset Management. Only a leader or higher level

official can create the new incentives and disincentives

which are necessary for Asset Management.

To take a simple example, a maintenance official will

have no rational incentive to crack seal if the long-term

performance of pavements is not part of his or her

incentives or disincentives. In the short-term, crack

sealing provides few benefits to the maintenance

official who may be pre-occupied with snow removal,

clearing incidents, repairing damaged guardrail or

addressing mowing. Furthermore, if the timing of

crack sealing is critical, then the prescriptive timing of

the crack sealing operations can become a new and

unwelcome intrusion for the maintenance official,

further complicating his or her schedule. By their

nature, maintenance officials tend to be focused upon

daily, short-term events – not long-term future

scenarios. Therefore, in a traditional organization they

have few rational incentives to focus upon the delayed

benefits created by crack sealing.

However, when a leader re-defines units’ incentives

and re-defines their “social function” their perspectives

change. When the role of maintenance is re-defined to

contribute to long-term pavement performance through

crack sealing or drainage maintenance, then

maintenance behaviors change. Likewise, when the

leader creates new incentives to cooperate with other

units such as planning, design and construction then the

rational behavior of the individual divisions changes

further.

Organizational consensus and strong leadership are

important because it takes nearly all the functions of a

highway agency to effectively manage a pavement or a

bridge through its lifecycle. This is because pavements

and bridges require different maintenance, treatments

and repairs at different times of their lifecycle. These

activities all require different skills, therefore they

reside in different organizational units of a state

highway agency.

For instance, the construction or rehabilitation of a

pavement involves planning, pavement selection,

design, construction, materials acceptance and

Traffic Management Center Analogy

Twenty years few Traffic Management Centers

existed. State DOT operations officials did not

interact in real time with local city traffic

officials, police agencies or emergency

responders. Nor, did they provide real-time

information to travelers.

When those same officials’ roles were recast

by their immersion in Traffic Management

Centers, the very nature of their jobs were re-

defined from solo operations to collaborative

operations with other similar stakeholders. As

Downs said, their “social function” was re-

defined.

This can serve as an analogy for Asset

Management cooperation between divisions.

By placing various disciplines within a common

Asset Management system which requires

frequent interaction, their behavior changes as

their “social function” is re-defined.

Asset Management for Sustainability, Accountability and Performance 32

recording of the pavement’s completed condition.

Then, the pavement should go through a 30-year

predictable and collaborative process throughout its life

as the disciplines of Planning, IT, Maintenance,

Design, and Construction all collaborate to manage that

individual pavement and its maintenance.

At least every other year of its life, a pavement should

be inspected and its rate of degradation recorded.

Deficiencies and conditions are fed into the Pavement

Management System for a Remaining Useful Life

forecast for the pavement. These deficiency data can

assist the logic inherent in the Pavement Management

System to predict the expected performance of the

pavement – and importantly to identify pavements with

accelerated degradation for analysis. Pavements which

are degrading at a faster-than-expected rate can be

culled for analysis as to why they are performing

poorly.

This analysis can add to the institutional knowledge of

the organization by determining if the poor

performance is attributable to inadequate maintenance,

design, construction, materials, drainage or vehicle

overloads. Once identified, corrective action can be

taken. Throughout this process, the Information

Technology systems are key because they link the

latent knowledge acquired by the pavement inspection

with the decision makers who need to act.

Such analysis and prediction requires the insights of

many disciplines – planning, IT, pavement design,

maintenance, materials, and construction. In addition,

as lessons are learned, periodic training of pavement

designers, materials testers, maintenance crews and

maintenance managers are needed to share the insight

across the organization. Active learning and

Knowledge Management are an important aspect of

Asset Management

Interlocking Decisions

The activities of one division can affect the other facets

of Asset Management. There are many fundamental

intricacies between them such as:

• Programmatic decisions to under-fund

pavements lead to accelerated degradation and

increased reactive maintenance demands upon

in-house forces;

• If in-house forces do not conduct full-depth

repairs, the full benefits of their pavement-

repair efforts are diminished;

• If maintenance forces do not maintain

drainage such as under drains, ditches and

outfalls, the accumulated moisture can

damage pavements and decrease their

longevity;

• If maintenance forces are not properly trained

in crack sealing, or if their managers defer

crack sealing, pavements can degrade at an

unacceptable rate;

• If maintenance crews are not scheduled for

basic bridge maintenance such as expansion

joint cleaning, the washing away of salt or the

cleaning of scuppers, bridges deteriorate more

quickly;

• If design or construction lag in adopting

advanced pavement specifications or other

innovations it can reduce the cost-

effectiveness of pavement investments

significantly over time;

• If regional divisions are reluctant to “spec

out” poor performing local aggregates they

will continue to experience accelerated

pavement degradation;

• If the IT division does not provide easily

accessible and timely data, ad hoc analyses of

trends such as identification of poor-

performing pavements can be hindered;

• If bridge condition inspectors are not cross-

trained to note maintenance needs, important

bridge maintenance issues can go unreported;

Concurrently, the collaboration and consultation of

different units can lead to synergies which significantly

improve pavement and bridge performance beyond the

level that any one unit alone could achieve. For

instance:

• Systematic analysis of the root cause of poor

pavement performance by multi-disciplinary

teams can lead to innovations in pavement

design, materials specifications, construction

means and methods, and preventive treatment

strategies;

• IT evaluation of user needs can lead to

enhanced data-collection and reporting

systems;

Asset Management for Sustainability, Accountability and Performance 33

• Users’ needs for forecasts can lead to

improved pavement management forecasting

systems;

• The critical need to schedule preventive and

reactive treatments to precise time windows

can lead to more reliable project-delivery

strategies.

Resource Allocation Processes

It was noted in many of the case study agencies that the

process of allocating resources across programs was

often well documented and transparent. The process is

often complex, difficult and sometimes contentious. It

often results in some asset categories, some programs

or some regions receiving fewer resources than they

desire. However, this process also provides opportunity

for institutional learning and communication in an

Asset Management organization.

In several of the case study agencies, a multi-

disciplinary team was involved in making resource

allocation decisions. The team often included

representatives from different programs, but also

representatives from both central office and districts.

The participation leads to increased understanding of

all parties of the difficult trade-off decisions the

department faces. It also increases understanding of the

inter-related roles that each unit plays in Transportation

Asset Management. It is important during the resource

allocation decision process that there be coordination

between the various divisions such as Planning,

Design, Construction, Pavement Management, Bridge

Management, Safety and others. All these groups can

be included in the Resource Allocation Analysis. The

data from their management systems and the outputs of

the analyses from Pavement Management, Bridge

Management, HERS-ST and others should form the

basis for the resource allocation analysis. The resource-

tradeoff analysis in these leading case study examples

generally were:

• Open

• Formal

• Participatory

• Cyclical

• Data-driven

• Policy based.

In other words, when the resource allocation analysis

was concluded, the major asset management

participants had a role in making the complex and often

difficult tradeoffs required.

Next, periodic tracking meetings and reports

throughout the year further solidify the common

understanding of the various divisions as to the

progress the agency is making in managing its assets.

In these open and inclusive performance-tracking

meetings, a common institutional understanding of

performance and outcomes can be achieved.

As system conditions are assessed and inventories are

re-populated with a year’s worth of projects and

maintenance activities, then system conditions are

reviewed to determine if goals were met. Again, the

results of these steps were shared in open meetings or

in widely disseminated reports so that all internal units

share an understanding of how the resource allocation

and Asset Management processes actually performed.

Did they meet goals? Are conditions adequate? What

asset problems were identified that the collective

organization must address? The widespread publishing

of system goals and the regular conduct of

collaborative meetings to discuss progress towards

meeting them keeps the organization focused upon

Asset Management. Program managers for pavements,

bridges, maintenance, safety and other programs could

all see the results of accomplishments, and understand

how resource allocation decisions and organizational

focus on Asset Management resulted in improved

conditions overall.

In summary, the organizational structure and

operational strategies for Asset Management in the

case study agencies were comprehensive and multi-

disciplinary. As well, they involved many key

management staff who play a role, either in Central

Office or the districts. It was clear that leaders in the

field of Asset Management have identified a variety of

successful tactics to inculcate the cross-divisional

cooperation that is required. These tactics can include:

• The public and participatory conduct of

economic tradeoff analyses which explain why it

is in the larger organization’s interest to transfer

expenditures to highest-return investments, even

if it requires the diminishing of historical

categories of expenditures;

Ohio Maintenance Deficiences

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2001 2002 2003 2004 2005 2006 2007

Drop Offs

Guardrail

Pavement Markings

Signs

Asset Management for Sustainability, Accountability and Performance 34

• Frequent cross-divisional meetings which are

chaired by the leader in which the cross-cutting

cooperative activities are monitored for success

and impediments to their success are identified;

• The leader formally redefines the roles of units

and individuals to emphasize the cross-divisional

cooperation with other units;

• Shared institutional goals are set as common to

all units, not only to some;

• The long-term accomplishment of Asset

Management goals are broken down into

meaningful, short-term activities which are

clearly assigned to individuals and units, then

those individuals and units are held accountable

for their accomplishment;

• Published reports, Web pages, employee

meetings and performance evaluations are used

to communicate the department’s embrace of

Asset Management as the process it uses to make

infrastructure decisions.

Utah DOT

Case Study

The following case study of the Utah DOT

illustrates how one transportation agency

successfully coordinated multiple functions

across divisions and districts to create the

cross-cutting collaboration needed to

successfully deploy Asset Management. The

Utah DOT experience with improving its

information systems also illustrates practices

which will be discussed in Chapter 4,

following this case study.

Asset Management for Sustainability, Accountability and Performance 35

Utah DOT Case Study - Embracing New Structures and

Strategies for Asset Management

When the Government Performance Project conducts

its annual evaluation of the states, it has consistently

rated the State of Utah as an 'A' for its infrastructure

management practices.

The grade is in large part a reflection of the Utah

Department of Transportation’s comprehensive Asset

Management process the agency has spent the past

seven years developing. It cascades throughout the

organization’s infrastructure management practices

and provides the maintenance workforce direction,

performance goals, condition data and robust cost

information with which to plan, conduct, measure and

evaluate their work. The Utah DOT Asset

Management System also extends through the

pavement and bridge programs, allowing decision

makers to conduct complex analysis of various

funding and optimization scenarios. The Utah Asset

Management System also links closely with the Safety

Management System so that accident histories and

crash trends are considered whenever a maintenance

activity or a construction project is planned.

In short, the Utah DOT has developed a

comprehensive and systematic Asset Management

process that has ingrained Asset Management

practices throughout the organization. Utah officials

caution, however, that their current system is the result

of continuous effort since at least 2002. They consider

their Asset Management system to be a continuous

work in progress. They say that their journey to

deploying a comprehensive Asset Management

process holds several lessons.

• High-level support and active leadership is vital.

The top leadership’s involvement gives the Asset

Management effort visibility and legitimacy.

• The deployment of Asset Management dovetails

naturally with the development of an agency’s

Performance Management System. In Utah, the

two systems developed at generally the same

time, with each complementing the other.

• Asset Management and Performance Management

take time. The Utah DOT has been actively

developing both since at least 2000 and still it

considers itself to be on a continuous journey of

improvement.

• Start with the data systems that you have and

improve them as you go. The Utah DOT has

developed a comprehensive set of management

systems but they represent the continued

evolution of earlier ones. The DOT began in 2000

with its legacy data systems and did not wait upon

next-generation systems to start its Asset

Management pursuit.

• Differentiate between the computerized asset

management data systems from the Asset

Management business processes. They stress that

both data systems and standardized Asset

Management business processes are required to

be successful. The Asset Management data

system may provide decision makers tools to use

but the business process ensures that decision

makers actually use the tools to improve their

investment decisions.

Utah’s Asset Management

Beginnings

In preparation for the 2002 Winter Olympics, the Utah

DOT completed a $1.5 billion design/build

reconstruction and expansion of I-15 through the heart

of Salt Lake City. As the department’s leaders readied

the modern facility for its opening, they also pondered

their long-term approach to ensuring it remains in

sound condition throughout its service life. They

describe having an epiphany in which it occurred to

them that they should undertake the same

comprehensive effort to maintain I-15 as they put into

building it.

Department Director John Njord led the top

management through a three-day workshop and self-

evaluation of the department’s Asset Management

Asset Management for Sustainability, Accountability and Performance 36

practices. One of the participants described it as a

painful process. It was painful both in the length and

detail of the analysis as well as in terms of the team

recognizing that it lacked a comprehensive Asset

Management approach. From the process, however,

the important seeds were sown to create a

comprehensive Asset Management program.

First, the top-down involvement of the Utah DOT

leadership served an important “change management”

function. In change management, it is important to

provide institutional legitimacy to a change, which the

director’s involvement provided. Second, the effort

was followed by monthly meetings until the Asset

Management process was well under way. Those

meetings helped to ensure that momentum was gained

by the fledgling effort. Three, the workshop and

subsequent efforts served as clear points of change for

the department. They represented that one era was

ending and that a new era of Asset Management was

beginning. Such demarcation is an important feature

of changing behavior in a large organization by clearly

communicating that the organization has embraced a

new direction. Without such emphatic “pivoting” of

the organization, bureaucratic inertia can stifle change.

Finally, the UDOT leadership insisted that Asset

Management become “institutionalized” by creating

the policies, manuals, organizational structures and

data systems to provide common definitions, common

understanding, and a common approach to Asset

Management throughout the department.

Although the Utah leadership may not have described

their efforts at the time as conscious “Change

Management,” the actions they took with their top-

level involvement and engagement were typical of

classic “Change Management” strategies. Those

actions appear to encapsulate the type of engagement

necessary by Asset Management advocates to ingrain

the practice in their organization.

Performance Management

Linkage

Also in the early 2000s, the Utah DOT was embracing

performance metrics and Performance Management,

say its officials who were involved at the time. Like

so many other officials in other agencies, they quickly

recognized the linkage between Asset Management

and producing performance metrics for the

transportation system. They began by setting goals

for what level of pavement and bridge conditions they

wanted to sustain for the highway system. The

emphasis on both achieving and then sustaining those

conditions over time with limited resources strongly

influenced their recognition of the benefits of

performance management. Among their initial targets

were to have 90 percent of the Interstate System, 70

percent of the arterial system and 50 percent of the

collector system meeting smoothness standards. Once

steps are taken to sustain those goals, both Asset

Management and the regular monitoring of

performance inherent in Performance Management

appear to be self-evidently logical to the organization,

Utah officials said. Today, the department produces

both extensive Asset Management data but it also

produces an annual “Strategic Direction and

Performance Measures” report. This report is like an

annual corporate report in that it describes major

issues facing the department and describes the

agency’s performance in addressing these issues.

Within the larger set of performance metrics that it

reports in the Strategic Direction document are high-

level performance metrics on how it is managing its

highway assets.

Creating an Asset Management

Structure

Over its seven year journey, the Utah DOT created

both organizational structures and data systems to

support its Asset Management approach. The two

parallel efforts were closely linked and

complementary, and they illustrate the duality of

successful Asset Management efforts. Successful

Asset Management organizations have not only sound

data systems to provide decision makers good

information but they have organizational processes

which ensure that the logic of Asset Management is

followed during the decision making process. To

develop both the data systems and business processes,

the Utah DOT pursued the following comprehensive

series of efforts.

• It created a Transportation Asset Management

Committee (TRANSMAT). This consists of the

Asset Management for Sustainability, Accountability and Performance 37

UDOT senior leaders, members of the Asset

Management Team and several Asset

Management Groups. TRANSMAT is

responsible for overseeing and approving all of

the Asset Management efforts within the

department. It ensures that “people, plans and

processes” are in place to meet the asset

management goals.

• It established an Asset Management Team under

a Director for Asset Management. Within the

Asset Management Team is an Asset

Management Engineer’s position.

• It developed an Asset Management Strategic

Plan. This outlined the goals and objectives for

the continuous, incremental improvement of the

Asset Management process.

• An Asset Management Implementation Plan was

developed. This plan was intended to outline and

track the steps necessary to achieve the objectives

of the Strategic Plan.

• Reorganization to achieve the Asset Management

objectives was completed. The pavement asset

group section was reorganized to align with the

new strategies and tactics.

• An Asset Management Manual was developed. It

explains to department personnel how to

implement the asset management practices within

the department.

• A UDOT Asset Management Strategic Planning

model was developed. This served as the guide to

developing project recommendations within the

UDOT Long Range Plan. It relied upon

forecasting long-term needs and optimizing

investment options between programs to achieve

the highest system conditions possible with

available resources.

• An Asset Management Data base was developed.

It was created to facilitate optimizing both within

various asset categories but also to allow for the

first steps toward cross-asset optimization and

tradeoff analysis.

• The pavement and bridge management systems

were enhanced.

• Development of an Asset Management Strategic

Analysis was completed. This enhancement to the

computerized Asset Management System allowed

“silo” or “stove pipe” analysis of five different

classes of assets. These were pavements,

structures, safety, maintenance and mobility.

Initial example runs of cross-asset optimization

analyses were conducted for demonstration

purposes and to allow further investigation by the

DOT.

• An Operations Management System (OMS) and a

complementary Maintenance Management

Quality Assurance System were created. The

OMS was developed to manage the work program

for maintenance forces, to schedule and report

daily work activities, and to analyze the

maintenance business processes. The Quality

Assurance System measures conditions in nine

different maintenance categories to allow

continuous assessment of maintenance

performance and conditions.

Lessons Learned: Engagement

and Evolution

Utah officials say that their experience taught them

lessons in how to achieve organizational acceptance of

Asset Management. As already mentioned, the top

leadership was engaged, clear messages of change

were articulated and Asset Management was given

emphasis until it became routine. An additional

requirement that the Utah officials said they

recognized over time was the need to fully engage

mid-level region staff. These staff members were

being exposed to new management philosophies, new

pavement management tactics, new types of

computerized pavement management reports and new

demands to provide consistent data. Each of these

new concepts required consistent, on-going training in

order to achieve widespread understanding and

acceptance of Asset Management.

The Asset Management staff faced skepticism in the

regions because of misunderstandings about the

Asset Management for Sustainability, Accountability and Performance 38

project-level outputs of the early phases of the

pavement management model. As with most

pavement management models, the output data,

forecasts and budgets are more accurate over a long

period of time and across an entire network. The

accuracy of any one forecast for a particular pavement

section in a particular year is much less valid.

However, the pavement management reports were

being generated and provided to the regions. Region

personnel would find discrepancies between the

pavement conditions they knew to exist in the field

with what the conditions reported for individual

sections by the pavement management model. Such

discrepancies led to complaints that the pavement

management system, and Asset Management, were

“black boxes” that were unclear and unreliable.

The Asset Management staff went to every region to

meet with the staff and to analyze the problems with

the data, the system outputs and with the region

personnel’s understanding of the pavement

management process. The Asset Management staff

said they found that many of the data inputs were

incorrect, therefore the model outputs were incorrect.

Because the pavement management system had not

been extensively relied upon before for pavement

funding and selection decisions, it was not maintained

adequately. The estimates of how much treatments

actually cost were outdated, or imprecise. The

pavement condition assessments for the model were

manually collected, and wide variability in the rating

of pavements was found. They reported that one

section of pavement over four years was rated as a 70,

100, 70 and 50, even though it had experienced no

treatments over that time. They also realized that

many staff did not understand the specific section

treatment recommendations which come from a

financially constrained optimization pavement model.

Under one funding scenario, certain treatments of

certain pavement sections were recommended. Under

another funding scenario, other treatments were

recommended. The logic behind the differing model

recommendations was not fully understood, and

therefore the entire process was viewed as unreliable,

the Asset Management staff report.

At that time, the regions also were responsible for

collecting some of the pavement distress data. Visual

inspections were conducted of the first tenth of a mile

of sample sections. The Asset Management staff said

they realized that some region personnel did not

understand the rating process, they performed it

inconsistently and they did not rely upon the data for

their own decision process. “I know what was said,”

reported one Asset Management staff. “ ‘Central

Office wants this data and I don’t know why but let’s

send them some data.’ That was the central problem,

they did not see any benefit from this. It was only

work.”

The Utah leadership realized that the journey of

continuous improvement required additional training,

as well as improved data processes. They changed

from manual pavement condition assessment to

automated assessment in order to get more frequent,

comprehensive and consistent pavement condition

data. Now, with their automated pavement

assessment process they can get condition on a full

mile of every section, as opposed to the one-tenth of a

mile they could produce manually. Also, the data is

more consistent, and frequent. The entire highway

network can be assessed in two years. They analyze

the interstate system in both directions annually.

The Utah experience also shows the importance of

explaining what management systems can do well,

and what they can’t. The use of a pavement

management system was important to setting overall

system goals and budgets. However, it became

apparent that the short-comings of a pavement

management system at the project level needed to be

clarified. The pavement management system’s

project-level recommendations were not consistent

with what region personnel were seeing in the field,

leading to skepticism about the validity of the

management systems, say the Utah Asset

Management staff. “The regions looked at the output

and said this isn’t right,” said one Asset Management

official.

The evolution of Utah’s Asset Management process

illustrates the need to raise the understanding of asset

management, and its components such as pavement

management, across a broad spectrum of departmental

staff. Most departments are decentralized in many

aspects. The decentralization provides the benefit of

keeping decisions rooted in the reality of what is

actually happening in the field. Decentralization also

Asset Management for Sustainability, Accountability and Performance 39

increases the complexity of the training process,

particularly when management systems are deployed

as a new tool in the decision-making process.

The department has evolved and refined important

aspects of its pavement management, and pavement

project-selection processes over time to improve its

decentralized process. It has developed several

institutional processes, groups and reports in order to

perpetuate a continuous evaluation of how well the

pavement process is working. In the decentralized

Utah structure, each region has its own pavement

management engineer who does pavement designs for

the region. However, the region pavement engineer

and the materials engineers participate in a statewide

pavement team. This participation provides key region

pavement decision makers access to information about

statewide practices. The participation not only serves

to disseminate statewide information to the regions, it

allows peer exchange between the regions, as well as

region feedback to central office. The intention of the

statewide participation is to generate consistency in

decision making, to solicit broad input into pavement

issues and to provide feedback between field and

central office decision makers. The continuous

interaction provides information which is used to

continually refine data elements, such as true project

costs, the actual pavement conditions and accurate

information about pavement performance compared to

forecasted performance. This feedback continually

improves the overall decision making process.

In addition to the periodic group meetings between

region and central office personnel, the central office

staff travel to each region annually for field visits.

This allows the central office staff to review

conditions on the roadway with the regions, and to

evaluate the correlation between the reported and

forecast conditions, and actual conditions in the field.

These formal and informal exchanges are intended to

create a broad consensus and understanding of the

pavement management process. The central office

asset management personnel said such visits have

provided valuable insight and quality-control

information. From such interactions and visits they

determined that their model was providing poor

forecasts of cracking. What the model showed to be

good performing sections were actually found to be

suffering extensive cracking when viewed in the field.

The Utah asset management officials said while

communication is critical to instilling asset

management in an organization, the communication

needs to be two way. The central office experts need

to communicate about the powerful analytic and

decision-making potential of the pavement

management system, and its data bases. At the same

time, the central office personnel can learn a great deal

from the day-to-day field experience of the region

personnel. The continuous and open communication

between central office and field personnel is an

important component of continually improving the

pavement management process, they noted.

Like with many other departments, the Utah asset

management approach to optimization is a hybrid of

both computational forecasts from the pavement

management system combined with the professional

engineering judgment of the staff in the field. The

central office provides pavement program scenarios to

each region illustrating an optimized program of

projects generated from the statewide model. The

regions review those lists of suggested projects but

make the actual pavement selections. The

consideration of both the model’s optimized list of

projects combined with the field observations and

experience of the region allows the insights of both

the management system and the field personnel to be

captured in the final pavement program. Once the

regions have identified a six year program of projects,

the central office staff gives it a high-level review to

ensure the program is consistent with the statewide

goals.

Strategies for Adaption

The Utah officials say their ever-improving pavement

management process has allowed them to adapt to two

critical changes. First, as they experience turnover in

region personnel, the existing pavement management

process provides significant analytic and institutional

support to the new personnel. They find that the new

personnel are anxious for insights into past pavement

performance, into their range of investment options

and about the various program scenarios they could

pursue. The central office officials say the pavement

management process provides proven templates for

new region personnel to follow as they master their

new positions. To further ensure consistency in its

Asset Management for Sustainability, Accountability and Performance 40

approach, the department created a Pavement Panel to

help new region personnel select pavements. It

consists of membership from the regions and central

office. It acts like a peer review panel for the new

personnel’s program and project decisions. Suggested

pavement treatments are explained and put up for a

vote by email among the 10 member panel. If at least

7 panelists agree with the selection, it is approved. If

fewer than 7 approve, than the individual

recommendation is reviewed by Central Office. The

process serves to standardize the approach to

treatments across the department, and to ensure that

extra elements which drive up costs are not included.

Also, the pavement management process has provided

a rational and structured process for the department to

use as it copes with the significantly higher material

costs of recent years. Although its pavement program

has not been reduced in terms of its overall budget, the

purchasing power of that pavement budget has fallen

by nearly half in recent years. The department was

able to make rational – albeit difficult – tradeoffs in its

pavement investment approach based upon its

improved analytical capabilities.

The department classified its system into Level I

routes which include the Interstate Highways and

generally the arterial network. The collectors and

other minor routes are categorized as Level 2 routes.

Pavement treatment priority will go to the Level I

routes which carry about 70 percent of the state’s

traffic volumes. Those routes will be actively

managed and will receive the large majority of the

department’s pavement budget. The low-volume

Level 2 routes will receive primarily low-cost

treatments such as chip seals. In general, the Level 2

routes have average daily traffic of less than 2,000

vehicles, with fewer than 500 trucks.

The asset management staff said the difficult process

of prioritizing the pavement program under such tight

fiscal constraints has brought more region personnel

to seek assistance from the pavement management

system. The pavement management system has

provided an invaluable assistance in providing various

scenarios by which the regions can analyze which mix

of projects can optimize their system with their limited

resources. While the department has relied on its

pavement management system for more than a decade

for functions such as forecasting overall investment

needs, the system now is playing a more critical

analytic role because of the intensity of the pavement

preservation shortfall.

The Utah DOT’s pavement management system and

its logical, systematic approach to managing the

network helped the department explain to the Utah

Transportation Commission the department’s

approach to the dramatic increase in prices

experienced between 2005 and 2008. Using the

analytics from the pavement management system, the

staff explained to the commission the department’s

intention to pursue a lower cost programmatic

approach to sustaining pavement conditions. The

logical and systematic process appealed to the

Commission, which allowed the department to cope

with rising costs by accepting a lower level of

condition on the low-volume Level 2 routes.

Toward Comprehensive Asset

Management

Although the examples discussed thus far relate to

pavements, the Utah DOT has evolved on a parallel

track to a more comprehensive Asset Management

process which includes not only pavements but

bridges, maintenance items and safety elements. Data

from systems affecting all the highway attributes are

collected in a central asset management data based

purchased from one of the national Asset Management

system vendors.

The pavement data includes friction data taken

statewide on a two-year cycle. One lane was tested

each direction, except on divided highways where

both directions were tested. One test section was

performed on each mile. The data base also was

populated with falling weight deflection data taken

system wide, with one reading taken per mile. This

data was provided for project-level design inputs. A

profiler van also collected International Roughness

Index data, as well as rutting and concrete faulting

data. Again, the data was collected annually on one

directional lane, except for the divided highways

which had both directions measured. For many years,

cracking data was collected by the regions annually.

Data was collected for one-tenth of a mile sections.

Asset Management for Sustainability, Accountability and Performance 41

It was the variability of the manually produced

cracking data that led to concerns about the accuracy,

frequency and consistency of the data. The

department has since moved to an automated distress

collection process. It allows data to be collected

statewide, not just on tenth-mile long sections. All the

pavement data – skid, rutting, IRI, cracking and FWD

– is populated into the central asset management data

base.

The department relies on Pontis for its bridge data

system. Bridge inspections are conducted every two

years, except for structurally deficient bridges which

are inspected annually.

Likewise, safety data is populated in a Safety

Management System, which produces a Safety Index

for each mile of roadway. The data includes

information regarding crash severity and crash type by

location. The system calculates a numeric ranking

from the Safety Index for every roadway section. The

sections which are elevated in their safety index are

considered for additional treatments as part of the

other programs including the pavement, bridge and

maintenance programs.

The maintenance data comes from the Operations

Management System (OMS). It stores an extensive

amount of data for each section including:

• Maintenance section delineation;

• Station boundaries;

• A snow plan for each section;

• Shoulder dimensions and profile;

• Drainage and culvert information;

• Guardrail and barrier inventory;

• Sign inventory;

• Noise walls;

• Pavement markings;

• Vegetation management areas;

• Mowable area;

• Litter pickup area;

• Cattle guards and tunnels.

The Operations Management System manages the

budget, the work programs for maintenance crews, it

helps them schedule and it helps measure their

effectiveness. The effectiveness is measured by

evaluating actual conditions against the maintenance

targets, as well as calculating maintenance function

costs. The OMS is used for planning, organizing and

directing resources.

The maintenance functions interact with Asset

Management in several ways. Departmental officials

say the philosophy of preventive maintenance is

deeply ingrained in the organization and its workforce.

They believe front-line maintenance workers

understand that well maintained roads cost less, and

last longer, which complements the Asset

Management approach. The integration of pavement

condition data, safety data and maintenance data all

can influence maintenance decisions. Where the

central Asset Management data system indicates there

are poor pavement conditions, poor skid numbers or

an elevated safety index, the maintenance crews

consider what operations they can perform to improve

those sections. If the maintenance crews perform a

chip seal or other significant treatment, that treatment

is captured through the central data base and fed into

the pavement system. In these different ways, the

activities of the maintenance forces can be influenced

by asset condition levels, and conversely, the activities

of the maintenance forces can measurably improve

asset condition and performance.

Not only do the Utah DOT management systems plan

and record activities at the front-line maintenance

level and the region project-selection level but they

also provide comprehensive 20-year plans for the

department. Both the bridge management system and

the pavement management systems produce 20 year

plans, both by region and statewide. They also

suggest the treatment by pavement section and

structure, treatment cost, overall budget needs and the

commensurate level of condition that would be

achieved by the forecasted program. The forecasts

provide assurance that the asset management program

being pursued by the department will achieve its long-

term goals of asset sustainability. The department

does not use the 20 year forecasts for project selection,

but rather for planning purposes and to assess whether

overall funding levels are likely to achieve the desired

system conditions. The overall result of the various

systems and processes is to produce for the Utah DOT

Asset Management for Sustainability, Accountability and Performance 42

a comprehensive asset management process that

considers pavements, bridges, and maintenance

features and links them to safety considerations.

Lessons

The Utah officials say that many managerial strategies

are important when developing a statewide Asset

Management system.

• Leadership from the top is invaluable, particularly

when the leadership consistently supports Asset

Management until it is firmly in place.

• The Asset Management process needs to combine

both computerized management system

recommendations tempered by the field and

engineering judgment of region personnel.

Having just one or the other probably is not

enough to optimize investment decisions.

• Expecting the developing of an Asset

Management process to take time is important.

Utah officials say they have been actively

pursuing their process for seven years and still are

evolving.

• Open, continuous channels for communication

between the asset management staff and the

region staff are essential.

• An ethos of continuous improvement is

fundamental. Because the management systems,

their data and the organizational practices all

evolve, a continuous improvement mindset is a

fundamental element of long-term asset

management.

• Accountability is helpful, if not mandatory.

Setting standards of performance – both in terms

of asset condition and in terms of asset

management practice – help ensure that the on-

going practice of asset management is sustained.

• Understand that both data systems and

management practices are essential to successful

Asset Management. Data systems provide good

information. Sound management practices

provide good decisions.

Asset Management for Sustainability, Accountability and Performance 43

Chapter 4 Information Needs for Asset

Management

After leadership, sound information and analysis is the

single most critical factor in good Asset Management.

It is difficult to overstate the importance of information

to the many decisions which must be made at the

program level, the project level and the organizational

strategy level.

Needed information for the deployment of Asset

Management falls into at least three major categories.

They are Organizational Direction Information, Organ-

izational Competency Information and Organizational

Asset Data.

Organizational Direction Information - Is the

organization’s commitment to asset management clear?

Has the organization bought in to the asset

management approach? Does it understand the asset

management approach? Is it cascading the approach

actively throughout the organization?

This category of information is closely aligned with the

Leadership component mentioned earlier. It is this

information about Organizational Direction which most

directly involves the leader.

Organizational Competency Information - Does the

organization have the technical and strategic

competency to perform asset management functions?

Does it have long-term goals and short-term

objectives? Can it conduct resource-allocation tradeoffs

and long-term forecasting? If the agency is only

beginning to adopt preventive maintenance, do the

front-line workers have the required training,

equipment and materials? Do the information

personnel have the tools and training to collect the

needed data? Does it have performance measures?

What is the competency gap to embrace asset

management?

Organizational Asset Data - This is the category of

data that is most often recognized as essential to asset

management. In fact, a common misconception about

asset management is that it involves only technical,

computer programs such as Pavement or Bridge

Data and

information are

among the most

important elements

of asset management.

Sound condition

information and the

ability to predict

future performance

are essential

components of asset

management.

Asset Management for Sustainability, Accountability and Performance 44

Management Systems. In fact, asset management

requires all three types of information listed here but it

is the Organizational Asset Data that is the most

technical, detailed and expensive to acquire.

Organizational Direction

Information

Adopting or improving Asset Management approaches

is about changing existing practices and implementing

new ones. An exercise in Change Management is

required. The theory of change management fills

volumes of text books but in the case of Asset

Management a few general principals apply.

Understanding if these principals are at work will

reveal a good deal to the leadership about whether the

Organizational Direction is sufficient to ensure a

successful transition to Asset Management or a

successful evolution to the next stage of it. An

evaluation of the following types of information can

provide insight into whether the Organizational

Direction is clear.

The "Case for Change" Information - To change an

organization the leadership must clearly state the new

direction and make a clear case for change. In “Re-

Engineering the Corporation,” Hammer and Champy

Modes of Communication - Practitioners who

measure human communication note that most

communication is non-verbal. The most powerful non-

verbal messages are body language, tone of voice and

emphasize the need to make the case before an

organizational transformation can occur. Hammer and

Champy say the most compelling argument is when the

leader clearly and factually notes the inevitable failure

that will occur should the organization continue on its

present path. In instances where asset management is

lacking, the failures can be failure to achieve public

support, failure to sustain infrastructure at acceptable

conditions or the failure to receive additional resources.

Probably the most important information needed to

begin an asset management transition is the

information leadership provides about the "where, how

and why" the institution is changing.

Hammer, Michael and James Champy, “Re-

Engineering the Corporation,” 2001

degree of engagement. These same principals apply in

terms of leadership communicating asset management

to a large agency. Organizations are like people in that

they intuitively understand the importance of the non-

verbal messages that are transmitted along with the

verbal ones. If the leadership issues memos about asset

management but does not actively and personally

engage in it, they are sending a powerful message that

asset management is not truly important. To assess if

the information is in place to affect a change in

organizational attitude, the leadership must assess the

tone, tenor, quality and sincerity of the messages it is

sending to the work force. The leadership’s active,

personal engagement with asset management most

effectively communicates its importance.

Sending and Receiving Information -

Communication requires both the sending and the

receiving of information. Merely sending information

without ensuring it is received is broadcasting, but not

necessarily communicating. To be understood,

information must come in a fashion, context and

vocabulary that can be understood. Discussions of

"Asset Management" and "Performance Management"

may be appropriate to planning staff or engineers

accustomed to dealing with abstract systems or models.

For front-line workers who are realistically focused

upon the issue of the day, such terms may not be

effective. Instead, it may necessary to speak in plain

terms about better strategies to repair pavements, to

sustain guardrail or to improve the condition of

signage. Direct, concrete, unadorned examples about

how maintenance forces fit into asset management are

important. To evaluate the clarity of a message, the

“ball cap and flannel shirt” test can be applied. "Would

what we are saying be relevant to the front-line

workers in ball caps and flannel shirts who are

conducting our day-to-day maintenance?" If the

leadership’s message does not pass the “ball cap and

flannel shirt” test, they may be creating an information

gap.

Official Forms of Communication - In a formal

organization many actions are influenced by legally

sanctioned documents and processes. These include

position descriptions, annual evaluations, promotional

exams, a table of organization, union agreements and

formal policies. Although a good deal of research has

been conducted on how organizations operate in

Asset Management for Sustainability, Accountability and Performance 45

contravention or direct circumvention of these devices,

they still play an important role. If the leadership

wants to convey the importance of adopting asset

management in an organization, it should evaluate

whether these formal forms of information reflect the

new organizational commitment. If leadership wants

managers to adopt asset management, it should review

whether such direction is clear in the managers’

position descriptions, annual evaluations and in their

divisional work responsibilities.

Organizational Success Information - To embrace an

on-going change, the workforce must see and

experience that the change is actually occurring. To

continually communicate the evolving deployment of

the asset management direction, the leadership should

ensure that it is providing newsletters, websites, group

meetings and other forms of feedback. This feedback

needs to communicate continuously about the success

achieved and the stages about to be undertaken in the

organization’s deployment of asset management.

Organizational Competency

Information

If the organization possessed all the competencies

necessary to conduct asset management, it probably

would be doing so already. The fact that asset

management is not fully deployed indicates that a

competency gap exists. Assessing the size of this

institutional competency gap and then devising a plan

to close it is among the most important types of

information needed to deploy asset management. The

effort to assess the competency gap and then to close it,

is in effect, an Asset Management Implementation

Plan. The components of the Implementation Plan to

assess and then close the competency gap would

include at least the following elements.

The Strategic Basis for Asset Management - Asset

Management is like Performance Management in that

both are strategic processes intended to direct daily

activities so that they contribute to the achievement of

long-term institutional goals. The primary strategic

foundation for asset management tends to be strategic,

long-term organizational goals which include the

following elements:

• “Preservation first” is an organizational priority;

• “Worst first” treatment strategies are secondary

to life-cycle-cost treatment strategies;

• The organization values “fact-based decision

making;”

• The organization values “continuous

improvement” and “institutional knowledge

management” which means it constantly

evaluates its results, learns from them and

disseminates that learning throughout the

organization.

If a strategic foundation for Asset Management is

missing in an organization, the leadership should

consider developing a strategic plan or articulating a

strategic vision which clearly states its long-term goals

in support of asset management.

Short-Term Objectives and Performance Measures

- Most strategic processes evaluate their own success

by devising short-term objectives and performance

measures which are deployed as incremental steps

toward the long-term goals. The achieving of the

short-term performance measures ensures progress

toward the goals. Failure to achieve the short-term

performance measures triggers assessment or

“learning” as to what needs to change in order to

achieve the desired success.

If an agency lacks clear performance measures and a

process to track them it probably lacks a critical

element of Asset Management. Steady progress toward

implementing projects, maintenance treatments and

preventive maintenance operations are essential if the

organization is to attain its multi-year, long-term Asset

Management goals. Performance measures and a

process to track them generally are essential.

Scenario Forecasting - One of the primary questions

that asset management answers is, “Will the system be

better or worse in the future as a result of what we are

doing today?” To answer that question the planning

functions need to be able to extrapolate different

programmatic strategies and funding levels to

determine their costs and benefits. The agency will

need to evaluate different funding levels and treatment

strategies. These forecasts can be quite complex and

rely on state-of-the art computer systems in a mature

asset management organization or they can consist of

Asset Management for Sustainability, Accountability and Performance 46

straight-line extrapolations of spreadsheet and database

information. The sophistication of the forecasts tends

to increase with the maturity of the asset management

program. However, an essential piece of information

necessary will be to determine the competency of the

department’s scenario- forecasting capabilities.

Workforce Skills - People from the strategic planning

offices to the front-line maintenance forces may well

need new skills to implement asset management. If the

agency intends to increase its emphasis upon

preventive maintenance it must ensure that work teams,

inspectors, designers and material testers are familiar

with crack sealing, chip seals, thin overlays and other

pavement preventive treatments. If the department has

long relied primarily on reactive overlays, these

preventive-maintenance treatments may not be widely

understood.

Benefit-Cost Skills - A wider reliance upon

benefit/cost analyses at both the program level and

project level may require new institutional skills.

Tools to easily conduct benefit/cost analyses so that

they can be conducted on a wide array of program and

project options probably will need to be provided.

An Asset Management Champion - One of the most

important requirements is to have an asset management

champion at a high level of an organization. If asset

management is being driven by a Commission, a

Legislature or by the CEO, it probably has an

automatic champion. If those conditions do not exist, a

champion should be appointed and the higher in the

organization the better. This champion in many

instances is supported by a broad-ranging committee

representing all major departmental areas. This

arrangement can spread the advocacy widely across the

organization.

Organizational Asset Data

One of the common fallacies about asset management

is that its practice is dependent upon state-of-the-art

enterprise-wide computer systems. Such systems are

extremely desirable and they are powerful adjuncts to

mature asset management processes. However, as

mentioned in past sections they are optional while

other types of data are absolutely essential for asset

management. The following section generically

describes the type of basic asset data that an

organization will require. It should be stressed that the

acquisition of sufficient data and information for asset

management is a continuous journey, not a point of

departure for the asset management effort. “Begin with

what you have” is repeatedly stressed in asset

management guidance worldwide. Spread-sheets, data

bases and simple forecast curves are often the

foundations of asset management information systems.

Organizational Asset Data - The International

Infrastructure Management Manual identifies the

following categories of data that underlie sound Asset

Management.

Asset Inventories - These are the basic data regarding

the bridges, pavements, maintenance appurtenances,

traffic control devices, equipment and facilities which

comprise the total inventory of the department’s

physical assets. Generally, this information includes at

least current condition and location information.

Preferably, it would include past-performance history

and detailed structural condition data so that remaining

service life can be predicted. Although it may be

simplistic, just knowing what assets exist and where

they are can be important. Some assets such as

culverts, under drains, signs, traffic signals and

guardrail have been lacking in traditional asset

inventories, which focused upon pavements and

bridges.

They include:

Level of Service Data - Data as to the desired level of

service compared to the existing level of service is

clearly desirable in Asset Management information

systems. When unit cost data is added to the existing

and desired level of service information, financial gap

analyses can be conducted. In addition, ad hoc trend

analysis and exception reports can be conducted to

look for trends in asset deficiencies, whether they occur

geographically or programmatically.

Predicted Future Demand Data - This data is often

volume-based such as traffic forecasts. This data is

important for forecasting future demands, such as

loadings on pavements or bridges.

International Infrastructure Management Manual,

Version 3.0, 2006, pg. 2.10

Asset Management for Sustainability, Accountability and Performance 47

Remaining Useful Life Forecasts - If the preceding

data exists, it generally is possible to forecast the

Remaining Useful Life of assets. The remaining useful

life can predict failure scenarios and is fundamental to

accurate forecasts of financial needs.

Risk-Analysis Data - The risk-sensitivity of items

such as fracture-critical bridges or traffic control

devices is quite high. Rather then accept high-degrees

of risk regarding these asset classes, the desired asset

data would include indicators of risk for structures or

other asset items which need to be maintained with

higher degrees of adequacy than would items of lesser

risk such as low-volume rural pavements.

Treatment-Sensitivity Data - The relative effects of

various treatments upon the remaining service life of

assets is important and desirable data. These data

preferably are derived from statistical analysis of a vast

array of past examples but they can be generated by

engineering judgment or “rules of thumb” in early

Asset Management programs.

Benefit/Cost Data - Closely related to treatment-

sensitivity data are benefit/cost data which can be used

to generalize the return-on-investment of various

treatments or strategies.

Fiscal Forecasts - Forecasts of predicted revenue

based upon likely economic and political scenarios are

necessary to evaluate potential investment options.

The Sensitivity of Maintenance and Operations -

Tradeoffs in capital programs often are made in Asset

Management as decision makers evaluate tradeoffs

between asset classes such as pavements, bridges or

maintenance items. Another class of trade-off decision

is how to allocate maintenance and operations

resources toward the maintenance of assets. Decisions

on how to deploy people, equipment and materials

relies upon the expected sensitivity of those resources

when they are applied to the improvement of various

assets.

Analysis for Asset Management

According to the FHWA Office of Asset

Management the following analyses are the basic

ones which will be conducted upon the Asset

Management information systems mentioned above.

1. What is the state of my assets?

a. What do I own?

b. Where is it?

c. What condition is it in?

d. What is its remaining useful life?

e. What is its remaining economic

value?

2. What is my required level of service?

a. What is the demand for services by

stakeholders?

b. Are there regulatory requirements I

must meet?

c. What is my actual performance?

3. Which assets are critical to sustained

performance?

a. How does it fail? How can it fail?

b. What is the likelihood of failure?

c. What does it cost to repair?

d. What are the consequences of

failure?

4. What are my best “Operations and

Maintenance” and “Capital

Improvement” investment strategies?

a. What alternative management

options exist?

b. Which are the most feasible for my

organization?

5. What is my best long-term funding

strategy?

a. What revenue will I have?

b. What is my investment gap or

surplus to meet asset condition

goals?

c. What would be my optimum mix

of:

i. Preventive Maintenance

ii. Reactive Maintenance

iii. Rehabilitation

iv. Replacement

d. If I cannot afford my optimum mix,

what is the best mix of fixes I can

afford?

Asset Management for Sustainability, Accountability and Performance 48

Oregon Asset Management

Case Study

The following Oregon DOT case study illustrates how one

agency addressed the three types of organizational

information needs as it evolved its Asset Management

strategies. The Oregon DOT developed Organizational

Direction information which served to focus the agency staff

upon the path of Asset Management. It adopted both an

Asset Management program plan and an Asset Management

communication plan to fully convey its organizational

direction to the work force. It gathered its Organizational

Competency Information by assessing and then enhancing its

organizational structure to support its Asset Management

efforts. Finally, it also developed a strategic approach to

producing the Organizational Asset Data it needs to fully

capitalize on Asset Management for a wide range of assets.

Although the Oregon DOT did not approach its Asset

Management evolution primarily as a communication

exercise, the steps it did take serve to illustrate the three

types of information that an agency needs to consider as it

adopts Asset Management.

The Oregon DOT case study also illustrates how an agency

can use its Asset Management system to generate highway

performance information to satisfy statewide performance

measurement efforts.

Asset Management for Sustainability, Accountability and Performance 49

Summary of Asset Management Development in Oregon

The development of Asset Management is often an

evolutionary process within an agency and it was so at

the Oregon Department of Transportation (ODOT).

The roots of the ODOT Asset Management efforts can

be traced to department policies which began as early

as 1988 to set targets and to measure performance of

the department's highway infrastructure assets. The

agency set desired levels of service and began tracking

its performance toward achieving those levels.

Because the setting of performance targets is a

common activity in both Asset Management and

Performance Management, ODOT's early experience

in setting performance targets allowed it to adapt more

readily over the years to the practice of Asset

Management as that became the agency's preferred

approach to managing its highway infrastructure.

Concurrently, through the years, the agency improved

its systems for pavement management, bridge

management and safety management. It also used the

HERS-ST program to help determine optimum

investment levels between asset classes. Eventually,

the various performance measurement efforts

combined with the agency's embrace of management

systems led it to an Asset Management system that

now has formal structures, a formal mission and

formal policies.

As other agencies have found, the DOT's evolving

Asset Management system could produce the data

necessary to satisfy the state's desire for transportation

performance metrics as part of a statewide

Performance Management program. In a collaboration

of the transportation department's Asset Management

process and the state's performance measurement

process, the ODOT performance targets for its

transportation assets are tied directly to the state-level

performance measures. These measures are presented

annually to the state Legislature for review during the

budgeting process.

. The transportation measures are

tied strategically to four over-arching agency goals of:

(1) Improve Travel Safety in Oregon, (2) Move

People and Goods Efficiently, (3) Support Livability

http://www.oregon.gov/ODOT/CS/PERFORMANCE/

and Economic Prosperity, and (4) Provide Excellent

Customer Services. As a result, a direct linkage can

be drawn between the Oregon DOT's asset

management practices and the practices' contribution

to the achievement of statewide performance goals.

Oregon DOT officials said this long history of

strategically approaching the measuring and managing

of transportation asset conditions has given the agency

a firm sense of its organizational direction regarding

Asset Management. The agency continues to evolve

from setting infrastructure performance measures, to

developing management systems to embarking on full

implementation of an Asset Management program.

Representatives from a majority of ODOT program

areas are now involved in the decision making

process. At the same time, the Legislature and the

state executive branch can have confidence in the

outputs from the Asset Management program to

provide the information they seek to assure that trans-

portation performance is sound.

Achieving Organizational

Direction

As the Oregon DOT developed its Asset Management

processes, it became increasingly clear and emphatic

in communicating its asset management direction to

its workforce, to the Legislature and to the public at

large. The agency's formal evolution to embracing

Asset Management included the adoption in January,

2006, of the "ODOT Asset Management Strategic

Plan." That was followed by other systematic efforts

to communicate the organizational direction including

an Asset Management Program Plan, an Asset

Management Implementation Plan and an Asset

Management Communications Plan. All were

intended to clearly and systematically convey that the

organization was making a further, evolutionary shift

in refining and enhancing its Asset Management

practices.

The Strategic Plan says, "ODOT adopted the goals

and principles of the AASHTO Transportation Asset

Management Guide and is currently attempting to

Asset Management for Sustainability, Accountability and Performance 50

integrate the process of Asset Management into its

everyday business processes and decision-making at

all levels, and across all functions, of the organization.

Its Strategic Plan includes Figure 15 which illustrates

how Asset Management influences Preservation,

Operations and Capital Improvements through the

systematic use of data, reporting systems, decision

structures and resource-allocation decisions.

The ODOT Asset Management Strategic Plan

described the then-current state of Asset Management

in Oregon - including its weaknesses - and laid out a

concrete plan for how the agency would improve its

Asset Management practices. The Strategic Plan said

that the success of Oregon's Asset Management efforts

would depend on whether it developed a program that

met the business needs of the various core business

areas of the department including management,

planning, project development, operations and

maintenance. It intended to make Asset Management

the foundation to monitor the transportation system

and to steer the preservation, improvement and

replacement of its assets. It notes that the agency will

build upon its strong management systems.

"The significant difference (between Asset

Management and the other management systems) is

that, in many respects, existing ODOT management

systems are used in a "tactical" manner, to identify

specific projects. Asset Management is a "strategic"

analysis and decision-making approach that selects

projects and allocates funding by looking at a broad

range of assets and their performance in the system as

a whole," said the ODOT Asset Management Strategic

Plan.

The Strategic Plan goes on to spell out the Core

Principles to guide the organizational embrace of

Asset Management. Those principles include that:

• Asset Management will add value and

support the mission of the department;

• It will be done well and will be based upon

the national and international best practices;

• Asset Management will build upon ODOT's

existing good work of its management

systems;

• Current efforts under way to gather and

improve data will be supported;

• Asset Management will be part of the

department's daily work function;

• Asset Management will use trusted and

reliable data;

Figure 15 Asset management influences preservation, operations and capital improvements.

Asset Management for Sustainability, Accountability and Performance 51

• It will be a management process that is

regularly monitored with performance

measures of the effectiveness of cross-asset

decision-making, data monitoring, trade-off

analysis reporting structure and other key

elements;

• It will support broad-based funding allocation

decisions;

• It will allow readily available asset reports;

• It will foster cross-asset communication.

The Strategic Plan candidly said in 2006 that, at that

time, the agency's approach fell short of those

comprehensive objectives. It noted that its data was

contained in between 60 and 70 different data bases

which did not allow the comprehensive analysis that

the agency desired. To be strategically prepared for

Asset Management, the Strategic Plan said the agency

must implement processes to integrate capital and

linear asset data into an Asset Management system.

The system must then be strategically used to make

policy, program and funding- allocation decisions.

To achieve its strategic ends, the Plan set three goals,

each with several objectives and strategies. The goals

were:

• Develop and implement a robust Asset

Management Data Collection and Storage

system that is consistent, unduplicated,

understandable, reliable and accurate;

• Develop and implement a fully automated,

flexible and complete Asset Management

Data Reporting System that performs cross-

asset analysis;

• Develop and implement an integrated,

useable, and reliable Asset Management

system that provides information and analysis

for life-cycle cost management of ODOT

assets so that funding allocation decisions are

broad-based across various asset categories.

That plan says in part, "The Asset Management

Program Plan has been developed to provide

interested stakeholders a synopsis of Oregon

Department of Transportation efforts to implement a

strategic and pro-active Asset Management Program

for all linear transportation assets under its

responsibility."

The agency adopted a formal Vision for its Asset

Management efforts which is: "ODOT's assets are

managed strategically by utilizing integrated and

systematic data collection, storage, analysis and

reporting standards on a broad range of transportation

system assets, optimizing funding and life-cycle

decisions for operations, maintenance and

construction business functions."

Its Asset Management Mission is:"Recognizing that

Asset Management is a process or methodology that

ODOT can use to cost-effectively deliver an efficient,

effective, reliable and safe transportation service, the

mission of ODOT Asset Management is:

• to put in place the plans, people, processes,

and products that enable ODOT to implement

accepted Asset Management practices in a

timely and cost-effective manner, and;

• to continually monitor and improve Asset

Management implementation over time.

We do this so that the benefits to ODOT in the areas

of accountability, communication, risk management

and financial efficiency can be realized."

ODOT's efforts to link "plans, people, process and

products" to advance its Asset Management practices

is reflected in the multi-disciplinary approach evident

in its Asset Management Program Plan, and as

illustrated in Figure 16, taken from the Strategic Plan.

The Program Plan notes that the Asset Management

efforts will build upon the Bridge Management

System, the Pavement Management System, the

Safety Management System but it also notes that its

efforts must extend more broadly to include the

organizational structure, the policies, the standards

and processes of the agency. To advance the Asset

Management Program, partnerships and collaboration

must be forged with cross-cutting units within the

department and across the districts. Areas as diverse

as data collection, data management, data

warehousing, planning, the project delivery system

and maintenance need to be communicating and

ODOT Asset Management Program Plan, March 19,

2008, accessed at

http://library.state.or.us/repository/2009/20090513161

3413/index.pdf

Asset Management for Sustainability, Accountability and Performance 52

working in concert to advance the agency's Asset

Management program, indicates its Asset

Management Program Plan. "...a pro-active Asset

Management Program is a key element in the strategic

life-cycle management of these assets. This program

must provide resources to the agency in the form of

applications, tools, standards, processes and guidelines

for decision making, data management and

communication," says the Program Plan.

It goes on to identify the responsibilities of key areas

within the department that need to collaborate and

work across divisions to propel the agency along its

Asset Management path:

• The Technical Services staff will operate the

asset management systems, develop design

standards and policies, collect data and

contribute to decision making about Asset

Management;

• The Transportation Development Division

will provide foundational data such as the

statewide transportation plan, and plans for

highways, freight, and specific corridors. It

also will provide advice to key decision

makers such as the Oregon Transportation

Commission about programmatic decisions;

• The Office of Maintenance and Operations

has Asset Management responsibilities for

updating design policies and standards and

for leading asset maintenance activities;

• The regions and districts have responsibility

for performing capital improvements,

performing maintenance and making

operational improvements to the

transportation system;

• The Information Systems staff collaborates

with the department to support Asset

Management;

• The Asset Management Integration Section

develops and implements the Asset

Management Program, develops Asset

Management policies and assesses the Asset

Management program's success by

monitoring its performance measures.

The close collaboration and unified organizational

direction that is essential for Asset Management is

evident in the Asset Management Program Plan's

enumeration of roles and responsibilities. Each of six

different functional areas are assigned roles and

responsibilities in the common areas of Program

Assets Managed

Strategically

Operations

Mobility

Management

Planning

Construction

Maintenance

Facilities, IT

Fleet, Transit

Rail

Financial

Figure 16 The Oregon DOT links "plans, people, processes and products in its asset management framework.

Asset Management for Sustainability, Accountability and Performance 53

Coordination, Data Collection, Data Management,

Data Analysis and Report and Decision Making. In

other words, the various divisions and units all play a

key role in the cross-cutting functions of coordination,

data collection, data management, data analysis and

decision making in the Oregon Asset Management

framework.

Change Management and the

Asset Management

Communication Plan

Obtaining organizational buy-in is one of the primary

concerns during asset management implementation,

particularly at early stages. Without commitment up

and down the organization, asset management remains

only a set of principles written down on paper, no

matter how elegantly phrased. To undertake this

important component of implementation, the Asset

Management Integration Section of ODOT developed

an Asset Management Communication Plan. The

primary goal of this plan was to increase

understanding of the ODOT Asset Management

approach. It includes a Change Management Plan,

encompassing both communication and

education/training plans.

The Change Management Plan aimed to set and

communicate clear goals for Asset Management

implementation, assess and respond to agency culture,

and set up a framework that allows employees to

understand how they fit into agency-wide efforts. One

key message emphasized by the integration team is

that asset management has been embraced by senior

management. Demonstrating that the agency’s leaders

are active supporters of asset management is an

important step in aligning the organization. Executive

involvement in policy guidance and asset management

committees further contributes to this aim.

In addition to the Communication Plan, the

organization created an Asset Management Steering

Committee to create a good internal governance

structure. The Steering Committee is composed of

staff from Highway, Information Systems, Motor

Carrier, and other divisions. Integration between the

Highway Division and the Transportation

Development Division is extensive.

Organizational Competency

Information

As seen in the preceding section, the Oregon DOT

went to considerable lengths to ensure there was clear

information regarding its organizational direction for

Asset Management. As was also clear, the agency had

a firm understanding of its Organizational

Competency gaps regarding Asset Management.

Those primary gaps regarded data availability, flexible

data reporting and the ability to make life-cycle cost

decisions at the project and program levels. In the

ODOT Asset Management Implementation Plan, it set

about to close those competency gaps and to provide

the asset information it needed to achieve its Asset

Management aspirations. Because its competency

gaps related to data and information, there was a close

connection between the final two types of information

needs - the Organizational Competency Information

Needs and the Organizational Asset Data Needs.

Implementation Plan to Close

the Competency Gap

The Oregon DOT Implementation Plan lays out a

clear approach to providing the information and

analytic tools the agency desires for its Asset

Management maturation. The implementation plan

provides the agency specific steps to take for the

successful integration of Asset Management

principles, practices and processes into its every day

work. It says that woven throughout ODOT's Asset

Management program is the need for business

processes, communication channels and system

enhancements to support the integration of Asset

Management. It appears from the ODOT Asset

Management implementation plan that the agency

believes it possesses many strengths in the

management of individual assets but that it perceived

a gap in the "connectedness" of its plans, people,

processes and products to make the cross-asset

tradeoffs that it desired. "Well defined roles and

responsibilities, interrelationships within ODOT and

external stakeholders and the ability to maintain a

"learning" attitude are all vital attributes for a

successfully institutionalized ODOT Asset

Management system," says its Implementation Plan.

Asset Management for Sustainability, Accountability and Performance 54

Its Strategic Plan included three broad goals.

Goal 1 was to have a robust Asset Management Data

Collection and Storage System that contains

consistent, unduplicated, reliable and current data. To

achieve that, the agency identified the Objective of

making data adequate for both project-level and

strategic level decisions. It adopted the strategy of

formally identifying "Business Line System Owners"

for each management system or class of assets. Then

the roles and responsibilities of those owners and their

key stakeholders would be identified and documented.

Another strategy to support Goal 1 was to complete a

formal assessment of the data used to support each

management system or asset class. Then policies

would be developed to identify what should be

collected, how the data will be defined, how it will be

collected, how it will be stored, the degree of

precision it should meet and the practices used to

identify the location of its related asset. In other

words, the strategy would adopt a consistent process

to ensure the quality of the asset data collected. A

related strategy is to define a governance structure that

has oversight and authority to ensure adequacy of

data-collection efforts.

Goal 2 is to have an automated, flexible and complete

Asset Management Data Reporting System that

performs cross-asset analysis and which monitors the

inventory, condition and performance of the assets. To

move the agency toward that goal, it developed

strategies to assess existing management system

analysis software, to review key analytic inputs such

as construction price inflation rates, asset deterioration

rates and life-cycle models. Another strategy is to

develop tools and processes to incorporate Asset

Management principles into the ODOT planning and

project-development processes.

To achieve Goal 3, which is to create a decision

process that focuses on life-cycle management of

assets, the agency identified the steps it needed to

take. Among them were to implement Asset

Management principles into the resource-allocation

processes, to implement the Asset Management

Communication Plan, to develop an Asset

Management Training plan, and to implement

performance measures to support and identify the use

of life-cycle-based decisions.

Collectively, these steps and additional ones which

were not included here, were identified to close the

Organizational Competency Gap so the agency could

achieve its Asset Management aspirations.

Developing Organizational Asset

Data

Closely tied to the development of the organizational

competency information in Oregon was the effort to

provide the third type of information needed for Asset

Management, that is the Organizational Asset Data.

These data consist of the asset inventories, the

management systems, and the related decision-support

software, information technology networks and the

human resource capital to fully utilize them. As

mentioned earlier, ODOT had mature and robust

individual management systems for pavements,

bridges, and safety programs. However, ODOT

identified that it had gaps in how to integrate this data

for cross-asset decision making and trade-off analysis.

It also was concerned that it lacked consistency in the

quality of its data because of differing practices in the

collection and storage of them. The third component

of its information-building efforts related to Asset

Management was to build the information systems

necessary to support a mature, robust and reliable

Asset Management process.

Asset Management Steering

Committee

The enhancement of the Organizational Asset Data

was pursued in a systematic fashion by the Oregon

DOT. In its Asset Management Strategic Plan, it

identified the need to create an Asset Management

Executive Steering Committee and to have it

coordinate the efforts of other key existing and newly

created panels. These panels represented important

practitioners or led important data-development

efforts which were necessary to meet the demanding

data needs which the agency identified. These include:

Asset Management for Sustainability, Accountability and Performance 55

• Oregon Transportation System Steering

Committee;

• Information Technology Executive Steering

Committee;

• Community of Interest Committees (IT and

Transportation);

• Linear Asset Management Steering

Committee;

• A Technical Services Asset Management

Task Force; and,

• A GIS Steering Committee.

These panels coordinated the many steps necessary to

complete the ambitious data system tasks which had

been identified in the ODOT Asset Management

Strategic Plan. They worked from the comprehensive

set of objectives and strategies in the strategic plan.

One data strategy was to develop a corporate Data

Model and System Model that defines the agency's

data and its overall information system. The data

strategy efforts included obtaining the input from asset

system owners, asset class owners and key

stakeholders. Included with that effort was

development of a gap analysis of the current versus-

the-optimal ODOT data and system for managing the

data.

Another significant data initiative identified in the

Strategic Plan was to review the adequacy of data

necessary to conduct cross-asset analysis among major

asset classes. The effort involved reviewing data from

the current management systems to determine if they

could serve in the cross-asset analysis. Related to the

cross-asset analysis was an initiative to create a data-

improvement plan for each priority class of asset.

The development of an Asset Management Data

Reporting System that is easy to use, reliable and

accessible, and which provides current and accurate

condition and performance data, was another Strategic

Plan initiative which was pursued and overseen by the

implementation committees. Among the action items

for this task was to perform a cross-asset

demonstration project in preparation for the full

development.

The information strategies included attempting to

capture data generated during the planning process

and the project-development process and

incorporating them into the asset management data

bases. The agency identified the need to efficiently

capture and communicate data during the planning,

project development and construction phases.

Based on needs identified in an asset management

pilot project in one district, data management and

integration became the major focus of ODOT’s asset

management initiative. TransCOI, the Transportation

Community of Interest, has assumed the role of “Data

Council,” providing strategic direction. Products

produced by this committee include process guides

and standards for linear asset data collection and field

data collection. While the council began as

exclusively committed to asset management, it will

extend in the future to support other initiatives

including integrated Systems and Data Warehousing.

The Asset Management Integration Section was set up

under the Transportation Development Division to

coordinate and facilitate agency-wide asset

management efforts. It is working on developing

standards for gathering and storing data and

developing tools to help various business areas

manage their assets. The Asset Management

Integration Section serves as a conduit for

communication across the agency, in particular among

planning, design, construction, operations and

maintenance business lines.

Linear Referencing

A particularly successful data strategy for the

Oregon DOT has been the use of Linear Reference

Methods (LRMs) across the agency. LRM is a

technique used to identify a specific point along a

linear feature (e.g., mile point). Through linear

referencing, data from legacy management

systems can be coordinated by linking all data to

specific linear points on the highway network.

LRM combined with the use of Data Warehousing

breaks down the barriers between legacy systems

which could not be easily coordinated in the past.

Asset Management for Sustainability, Accountability and Performance 56

Decision Support: People and

Tools

Although the Oregon DOT has invested heavily in

improving its data systems, it also brings the

engineering judgment of its staff into the decision-

making process. For example, pave-ment leadership

in Oregon is careful to practice a mixed approach to

decision support. While systems such as the Pavement

Management System (PMS) are very useful for

forecasting, leadership emphasizes the importance of

not discounting expert knowledge from the field.

Pavement management in ODOT relies on both tools

and people.

The Statewide Pavement Committee has been in

operation for ten years and meets every two months.

Its membership spans the geographic regions as well

as a variety of roles related to pavement. While data

drives decisions made by the committee it also was

formed to capture the insight of the experienced

department personnel.

A Way of Doing Business

ODOT leadership measures the Asset Management

initiative’s success quite simply: up and down the

organization, everyone now understands that “worst

first” is not the answer. This one simple but important

concept is indicative of major progress toward

establishing a culture of Asset Management.

Since the development and approval of the Asset

Management Implementation Plan (April 2006),

ODOT asset management staff said the agency

recognized that in order to allow for successful

implementation it had to reach out for wider

involvement from all ODOT program areas. This

resulted in an adjustment to the participation of the

Asset Management Steering Committee. Part of the

outreach included an effort to integrate and share

previous asset data in an easily accessible format. This

includes a tool that was developed to help employees

by improving transportation data availability. The

FACS-STIP (Features, Attributes and Conditions

Survey – Statewide Transportation Improvement

Program) Tool offers both a map interface and a

tabular method for getting asset information. For more

information on the Oregon DOT Asset Management

program and its efforts please contact Laura Wipper

(

Laura.R.Wipper@odot.state.or.us) or Laura Hansen

(

[email protected]).

‘Words of Wisdom’ in

Developing an Asset

Management Process

Leaders at ODOT offer a number of observations that

may prove useful to other agencies at earlier stages in

the asset management development process:

• Not everything must be figured out at the

start. ODOT has been doing Asset

Management for years without calling it that.

The next step is to become more strategic.

• When ODOT first started performance

measurement, it was a separate effort. More

success resulted once performance

management and Asset Management were

viewed as intertwined.

• ODOT demonstrated the importance of good

tools and data for managing assets by first

implementing an Asset Management pilot

program in Region 2, District 3.

• You are never done - it’s a continuous

improvement process.

• Sophistication of Asset Management can be

based on the risk involved for different

assets.

• There necessarily will be different levels of

complexity for different assets. While it is

important to have a central person in

pavement because of the scale of the

endeavor, there is no need to have the same

model for all assets. For example, a $35,000

budget for guardrail requires less

sophistication.

Existing institutional culture (e.g. the organization’s

shared goals, understanding of responsibility and the

decision making process, personal relationships)

cannot be discounted when implementing Asset

Management as the new way of “doing business.”

Asset Management: A System for Improving Performance and Demonstrating Accountability 57

Chapter 5 Asset Management as A ‘Quality’

Framework

Congress and many states are considering a

Performance Management approach to their

transportation programs as a means to measure results

and to document accomplishments. Performance

Management is useful in many settings because it can

measure current results against agreed-upon targets.

However, Asset Management should not be

overlooked as a system for demonstrating

accountability and for producing results. In fact, Asset

Management has come to resemble many of the

world-renowned "quality" systems which leading

corporations use to ensure the long-term sustainability

of their performance. These systems produce not only

short-term performance metrics but they also measure

long-term performance, which is particularly relevant

for highway networks.

This section briefly summarizes these leading "quality

systems" and compares and contrasts them to Asset

Management. By adopting Asset Management, an

agency will be using strategies to manage the long-

term performance of its transportation assets in a

systematic and documented fashion similar to the

management strategies used by many of the corporate

world's leading performers.

Asset management has

matured and become a well-

defined framework to

measure and manage

highway assets. In its

maturation, it has come to

resemble other "quality"

systems such as Six Sigma or

ISO. These systems, like asset

management, help to not

only improve performance

but demonstrate

accountability.

Asset Management: A System for Improving Performance and Demonstrating Accountability 58

Development of "Quality

Systems"

"What gets measured, gets managed," is one of the

most common sayings in business. However, for more

than 20 years, management authors and leading

organizations have perceived that measuring only

short-term performance alone does not ensure the

quality of an operation, or the long-term sustainability

of results. In fact, the performance literature has

extensively documented that a focus only upon short-

term results can lead to unsustainable long-term

performance. In response, major organizations and

leading management authors have developed a variety

of additional management frameworks which not only

produce performance metrics but which also establish

an over-arching "quality" framework for the operation

of the organization. As a result, the use of these

formal, sophisticated and proven frameworks has

become a common component of organizations which

are seeking to demonstrate their long-term

performance and accountability.

Some of these systems include the Balanced

Scorecard, Six Sigma, the Baldrige Process, the

Japanese Kaizen process, ISO and the Total Quality

Management process which was common in the

1990s. A fully development Performance

Management System also can be considered as a form

of one of these "quality" systems if it includes

elements which lead to the long-term sustainability of

operations for the lowest life-cycle costs. However,

management literature is rich with examples of "sub-

optimization" or skewed organizational performance

because managers were pursuing narrow performance

targets which did not reflect the best long-term

performance of their organizations.

Such concerns are particularly relevant to the

management of highway assets. As every textbook

about pavements indicates, a systematic, long-term

perspective regarding preventive maintenance and

rehabilitation - in addition to resurfacing - is necessary

to sustain the health of an entire pavement network.

Focusing only upon the current performance of

pavements can lead to over-reliance on short-term

surface treatments. These eventually will fail to

provide the long-term structural integrity necessary to

guarantee the future performance of the pavement

network. An agency which focuses only on current

pavement surface conditions will eventually face a

highway network with an overwhelming backlog of

pavement rehabilitation and replacement needs.

Similar problems can develop with a transportation

agency's bridge inventory. It has been well

documented that the United States built a massive

inventory of bridges in the 1950s and 1960s with the

construction of the Interstate Highway System. After

serving the nation well for decades, these bridges are

creating massive future obligations for states because

so many are reaching critical age at the same time.

Without a systematic, long-term approach to

managing this massive inventory, states can face

"waves" of aging bridges which they currently cannot

afford to repair. A performance measurement system

which only focuses upon the current condition of

bridges may fail to recognize the long-term

performance issues that are looming.

Executives of leading corporations also found

themselves facing similar issues when they relied

upon only short-term performance measures. For

instance, a company could be profitable in the short-

term but face long-term insolvency if its major

products are likely to become obsolete with the advent

of new technology or new, competing products. Or

short-term profitability can mask the long-term

erosion of a company's market share.

To respond to these concerns, leading organizations

and institutions developed frameworks such as the

Balanced Score Card, or ISO, or Six Sigma. Theses

not only measure short-term results but they also

evaluate the organization's business practices against

clear, proven, demonstrably sound performance

frameworks. These frameworks measure how well the

organization responds to its customers, how it controls

its quality-assurance processes and how likely the

organization's processes are to ensure future success.

These systems address future success by include a

"learning" or "continuous improvement" function. The

systems are devised to respond to constantly changing

conditions in the marketplace, and to changing

customer requirements. Therefore, instead of

measuring only the adequacy of current performance

they evaluate attributes such as an organization's

Asset Management for Sustainability, Accountability and Performance 59

ability to "learn" or to "manage knowledge" or to

adapt to changing circumstances.

The ability to measure changing conditions, and to

forecast different future scenarios as a result, is a

particular hallmark of the Balanced Scorecard, the

Baldrige process or ISO. Again, in an analogy to

Asset Management, these functions would be similar

to a highway agency forecasting the effects of higher

material prices upon the long-term sustainability of

asset conditions. Unless the highway agency "learns"

from the rise in material prices it cannot adequately

forecast that its future ability to invest in pavement

treatments may not be sufficient to sustain pavement

conditions. Looking only at current conditions would

not provide insight into the effects of higher prices on

future results.

Leading manufacturers often require parts suppliers or

other business partners to be "ISO Certified" or to be

"Six Sigma Black belts" to demonstrate their

reliability as business partners. In addition to

delineating contract specifications, or performance

targets, these leading firms also require partners to

have a quality system such as ISO or Six Sigma to

underpin their continued performance as long-term

partners.

Similarly, as British and Australian transportation

officials developed long-term performance agreements

for private operators of new toll facilities they

required not only a set of performance targets to be

met but they required the vendors to institute a set of

long-term management frameworks including Asset

Management and ISO processes.

In Brisbane, Australia, the City of Brisbane and the

State of Queensland are each building massive tunnel

projects through public private partnerships. The City

of Brisbane has contracted for the $2.8 billion (US$)

Clem Jones Tunnel while the State of Queensland has

contracted for the $5 billion ($US) Airport Link

Tunnel. The Clem Jones Tunnel concessionaire will

build and then operate the tunnel for 35 years while

the Airport Link Tunnel concessionaire has a 45 year

contract. The two government agencies confront the

need to ensure that their massive investments are

adequately sustained for decades. The performance

and accountability strategy they selected is to require

up to 28 different management systems, including an

audited, peer-reviewed Asset Management System as

a key component of the contracts. The concessionaires

are required to operate sophisticated Asset

Management systems that at the end of four decades

assure that the highways are in sound condition when

turned over to the government.

The Australian transportation agencies have extensive

experience with managing Public Private Partnerships.

They have come to rely upon Asset Management

Systems as a primary contractual means for ensuring

the ongoing, long-term accountability of their

concessionaires' highway operations.

In Great Britain, the Highways Agency within the

national Department for Transportation recently award

a $10.2 billion 30-year contract for a private

concessionaire to widen and then operate the M25

beltway around London, the nation's busiest highway.

To ensure the long-term performance of that project,

the Highways Agency is not relying only on a set of

performance targets. As in Australia, it is requiring the

concessionaire to institute a series of "quality based"

management systems, including a system to

continuously sustain the condition of basic highway

assets over its 30 year life.

What these experiences abroad illustrate, is that Asset

Management has become a basic element of

accountability. It has been relied upon by the

experienced transportation agencies in Australia and

Great Britain to not only produce short-term metrics

but more importantly to institute a long-term,

continuously monitored process to ensure on-going

sustainability of the valuable asset.

Asset Management and Other

Quality Systems

The following section briefly summarizes several of

the most common "quality" systems and illustrates

how they are similar to Asset Management. By

briefly describing these systems it is possible to

illustrate that they, like Asset Management, can serve

as an important component of any accountability

framework. Also, these systems have addressed many

of the problems confronted within Asset Management.

How these systems address issues of performance,

account-ability and sustainability hold many important

Asset Management for Sustainability, Accountability and Performance 60

parallels for Asset Management.

These frameworks evolved to provide a

comprehensive, replicable systems approach to

managing large organizations, and the individual

processes within them. These models build upon the

"Deming" framework of institutional learning and

continuous improvement through:

• Planning to achieve clear objectives which can

be measured accurately;

• Implementing strategies to achieve those

objectives;

• Continuously evaluating the results, and;

• Acting to further refine and improve results

based on the evaluation of earlier efforts.

The models all rely heavily upon the setting of

performance measures, which are derived from larger

strategic goals. The performance measures are often-

customer focused, or focused upon indicators of

organizational performance or efficiency. The models

all stress data analysis to precisely compare processes

and results against desired norms.

Asset Management: A System for Improving Performance and Demonstrating Accountability 61

Asset Management as a Form of Performance Management

As mentioned above, Performance Management has

been increasingly proposed as a means or framework to

improve performance and accountability in

departments of transportation. The National Surface

Transportation Policy and Revenue Study Commission

strongly endorsed it, and AASHTO has developed a

prominent Standing Committee on Performance

Management.

Performance Management has been defined in many

similar ways but for the purpose of this report it will be

described as, “a formal, on-going process which

translates strategic goals into relevant and detailed

measures which are then tracked to ensure uniform

achievement of institutional goals.”

Performance Management provides an organizing

framework which includes at least 10 steps or

components. These steps provide direction,

organizational alignment, performance data and a

continuous improvement process. The steps are:

A strategic vision is established which sets long-term

goals for a decade or more. They are “stretch” goals

but ones which are measureable, realistic and focus on

core processes important to customers. These tend to

be goals such as meeting customer requirements for

providing smooth pavements, or sustaining a safe,

stable inventory of bridges.

Shorter-term targets are derived which are annual or

biannual components of the vision. These targets are

quantified with actionable performance measures. They

may include targets such as increasing the percentage

of routes which meet pavement smoothness goals from

80 percent to 85 percent by 2012, or decreasing bridge

structurally deficiencies to no more than 8 percent of

the bridge inventory.

The vision, measures, and expectations are clearly

communicated. This communication comes in the

form of speeches and newsletters but also in the form

of personal action plans, divisional action plans and

other meaningful and actionable agency documents.

Some states communicate these expectations in annual

Business Plans. The Missouri DOT uses its Tracker,

while Washington DOT uses its Grey Book. In New

Zealand, the Transport Agency produces a Statement

of Intent each year which details its targets. In New

South Wales Australia, the Road and Traffic Authority

produces a Results and Services Plan including its

annual asset condition performance targets. While in

the UK, the Department for Transport produces a

Public Service Agreement which provides details on its

performance goals, including those for asset

conditions.

Detailed requirements and specifications are

established. These break down annual goals into the

technical details necessary for specialized areas to

measure their progress. These detailed requirements

provide specificity to the front-line workforce as to

what the organization means when it states objectives

such as “good pavements,” “sound maintenance” or

“efficient practices.” These detailed specifications

provide the precise measures to define adequacy in

meeting the organization’s performance measures. The

Utah DOT’s Maintenance Management Quality

Assurance document provides details to maintenance

workers on the level of performance the department

expects for each maintenance item. The Queensland

Department of Transport and Main Road’s Pavement

Maintenance Report describes details on how to

measure, treat and evaluate pavements for the front-

line workforce. Missouri’s Tracker and its

Maintenance Performance Indicator Report provides

definitions and standards for various types of pavement

and shoulder distresses, as well as other asset

sufficiency standards. The specificity provided by these

supplemental documents provide an important link

between broad agency asset targets and the detailed

technical performance the agency requires of its assets.

Asset Management for Sustainability, Accountability and Performance 62

A quality-control process is established. This

process “field verifies” results by reviewing practices

in the field. The Quality Assurance/ Quality Control

process includes steps such as field reviews,

consultation with district staff to receive their feedback

on the process and the comparison of reported

conditions with observed conditions. The field visits

also allow the central personnel to observe district

practices and to identify best practices which can be

shared organization-wide. Sometimes these include

peer reviews between districts. These reviews ensure

that the management system reports being used by

central office personnel reflect the reality in the field.

Another benefit is that the “quality control/quality

assurance” process can identify best practices in the

field which can be elevated to standard practices

department-wide.

Meaningful incentives and disincentives are

provided for each involved manager to achieve their

assignments in the overall plan. Incentives can be as

simple as clear action plans for personnel, meaningful

evaluations of their achievements, or promotions and

praise. Disincentives can include disciplinary action,

additional oversight or eventual reduction of duties.

Some form of consequence for good and bad

performance is tied to the department’s goals.

A clear annual cycle is established as to when results

are expected, when results will be evaluated, when

communication will be updated.

Continuous, accurate performance data is collected

throughout the cycle. Personnel throughout the

organization need to be able to access information as to

whether their efforts are achieving the desired

outcomes throughout the course of the year.

A periodic annual review is scheduled. Although

data review occurs throughout the year, it typically

culminates in an annual summation of overall progress

and areas for improvement.

Finally, the active engagement of the leadership

Figure 17 The major steps within Performance Management provide clear targets and a clear process for

measuring accomplishment toward those targets. The later steps of reviewing results and updating strategies

achieve the institutional learning process common in all of the "quality" frameworks.

Asset Management for Sustainability, Accountability and Performance 63

throughout the process is essential. They set the

tone, establish the goals, praise the accomplishments

and address the failures. They also oversee the

“institutional learning” by re-calibrating the annual and

biennial goals based upon the feedback and

assessment.

Short-Term and Long-Term

Perspectives

There are significant nuances in the use of Performance

Management to address highway assets over the long-

term which should be fully understood. Care needs to

be taken as to which performance targets and strategies

to adopt to ensure the long-term sustainability of assets,

which is a fundamental objective of Asset

Management.

As long ago as 1993 in "Re-Inventing Government"

and as recently as October, 2009, in the Harvard

Business Review,

One of the common complaints about Performance

Management is that it can encourage short-term

thinking. Managers face pressure to achieve short-term

metrics and therefore have little incentive for long-term

investments or strategies. In Asset Management, the

agency's physical assets are managed for the highest

performance for the lowest overall cost over their

multi-decade lifecycle. In an Asset Management

framework, a manager would be encouraged to

consider accepting lower network pavement conditions

authors have cautioned that a focus

upon only short-term metrics can mask long-term

performance consequences. In the case of managing

highway assets, a focus upon only current conditions

can lead to a "worst-first" or reactive maintenance

approach which may not achieve the highest highway

system conditions for the lowest cost over a long time

frame, say of 20 years.

Osborne, David, and Ted Gaebler, "Reinventing

Government, How the Entrepreneurial Spirit is

Transforming the Public Sector," 1993, Penguin

Publishing, pps. 349-359.

Likierman, Andrew, "The Five Traps of Performance

Management," in the Harvard Business Review, Oct.

2009, pps 96-101

today by reducing the miles of "worst-first" resurfacing

if he or she instead adopted a more sophisticated

pavement management approach which included more

preventive maintenance, pavement rehabilitation or

pavement replacements that provide longer-term

benefits. The more sophisticated pavement strategy

may not achieve the highest system conditions in the

short term, but may well achieve the highest overall

system conditions over the long term.

The concern that Performance Management may create

a short-sighted or imbalanced approach to making

decisions in part led Kaplan and Norton in 1991 to

develop the Balanced Scorecard.

In a recent international transportation scan, "Linking

Transportation Performance and Accountability, "

The Balanced

Scorecard is a Performance Management System but it

includes many of the balanced tradeoff considerations

evident in Asset Management. In the Balanced

Scorecard, Kaplan and Norton grouped performance

metrics into a smaller, manageable number. They also

balanced them so that issues of both short-term

performance and long-term organizational

sustainability would have to be considered. In an Asset

Management example, a Balanced Scorecard for

pavements could include performance metrics which

evaluate short-term metrics such as customer

satisfaction, current ride quality, and skid resistance.

Those would be balanced against long-term metrics

such as remaining service life, and the lowest overall

lifecycle cost of treatments. In a Balanced Scorecard

approach, a manager could be making many of the

same long-term, lowest-lifecycle cost considerations

about pavements that he or she would make in an Asset

Management framework if the Balanced Scorecard

metrics include ones related to long-term sustainability

and lowest lifecycle costs. Additional discussion of

how the Balanced Scorecard performance management

approach can be used for highway assets is included

later in this chapter.

Kaplan, Robert S., and David P. Norton, "The

Balanced Scorecard - Measures That Drive

Performance," Harvard Business Review, as reprinted

in "Measuring Corporate Performance," Harvard

Business Review, 1998 pps. 123-145.

An as yet unpublished report to be produced by the

Asset Management for Sustainability, Accountability and Performance 64

was found among leading international practitioners of

Performance Management that a strong focus on Asset

Management operated in parallel. For instance, in the

Swedish Road Authority, the highway agency strongly

embraces Asset Management and adopts Asset

Management policies and strategies to consider the

lowest overall lifecycle strategies for managing its

highway assets. However, it also operates a parallel

Balanced Scorecard performance management system

to address important issues such as Greenhouse Gas

Emission reductions, gender equality, agency

operational efficiencies, on-time project delivery and

customer responsiveness.

In the New South Wales Road and Traffic Authority in

Sydney, Australia, the agency adopts a 10 year

Transportation Asset Management strategy which is

operated in parallel with the three year Performance

Management strategy called the Results and Services

Plan. The intention is to keep the shorter-term political

budgeting process appropriately apprised of long-term

highway asset management needs. The syncing of the

budget process and the Asset Management plan has

served to clearly illustrate long-term asset needs as part

of the short-term budgeting and performance cycle in

Sydney.

In Queensland, Australia, the Queensland Department

of Transport and Main Roads also operates a

sophisticated Asset Management framework in parallel

with a Performance Management framework. It adopts

a Performance Management approach through a three

year Service Delivery Statement which is similar to a

Strategic Plan or Business Plan which states which

performance targets it seeks to achieve in the short

term. It then provides quarterly reports, which inform

Federal Highway Administration, AASHTO and

NCHRP. Advanced copies were released in limited

quantities at the 2010 Transportation Research Board

Annual Meeting.

Interviews with SRA officials as part of the "Linking

Transportation Performance and Accountability Scan."

New South Wales Government Asset Management

Committee documents accessed at

http://www.gamc.nsw.gov.au/tam/ and interviews with

NSW RTA officials.

legislators, the ministry and the public as to how it is

performing. Included among these short-term metrics

are long-term Asset Management metrics, such as the

amount of preventive maintenance that occurs. Also,

employees are evaluated by their adherence to the

agency's well-defined Asset Management procedures,

manuals and quality assurance processes.

Part 13, Queensland Treasury, Department of

Transport and Main Roads, Summary of Departmental

Portfolio Budgets, 2008, in the Service Delivery

Statement and interviews with QDTMR officials.

Asset Management: A System for Improving Performance and Demonstrating Accountability 65

Asset Management And Similarities to the Baldrige Process

The Baldrige Process is one of the oldest and most

commonly used of the “quality” or “Performance

Management” frameworks. Establishing customer

requirements and then “managing by fact” to meet

those requirements is a pre-eminent attribute of

decision makers in the Baldrige organizations. The

Baldrige Process relies on seven major areas of

emphasis which are:

Leadership—Examines how senior executives guide

the organization and how the organization addresses its

responsibilities to the public. It also evaluates whether

the leadership practices good citizenship.

Strategic planning—Examines how the organization

sets strategic directions and how it determines key

action plans.

Customer and market focus—Examines how the

organization determines requirements and expectations

of customers and markets; builds relationships with

customers; and acquires, satisfies, and retains

customers.

Measurement, analysis, and knowledge

management—Examines the management, effective

use, analysis, and improvement of data and information

to support key organization processes and the

organization’s performance management system.

Workforce focus—Examines how the organization

enables its workforce to develop its full potential and

how the workforce is aligned with the organization’s

objectives.

Process management—Examines aspects of how key

production/delivery and support processes are

designed, managed, and improved.

Results—Examines the organization’s performance

and improvement in its key business areas of:

- customer satisfaction;

- financial and marketplace performance;

- human resources;

- supplier and partner performance;

- operational performance;

- and governance and social responsibility.

The Baldrige process provides a very detailed set of

questions which agencies answer to help them assess

themselves in terms of the seven categories. Agencies

can follow the process further by making a formal

application for a Baldrige review at either the state or

national level. Certified examiners will review the

application and meet with the agency to give it a

formal assessment. Agencies can matriculate through

an escalating series of increasingly complex

applications and levels of sophistication. The ultimate

level is to become a Malcolm Baldrige National

Quality Award Winner, of which there are

approximately six annually.

Table 4 below illustrates how the systematic self-

analysis of the Baldrige process could be used as the

basis for an agency's self-assessment of its own Asset

Management practices. The Baldrige evaluation

requires an agency to consider its operations from

important perspectives, such as whether it has

sufficiently ingrained essential training into its

workforce, and whether it keeps its information

systems robust and accurate. Although the Baldrige

process was not developed for managing infrastructure,

its categories hold many parallels to the functions

conducted in Asset Management.

Asset Management: A System for Improving Performance and Demonstrating Accountability 66

Table 4 Baldrige similarities to asset management.

Comparison of Asset Management and the Baldrige Process

Baldrige

Criteria

Baldrige Questions Asset Management Guide

Questions

Leadership

Are Vision, Values established?

Do leaders create environment for

improvement?

Do leaders communicate direction to

workforce?

Do leaders review and act on performance

measures?

Does the leader create

strategic goals and measures

for Asset Management?

Does leader establish Asset

Management “as the way to do

business?”

Is leader engaged in TAM?

Strategic

Planning

Does the agency plan strategically?

Are short-term and long-term goals set?

Are strategic tradeoffs made?

Is a long-term TAM strategy in

place?

Are short-term objectives tied

to long-term goals?

Are scenarios evaluated and

tradeoffs made?

Customer

Focus

How does the ‘Voice of the Customer’ influence

agency actions?

Can agency explain ‘best

value’ decisions for managing

assets?

Knowledge

Management

How does information align activities to goals?

Is performance data current, accurate?

Does knowledge drive improvement?

How does data support decision making?

Does the agency have a process to ‘learn?’

Is knowledge management in

place for asset data?

Is asset data current, reliable?

Does data drive analysis and

action?

Workforce

Focus

Is there a culture to create a high-performing

workforce?

How does agency foster cooperation between

units?

Does agency instill core competencies in staff?

Does the workforce have the

tools for successful TAM?

Do work units cooperate and

coordinate efforts?

Is staff trained in TAM?

Process

Management

How does agency ensure its core competencies

address strategic goals? Are processes

adjusted for changing environments and

events?

Do core processes create

success in TAM? Do

processes encompass life-

cycle approach to TAM?

Results Are organizational and customer goals met? Are system-condition goals

met, both short-term and long

term?

Asset Management: A System for Improving Performance and Demonstrating Accountability 67

The Balanced Scorecard Can Complement Asset Management

Another Performance Management or

“quality-based” framework which is

increasingly popular is the Balanced

Scorecard. It was first described by Kaplan

and Norton in the Harvard Business

Review in 1992. They wrote that after

decades of using performance measures to

improve profitability and internal

processes, executives realized such internal

measures were not capturing the full

complexity of the difficult tradeoff

decisions that organizations need to make.

How to balance the cost of a product with

the quality it provided the customer was

one such tradeoff. Or what value should a

company place upon exceeding minimum

environmental standards? How do they

measure their ability to innovate? What

value do they place on customer

satisfaction in exchange for reduced

profitability?

They created a four-point model which

creates performance measures in four

separate areas:

• The company’s financial perspective including

profitability;

• The company’s internal perspective including

measures of efficiency;

• The company’s measure of innovation and

continuous improvement;

• The customers’ perspective including satisfaction,

loyalty and corporate citizenship.

Simultaneously evaluating these competing and

dissimilar needs requires the organization to take a

holistic and balanced look at its performance, and not

focus upon a narrow set of measures which could cause

important functions to be devalued. In considering a

Balanced Scorecard for an entire transportation agency,

factors such as Customer Satisfaction, Environmental

Sustain-ability, Esthetic Enhancements and Safety

could be balanced with infrastructure condition. In a

narrower framework such as a Balanced Scorecard for

Pavements, the factors of ride quality, remaining

service life, lowest-cost lifecycle, and safety could all

be measured with the preferred mix of investments

being a rational balance between the competing values.

In reality, Asset Management officials are making

Balanced Scorecard decisions with pavements and

other assets. They are balancing competing values in an

attempt to reach the most rational overall set of

investment decisions. A Balanced Scorecard tem-plate

could be an effective means to illustrate the complex

tradeoffs they make.

Figure 18 The Balanced Scorecard allows tradeoffs between competing

needs, as does Asset Management.

Asset Management: A System for Improving Performance and Demonstrating Accountability 68

Six Sigma as a Subsystem Within Asset Management

Six Sigma began at Motorola in the 1980s. Engineers

determined they could dramatically reduce

manufacturing defects by carefully controlling

production processes. They aimed for a virtually error-

free manufacturing process that sought a 99.9997%

success rate in producing products which met

specifications.

Six Sigma is expressed in statistical terms and appeals

to persons with a statistical or engineering background.

Its concepts rely heavily, however, on the “continuous

improvement” and “institutional learning” practices of

the other systems. It trains a workforce in how to

statistically and methodically evaluate the cause of

defects and then to continuously improve production

processes until they are virtually eliminated. It

combines quantified analysis of results with a

"continuous improvement" approach.

It is widely accepted in manufacturing sectors and

would be highly appropriate for certain Asset

Management functions or subsystems particularly

conducting root-cause analysis of poor-performing

pavements.

In a Six Sigma pavement framework, highly detailed

analyses would be conducted on exceptional

performing pavements, both good and bad. The

analysis would seek to understand the root causes of

such performance and then to standardize the processes

which led to good pavement performance and to reduce

practices which result in poor performance. Analysis

of treatment timing, treatment appropriateness,

materials acceptance, construction techniques and

maintenance history would be conducted to determine

why the “product” failed to perform to specifications.

Figure 19 A Six Sigma approach to pavements would focus upon what causes pavements to perform

exceptionally well or poorly. Lessons from that analysis would be used to improve pavement processes.

Asset Management for Sustainability, Accountability and Performance 69

ISO, International Organization for Standardization

Founded in 1947, the International Organization for

Standardization (ISO) has produced more than 17,000

international standards, which include quality-control

and quality-assurance frameworks for managing

processes. These voluntary standards are developed by

more than 200 technical committees with membership

from more than 150 companies. “ISO Certified”

means that an organization has been evaluated and its

processes comply with these internationally recognized

processes for quality assurance.

Departments of Transportation in Illinois, Pennsylvania

and Florida all have adopted the ISO framework for a

variety of core business processes. The Florida and

Pennsylvania DOTs rely on the ISO process to ensure

their materials testing processes are sound. Illinois has

used ISO processes for project management and other

managerial functions.

Like these other systems, ISO provides a strategic,

managerial system which can be applied to processes

for managing almost anything, including processes

related to highway assets. Its principals include:

Customer Focus – The organization begins with an

understanding of its customers’ needs and it focuses all

subsequent activities toward meeting them.

Leadership – Organizational leaders create internal

processes that fully engage the workforce into meeting

the organization’s objectives.

Involvement of People - The organization actively

engages all levels of the organization with training and

commitment so they can contribute to organizational

success.

Process Approach – Internal processes are structured

in an optimized and proven fashion to achieve results.

Systems Approach to Management - Identifying,

understanding and managing interrelated processes as a

system contributes to the organization's effectiveness

and efficiency in achieving its objectives.

Continuous Improvement – Continuous improvement

of the organization’s performance is a permanent

objective.

Fact-Driven Decision Making – Basing decisions on

data and analysis is a key corporate attribute.

Mutually Beneficial Supplier Relationship –

Producers and suppliers rely on one another and should

have a relationship that increases value for both of

them.

As with Six Sigma, ISO processes provide another

means to document and to improve ongoing processes

which underlies Asset Management. Processes in

materials testing, design, maintenance or data

collection all could be enhanced by adoption of ISO

principles.

In a case study following this section, the use of the

ISO framework by the materials testing laboratory at

the Florida DOT illustrates the relevance of ISO to an

important Asset Management component.

Asset Management for Sustainability, Accountability and Performance 70

Summary

Asset Management provides executives with a

comprehensive, rational and explainable model for

managing their transportation facilities, their

organizations and the resources they invest. By

adopting Asset Management, they are also adopting

management practices which are very similar to those

which have been successfully deployed among the

nation’s leading corporations. The adoption of Asset

Manage-ment requires not the use of any particular

computer program, or table of organization or specific

set of performance measures. Instead, it requires a

systematic, ongoing way of doing business which

adopts a Plan-Implement-Evaluate-Act model which

has been demonstrated to be successful in a variety of

organizations around the world. Asset Management

compares favorably to many of the leading systems,

such as ISO or Baldrige, which are internationally

recognized for achieving customer requirements.

Examples of Asset Management Practices Complementing

“Quality” Systems in leading Transportation Agencies

Briefly, the report will cite key examples from leading

international transportation agencies which have been

documented to excel at both Asset Management and at

using performance measures to improve their

effectiveness. Transportation agencies in both Australia

and New Zealand have been the subject of international

scanning reports both for their Asset Management

practices and for their wider use of performance

measures to improve overall agency performance.

New Zealand

The New Zealand Transport Agency is the country’s

overall transportation agency which manages highways

and other transportation facilities. It has

comprehensive performance management and Asset

Management programs which include a strong

Pavement Management and pavement performance

emphasis. The department has consistently reported

achieving 98 percent of pavement condition goals for

ride quality, friction and rutting. These goals and the

pavement-management practices have clear

foundations in a national and departmental strategic

planning process which links pavement conditions

back to customer satisfaction. As with the Baldrige,

ISO or Six Sigma processes, the satisfaction of the

customer is deemed to be the ultimate performance

measure in New Zealand. Customers are regularly

surveyed about their satisfaction with ride quality. In

addition, technical measures such as friction which

may not be apparent to the driver are consistently

measured because the department realizes the obvious

contribution surface friction makes to safety.

New Zealand has a very “quality centric” Asset

Management and Performance Management process. It

not only reports on its outcomes in terms of the

percent of the system which meets pavement goals, but

it also reports how much it spent to achieve those

goals. Annual expenditures are forecast by category to

achieve the desired maintenance and pavement goals.

Then at the end of the year the expenditures are

reported with an explanation as to whether the

input/output goals were met. The agency reports that

73 percent of the surveyed public rate overall highway

conditions as “excellent” and that overall expenditures

were within a few percentage points of what was

forecast.

These pavement condition goals are also forecast into

the future with a commensurate expected expenditure

level to achieve those conditions. In this fashion,

Transit New Zealand reports on the “sustainability” of

its asset conditions with current available revenue.

Asset Management for Sustainability, Accountability and Performance 71

Swedish Road Authority

The Swedish Road Authority uses the Balanced

Scorecard and Asset Management as complementary

systems to sustain a high level of system conditions

despite the nation’s harsh climate and declining

maintenance budgets. For almost two decades, the SRA

has used the Balanced Scorecard approach to balance

competing national needs such as asset condition, with

highway capacity needs, with environmental

considerations. The two complementary systems

provide a transparent governance structure which has

served to provide accountability and to achieve results.

The Swedish Road Administration reports that as a

result of this focus upon asset conditions and Asset

Management it has sustained more than 95 percent of

its major roads with smooth ride surfaces and high skid

resistance for more than a decade. It has achieved

similar high levels of conditions for its bridge

inventory as well as for its maintenance conditions.

The Swedish approach relies upon seeking customer

requirements, setting clear goals to meet those

requirements, measuring accomplishments and

reporting results.

Approximately one-tenth of one percent of the nation’s

population is surveyed annually to determine its

satisfaction with pavement conditions and other

Swedish roadway attributes. The customer input as

well as the agency’s own continuous review of its

accomplishments has contributed to continued

improvement in nearly all major areas of highway

performance. Its pavement conditions are high, the

bridge inventory is sound, and its crash rates are among

the lowest in the world. So while the agency relies on

an Asset Management system it augments it with

additional input from its Balanced Scorecard, such as

the percentage of the public which is satisfied with

ride-quality conditions.

Queensland, Australia

Queensland is one of six states in Australia and its

Department of Transport and Main Roads has a long

history of performance management and strategic

planning. Its provincial planning and financial

reporting process includes several elements indicative

of a performance-based or “quality based” corporate

management system for pavements and other assets. It

publishes clear asset condition goals which are

incorporated into provincial strategic plans, budgets

and annual work plans. Its reporting process allows the

public, legislators and the media to track

accomplishments, and expenditures. In parallel with a

larger Performance Management System, it operates a

world-recognized Asset Management System which

focuses upon the long-term performance of the

highway system. The agency uses short-term

performance targets to achieve its three-year metrics

which are required for a government-wide performance

measure report. But it uses its Asset Management Plan

to ensure that the short-term decisions are conducted in

accordance with its long-term horizon for its Asset

Management Plan.

The department publishes a pavement management

guide which includes guidance for the full life-cycle of

a pavement from its design, construction, annual

evaluation, preventive maintenance, reactive

maintenance and rehabilitation. The pavement

management process also includes an annual reporting

of total network condition. Its manual notes that the

role of the annual report is to provide transparency to

outside stakeholders and to provide continuous

improvement opportunities to the transportation

department.

For instance, its annual report indicates that it intended

to have no more than 15.6 percent of mileage

exceeding its optimum seal-coat age but performance

was less than that with 16.2 percent past its optimum

age. By reporting on its preventive maintenance

targets, it is measuring the short-term performance of

tactics intended to ensure the long-term performance of

the entire highway network.

As in the other quality systems, Queensland also

reports measures on the overall customer satisfaction

with the highway network, including ride quality. Ride

quality met goal with 98% of urban pavements and

95% of rural ones meeting ride-quality standards.

As with the New Zealand model, the Queensland

pavement management approach represents a

comprehensive life-cycle approach to managing its

Asset Management for Sustainability, Accountability and Performance 72

pavement network, and connecting the pavement

system to a larger provincial Performance Management

System.

The overall strategic pavement management process

and its corollary reporting process serve to advise the

public and policy makers as to the overall long-term

prospects for pavement “sustainability.” The annual

reports provide analysis of how long-term system

conditions will decline if additional funds for pavement

rehabilitation and replacement are not provided. Its

annual report includes key measures such as:

• The percent of pavements which have exceeded

the optimal age for a preventive maintenance

treatment;

• The percent of the system which meets

smoothness standards;

• The proportion of overall travel which occurs upon

routes meeting smoothness standards;

• The number of lane kilometers of pavement

rehabilitated compared to rehabilitation goals;

• Number of lane kilometers resurfaced or resealed

compared to pavement management system goals;

• The level of investment actually expended

compared to the level necessary for long-term

sustainability of pavement conditions.

The Queensland metrics include targets which measure

the current ride quality while also measuring the

adequacy of long-term actions, such as whether the

rehabilitation program is achieving its targeted goals.

In this fashion it avoids the problem of focusing on

targets which may not result in the best long-term

performance. Its targets are taken directly from the

Pavement Management component of its long-term

Asset Management Plan.

New South Wales

The Roads and Traffic Authority in the state of New

South Wales is the department of transportation for that

Australian state. It, like in Queensland, incorporates its

long-term Asset Management, Pavement Management,

Bridge Management and Maintenance Management

practices into a larger, state performance management

framework. The RTA uses corporate strategic plans to

link results and services with broader government

priorities and to align internal business plans to deliver

results. The plans used to communicate the RTA’s

contribution to government priorities are the Corporate

Plan, an annual Results and Services Plan and a Total

Asset Management strategy.

The RTA files a formal Asset Management Strategy

with the federal transportation agency and with the

federal Treasurer annually.

The strategy is to submit a parallel Asset Management

plan along with its performance management plans.

The agency reports that the dual reporting keeps the

transportation agency and the state government focused

upon the longer-term horizon required for Asset

Management. If the agency practiced only performance

management, it would focus only upon asset conditions

in the short-term horizon of the government budget

cycles, which tend to look out no more than five years.

That horizon is not long enough to capture the full

lifecycle cost approach necessary under Asset

Management. In the Total Asset Management strategy

the agency reports upon its current activities which are

necessary to sustain asset conditions for a 20 year

horizon.

Its annual report indicates that for a five year period the

percent of roadway network which does not meet ride

quality standards has hovered at between only 4.4 and

4.6 percent of the network. The percent of the system

which has excessive cracking has been between 8.8

percent and 11.2 percent of the network. Cracking is

reported as metric because of cracking's importance to

long-term pavement performance. By reducing

cracking in the short term, it helps ensure the long-term

performance of the pavement network.

Asset Management for Sustainability, Accountability and Performance 73

Florida and Missouri DOT Case Studies

The following case studies illustrate two examples of how Asset Management can interact with these

other "quality" systems. The first case study examines how the Florida Department of Transportation

central materials laboratory became ISO certified. The second case study examines the Performance

Management process at the Missouri Department of Transportation. The Missouri DOT officials discuss

how they try to balance short-term performance targets with long-term asset sustainability. They caution

that care and discernment must be used in setting performance targets to avoid long-term performance

issues.

Asset Management for Sustainability, Accountability and Performance 74

Florida Department of Transportation Office of Materials

he testing and acceptance of materials is a

foundational aspect of ensuring performance of

highway assets. Many steps of the Asset

Management process rely on the assumption that

treatments will be applied with the proper materials

and construction techniques. A break-down in the

materials and testing process can lead to reduced

service life, decreased system conditions and higher

overall costs to sustain the network. If an asset

prematurely fails, the fore-casted service life which is

so important in Asset Management will be unreliable.

The Florida Department of Transportation’s Office of

Materials has embraced the ISO process as its preferred

system for ensuring consistent quality in its materials

testing and certification processes. With the ISO

process in place, the Office of Materials has a world-

respected template to follow which ensures the

continued high-level performance of its testing and

acceptance processes.

The specific ISO certification which the Office of

Materials has received is ISO/IEC 17025 General

Requirements for the Competence of Testing and

Calibration Laboratories. ISO/IEC 17025 specifies the

general requirements for the competence to carry out

tests and calibrations, including sampling. It covers

testing and calibration in laboratories which certify

products.

The Florida DOT Office of Materials believes it is the

only state materials office to receive the full

certification and is only one for four test facilities

nationally to have received it. Other levels of ISO

certification have been received by other testing

laboratories but those certifications only apply to

certain aspects of the laboratories’ quality-control

processes, not to their entire testing process.

The ISO audit and certification has two components,

one which evaluates the quality of the laboratory

testing process and a second which evaluates the

comprehensiveness of the operation’s business

processes. The ISO certification goes significantly

beyond the more common AASHTO Materials

Reference Laboratory (AMRL) certification, which the

Florida Office of Materials also has received. The ISO

certification evaluates all aspects of the operation

including processes for calibrating equipment,

documenting quality systems, training staff, preserving

records and conducting root-cause analysis of any

deficiencies.

The materials’ office interest in ISO certification began

in 2001 as a result of the team’s interest in improving

and in documenting its quality practices, said Thomas

O. Malerk, Director of the Office of Materials. The

effort requires a significant investment of time with

one full-time and two part-time positions dedicated to

the effort. Once they began to follow the ISO process,

they developed a series of internal manuals for the

office’s Quality System process. Mr. Malerk and his

team noted that the focus is upon the ISO applicant

developing its own quality-control processes and

manuals, and not following a prescribed or generic set

of ISO manuals. Once their manuals and processes

were established, they then trained all the staff in the

use of the processes and in regular internal auditing to

ensure the processes were followed.

A four-day ISO audit focused upon determining

whether the operation follows its own processes. The

staff members described the ISO audit as a “reality

check” as to whether their own comprehensive systems

were actually followed by the staff. They note that the

internally developed ISO-compliant processes are

integrated into the day-to-day practices of the front-line

staff, as well as into all levels of management.

They said it took two years of preparation for the first

ISO audit. They followed the ISO guideline

documents for the 17025 process and worked closely

with AMRL. They said the experience was very

unlike the AMRL accreditation. They said the

AASHTO accreditation focused upon watching to

ensure that test processes were run correctly. They

described the ISO process as, “Now that you’ve run the

test, how do you know it’s right?”

ISO is based on a systematic process of documenting a

process, and continuously monitoring results and

seeking the root-cause of any failure. This process

cascades throughout the major functions of an ISO-

compliant operation. The staff described the approach

Asset Management for Sustainability, Accountability and Performance 75

of analysis as, “what happened?, Why did it happen?

And what will we do to ensure it doesn’t happen

again.”

For instance, in the FDOT materials office each piece

of equipment needs to be regularly recalibrated, with a

log kept of each test and re-calibration. Once received,

new equipment is tested for proper calibration and

entered into the office’s on-going equipment testing,

calibration and documentation system. Recalibration

regularly occurs, is documented into the quality system

and is used to assure the office that all equipment is

functioning as expected.

For major testing procedures, the degree of uncertainty

or variance is measured by performing 25 tests upon a

given sample over five days. The degree of variance or

uncertainty is noted and either accepted or rejected as

being within statistical expectations. Then, throughout

the year the test is re-calibrated with the results logged

into the quality system. Periodically, the 25 tests on a

known sample are performed again, with the variance

being recorded. If the variance is significantly different

from the earlier tests, a root-cause analysis must be

performed to determine why the test performed

measurably different than before. With this sort of

systematic, on-going process improvement under way,

the office can operate with a high degree of assurance

that its equipment and sampling processes are

producing defensibly accurate results.

The materials officials said the first ISO audit

documented that they had a good operation, which they

always had known. However, it revealed to them that

they have failed to systematically document their

practices, ensure they learned from their continuous

improvement, and ensure that all employees and

stakeholders could find documentation that the

materials operation was performing up to its own high

standards. They learned, they said, that they had good

controls but little that described and documented those

controls.

The ISO findings led to process improvements

throughout the operation, including into areas that may

be considered routine, such as the filing system. The

filing system must have a quality-assurance process,

which includes proper training of all staff in its use. A

complaint-resolution process must be in place and

include documentation of how the staff is trained to

handle complaints, and documentation that complaints

were handled in the appropriate fashion.

The overall Quality System adopts an overarching

framework for the high-performing operation of the

work unit. Then, the system must include evaluation of

the workers’ knowledge of the Quality System and it

includes evaluation that they are following the Quality

System.

The materials office staff said the ISO process made

them much more aware of the need for systematic

training of their personnel. They noted that many of

their personnel are hired out of high school or the

military and do not have college degrees. The

employees had always received training but the

training has since become more serious and much

better documented. They said once they were required

to document their training process, they naturally

became more cognizant of its shortcomings. The ISO

certification process caused them to realize they needed

more complete training manuals, and a process to

refresh and re-certify employees’ training every three

years.

The emphasis upon training and re-certifying their

employees caused them to re-think the training

required of the consultants and contract testing

personnel. That re-focus led them to extend the re-

certification to their consultant and contractor testing

laboratories as well.

An overall emphasis on root-cause analysis of any

negative trend is now pronounced in their operations,

the staff reported. When they see a trend in customer

complaints, or declining test results, it will trigger an

analysis of the underlying cause, and potential

corrective action. They used to be more casual about

the proficiency samples necessary for the AMRL

certification. Now, when they submit test samples

which do not pass they are insistent upon analyzing the

cause of the failure and identifying what needs to

change in their processes to ensure the failure does not

occur again.

The focus upon the Central Office materials operation

then led to cascading improvements for the district and

regional testing operations as well. Although the

central office materials office in Gainesville is the only

Florida DOT materials laboratory which is ISO

Asset Management for Sustainability, Accountability and Performance 76

certified, the Quality System was extended to all of the

testing operations. The central office staff perform

quality audits of the district facilities which focus not

only on the testing and acceptance processes but on

other important areas such as purchasing, public

communication and customer satisfaction. A customer

satisfaction survey is run continuously through a web-

based survey and the results are used to improve

performance.

Asset Management for Sustainability, Accountability and Performance 77

Missouri DOT Performance Management Case Study

he Missouri Department of Transportation case

study represents an insightful illustration of the

contrasting yet complementary nature of Asset

Management and Performance Management. As

Congress and states consider adopting a Performance

Management framework, the experience in Missouri

illustrates important lessons which must be considered

to preserve the full benefits of Asset Management

while instilling Performance Management into the

national and state transportation programs.

The Missouri DOT (MoDOT) has strongly embraced

Performance Management, which is defined as "an

on-going process which translates strategic goals into

relevant and detailed measures

which are then tracked to ensure

uniform achievement of institutional

goals. Performance Management

Systems include an “institutional

learning” function in which the

agency analyses the root cause of

failure or success to achieve the

performance targets, and dissem-

inates the lessons of that analysis to

perpetuate continuous improve-

ment."

In Performance Management

Systems in Missouri and many other

organizations, a great emphasis is

placed upon achieving performance

targets. In MoDOT, the senior executives hold

themselves and their subordinates strictly accountable

for achieving the agency's performance targets,

including targets regarding the sustaining of highway

infrastructure conditions.

The MoDOT experience illustrates that Performance

Management can focus an agency, significantly

improve performance and improve current

infrastructure conditions. The percentage of major

Missouri highways that are rated in good condition

rose from 47 percent in 2004 to 83 percent at the end

of 2008, according to the Missouri DOT “Tracker”

report. This particular indicator considers both

smoothness and cracking as components of the

measure. Likewise, the percentage of signs that met

visibility goals rose from 70 percent on the major

routes to 92 percent, while the percentage of

acceptable pavement markings remained high, in

excess of 93 percent between 2005 and 2008. Other

MoDOT performance metrics drove substantial

reductions in crashes as seen in Figure 21,

improvement in on-time project completion, and

adherence to project budgets. In all, the MoDOT

"Tracker" records 115 performance metrics which

provide a comprehensive and continuous assessment

of the agency's performance. Included among those

measures are numerous ones which illustrate the

condition of the agency's bridges, pavements,

maintenance appurtenances, fleet, buildings and other

assets commonly addressed in Asset Management

frameworks.

MoDOT officials emphatically support Asset

Management and believe it is closely related to

Performance Management - a sentiment echoed in

nearly all of the case studies. MoDOT officials,

however, don't use the term "Asset Management," nor

do they have an Asset Management unit within the

department. They believe that by measuring key

elements of long-term sustainability of their highway

assets that they achieve the same ends as Asset

Management, only using different terminology.

200

400

600

800

1000

1200

1400

2005 2006 2007 2008 2009

Number of Missouri Fatalities

Figure 20 Missouri DOT has used its performance management system to

focus on key indicators, such as fatal crashes.

Asset Management for Sustainability, Accountability and Performance 78

Complementary Systems

The nuances between the two management

frameworks represent much more than just a parsing

of definitions or a debate over management system

taxonomy. A failure to understand the differences can

lead to missed opportunities to sustain asset conditions

over the long term. If the adoption of Performance

Management leads to an emphasis only on meeting

short-term highway system condition targets, a

significant benefit of Asset Management could be lost.

For instance, if performance metrics focus only on

short-term pavement ride quality, then the long-term,

lowest-lifecycle cost strategies inherent in Pavement

Management may not be recognized.

However, without a Performance Management

system, an agency may not have a systematic and

comprehensive management framework for other

transportation agency functions beyond sustaining

physical asset conditions. Functions such as on-time

transit service, the satisfaction of customers while

interacting with the transportation agency, the

promptness of project completion or the reduction in

workforce injuries are all critical transportation

agency functions that can be addressed by

Performance Management, but which do not fall

easily within the umbrella of Asset Management.

The addressing of both Performance Management and

Asset Management has been recognized as being so

entwined that AASHTO seeks a close relationship

between its new Standing Committee on Performance

Management and its long-established Subcommittee

on Asset Management. It has the chairman of the

Subcommittee on Asset Management serve as the vice

chair of the Standing Committee on Performance

Management so that the two important management

frameworks are considered in unison.

In a recent international transportation scan, "Linking

Transportation Performance and Accountability, "

An as yet unpublished report to be produced by the

Federal Highway Administration, AASHTO and

NCHRP. Advanced copies were released in limited

quantities at the 2010 Transportation Research Board

Annual Meeting.

was found among leading international practitioners of

Performance Management that a strong focus on Asset

Management operated in parallel. For instance, in the

Swedish Road Authority, the highway agency strongly

embraces Asset Management and adopts Asset

Management policies and strategies to consider the

lowest overall lifecycle strategies for managing its

highway assets. However, it also operates a parallel

Balanced Scorecard performance management system

to address important issues such as Greenhouse Gas

Emission reductions, gender equality, agency

operational efficiencies, on-time project delivery and

customer responsiveness.

In the New South Wales Road and Traffic Authority

in Sydney, Australia, the agency adopts a 10 year

Transportation Asset Management strategy which is

operated in parallel with the three year Performance

Management strategy called the Results and Services

Plan. The intention is to keep the shorter-term

political budgeting process appropriately apprised of

long-term highway asset management needs. The

syncing of the budget process and the Asset

Management plan has served to clearly illustrate long-

term asset needs as part of the short-term budgeting

and performance cycle in Sydney.

In Queensland, Australia, the Queensland Department

of Transport and Main Roads also operates a

sophisticated Asset Management framework in

parallel with a Performance Management framework.

It adopts a Performance Management approach

through a three year Service Delivery Statement

which is similar to a Strategic Plan or Business Plan

which states which performance targets it seeks to

achieve in the short term. It then provides quarterly

reports, similar to the MoDOT Tracker, which inform

legislators, the ministry and the public as to how it is

performing.

Interviews with SRA officials as part of the

"Linking Transportation Performance and

Accountability Scan."

New South Wales Government Asset Management

Committee documents accessed at

http://www.gamc.nsw.gov.au/tam/ and interviews

with NSW RTA officials.

Asset Management for Sustainability, Accountability and Performance 79

Included among these short-term metrics are long-

term Asset Management metrics, such as the amount

of preventive maintenance that occurs. Also,

employees are evaluated by their adherence to the

agency's well-defined Asset Management procedures,

manuals and quality assurance processes.

Missouri officials say that the key elements of Asset

Management are included in their Performance

Management system. Their decision process includes

elements of forecasting for the long-term, making

strategic tradeoffs in investing limited resources and

of using a mix of preventive, reactive, rehabilitative

and replacement treatments. However, two

unavoidable realities diminish their latitude in

investing more resources in long-term rehabilitative

treatments which could assure higher system

conditions in the future. First, MoDOT officials are

responding to strong public insistence that poor ride

quality be improved quickly. Secondly, a lack of

money limits their ability to afford more pavement

rehabilitation and replacement projects.

The Missouri officials acknowledge they have often

Part 13, Queensland Treasury, Department of

Transport and Main Roads, Summary of Departmental

Portfolio Budgets, 2008, in the Service Delivery

Statement and interviews with QDTMR officials.

pursued a "worst-first" strategy to achieve their short-

term pavement performance targets and that sustaining

their long-term conditions is problematic. However,

they point out that they address long-term

sustainability by placing performance targets upon

important long-term metrics such as the adequacy of

their preventive maintenance program and whether

their multi-year forecasts of future pavement

conditions indicate that they will sustain their

pavement targets into the future with their current

pavement programs. They also provide mechanisms

for their program managers to seek the highest overall

rate of return by making informed investment

tradeoffs between asset classes and treatment

strategies based on which investments provide them

the highest rate of return while also meeting

performance goals. The Missouri officials agree that a

simplistic focus upon only short-term pavement or

bridge conditions may lead a department to adopt only

resurfacing strategies and under-invest in long-term

preventive maintenance, pavement rehabilitation or

pavement replacement treatments. They note that any

agency seeking to emulate their performance

management approach needs to consider not only

adopting performance targets for short-term system

conditions but also must adopt targets which ensure

that the long-term, lowest-cost strategies are

considered.

100

2004 2005 2006 2007 2008

Percent

Percent Major Highways in Good Condition

Georgia Missouri

Figure 21 MoDOT has made substantial progress on pavement conditions on major routes.

Asset Management for Sustainability, Accountability and Performance 80

MoDOT's Story - Changing a

Culture to Embrace

Accountability

It is apparent that Missouri's adoption of Performance

Management has significantly improved performance

in the department and improved the current condition

of highway assets. Its experience is recounted here

because it represents a pronounced example not only

of Performance Management but also of a leadership

team which transformed agency functions by using

many of the Change Management, Organizational

Communication and Organizational Theory strategies

cited throughout this report.

Missouri DOT Director Pete Rahn is an ardent

advocate of performance management, serving as

chair of the AASHTO Standing Committee on

Performance Management. He said Asset

Management and Performance Management are

closely linked and he believes it would be difficult for

an agency to embrace Asset Management without

incorporating some aspects of Performance

Management such as the setting of targets and the

analysis of results such as the pavement condition

results in Figure 21 above. Performance Management

emphasizes the type of data analysis, focus upon

outcomes and continuous improvement that are

essential to Asset Management, he said.

Director Rahn said several years ago when he went to

his first Asset Management presentation it struck him

that Asset Management complements the Performance

Management framework that he instituted, both

formerly at the New Mexico DOT and later at the

Missouri DOT. The same logic of goal setting and

continuous improvement which Asset Management

applies to roadway assets was also applied to all DOT

functions under Performance Management. He said

once he understood what was meant by Asset

Management, he knew his department's Performance

Management process would naturally lead it to adopt

many sound Asset Management practices.

The Missouri DOT Performance Management system

sets clear goals for the condition of the highway

system. Standards are set for the condition of

pavements, bridges, roadside features, and traffic and

signage components. MoDOT officials try to ensure

long-term highway network sustainability by not only

meeting current condition standards, but by reviewing

how today’s treatments will affect network conditions

in the future. By focusing upon keeping both current

and forecasted highway network conditions meeting

target, the long-term sustainability of asset conditions

becomes an inherent part of the department’s

Performance Management culture.

Added to the focus upon sustaining satisfactory

conditions over an extended planning horizon is the

need to innovate. Districts are given finite budgets,

which incentivize them to find cost savings and

innovations. As a result, the districts themselves

benefit when they find low-cost treatments, when they

use preventive maintenance or when they innovate

with new technologies such as cold mix resurfacing.

The Missouri DOT officials say the combination of

focusing upon assets’ current conditions, forecasting

their future conditions, and maximizing resources,

naturally leads the staff to an "optimization" approach.

The staff is attempting to invest limited resources into

the programs, and mix of treatments, that will give

them the highest return over time.

Many advocates for Asset Management have

struggled to achieve institutional “buy in” for the

Asset Management approach. They have noted that

organizations and cultures are slow to change. The

Missouri officials said that getting acceptance of

Performance Management was helped when the

leadership of the organization insisted upon a

Performance Management approach that extends to all

aspects of its operations. Director Rahn said he

learned from his initial experience in New Mexico that

a top-down approach will achieve results but it will

take longer to convince the middle management to

embrace a new direction, such as Performance

Management. When he became the Missouri director,

he intentionally engaged the middle managers in order

to gain their strong commitment to and acceptance of

a management system approach.

Tracking Performance

The heart of the Missouri DOT Performance

Management system is accountability. The agency’s

Tracker is prominently displayed on its website, it is

Asset Management for Sustainability, Accountability and Performance 81

widely used internally to ensure accountability, it

explains the department’s priorities and it is the focus

of quarterly management meetings in which all

managers are held accountable to explain their

performance. The Tracker has 111 core measures,

with four additional ones recently added to track

expenditure of funds from the American Recovery and

Reinvestment Act. (ARRA) It reports 19 categories of

measures, including areas such as traffic flow,

pavement and bridge condition, safety, roadway

visibility, customer response, adopting innovations,

project delivery, access to modal choice, value for

money and attractive roadsides.

Performance Management has “teeth” in Missouri

because the degree of accountability is so high, say

members of the Missouri DOT staff. One agency

veteran said the high degree of accountability has

inculcated the management team with the

understanding that asset condition goals are very

important. Another official in the department said that

since Director Rahn instituted Performance

Management, no MoDOT district has had a decrease

in highway asset conditions. If asset condition goals

are not met, district officials are called in to explain

their performance, “and that is a very serious thing.”

Director Rahn said the emphasis on accountability has

led to the demotion and removal of officials who did

not achieve the performance goals. He said it is not

enough for senior leaders to espouse good

management but then to take no action when system

condition goals are not met. Performance

Management embodies the Plan, Act and Implement

steps of basic quality management, he said. If the

leadership does not act upon analysis which shows

that targets are not met, then it weakens the Plan, Act

and Implement process, he said.

The quarterly tracker meetings are high-profile,

widely attended meetings in which managers know

they will have to stand in front of their boss and their

peers to explain their performance. The Tracker

reports composite, statewide measures. However,

other tracking reports disaggregate the performance

data down to the front line operations of the

department. Director Rahn and other officials said as

they travel the state they find widespread awareness of

the Tracker, and upon the Performance Management

System of the department. Concurrently, that creates a

complementary awareness of the need to achieve all of

its targets, including the long-term performance of the

department’s highway assets.

The Missouri DOT does not use the term “Asset

Management” frequently with its staff, front-line

workers or the public. However, it constantly

reinforces the need for the department to achieve

highway condition goals and to adopt sound

infrastructure management practices. The

department’s management approach requires its staff

to analyze system performance data, to forecast

conditions, to evaluate tradeoffs, to achieve short-term

system condition goals, to prepare plans to achieve

long-term system conditions and then to act upon

these plans by executing the projects which they

include. The performance goals for Preventive

Maintenance are an example of how Asset

Management practices are ingrained in the

Performance Management system, said Director Rahn.

The delivery of preventive maintenance projects does

little to achieve short-term improvement in the

department’s pavement-condition metrics. Because

preventive maintenance treatments are applied to

relatively good pavements, the miles of pavements

which meet current ride-quality targets do not change

significantly with preventive maintenance treatments.

But the department realizes that preventive

maintenance is essential for long-term system

performance, so it requires the districts to meet

Preventive Maintenance targets.

The department’s approach is to communicate sound

infrastructure practices into practical, everyday

language. Its leadership talks about “keeping good

roads good” or “keeping good bridges good.”

“We had to think that we do more than just patch

potholes….Once we got the (highway) system turned

around, our problem is you can’t keep a good road

good with a shovel and a dump truck full of cold mix.

You have to change your process, your mindset,” said

Director Rahn. “It became pretty clear that if we are

going to preserve the value of our of long-term

investment in bridge maintenance, we have to make

(preventive maintenance) investments today. To

make an investment that we won’t see the benefit of

for 40 years, is the right thing to do.”

Asset Management for Sustainability, Accountability and Performance 82

He cautioned other directors to not be deterred by a

lack of complete data to support their Performance

Management transition. When it comes to data, data

improves through its use, he said. The best way to

improve bad data is to start using it, and then the users

naturally want to improve its quality. “It’s the old

Nike saying, ‘Just do it.’" He said officials also should

not be deterred because they fear they cannot identify

the perfect metrics. “Beyond the common sense ones,

the measures will either mature or be discarded and

others will replace them. It should be a process to

provide you with your needs for today.”

Once the CEO takes the lead on the Performance

Management process, a natural progression begins in

which the performance measures are refined, the data

for them improves, performance goals are met, and the

department team evaluates how they can re-calibrate

the measures and targets for even better performance

in the next cycle, he said.

One of the long-time department veterans said he had

seen several unsuccessful attempts during his career at

the Missouri DOT to install performance management

practices. “The difference is now we meet quarterly in

our tracking meeting. And now our Director, Pete

Rahn, uses those for accountability. If someone is

lagging behind he wants to know what you intend to

do to fix it. …It has had a profound effect on our

operation that permeates down to the local

(maintenance) sheds. "

Keeping It Simple

The most important improvements come as a result of

common-sense, obvious goals, Director Rahn said. In

Missouri, as in most states, 80 percent of the vehicle

miles of travel occur on the higher functional classes

of roads. In Missouri, that equates to 5500 miles of

what they have categorized as Major highways. On

those roads, the department focused upon basic

performance such as pavement conditions, roadside

conditions, signage and pavement markings, bridge

conditions, and the numbers of crashes. By

addressing those core conditions on the major

functional classes, overall system performance for the

typical roadway user has improved demonstrably.

Missouri also has experienced significant safety

benefits, including a 25 percent reduction in lane

departure crashes between 2005-2007. During that

period it installed safety items such as rumble strips

and cable median barrier, but it also improved sign

and pavement marking reflectivity, improved shoulder

conditions and improved pavement friction, which are

believed to have contributed positively to the crash

reductions.

Although the Missouri DOT relies heavily on fact-

based decision making, it has not invested heavily in

complex, expensive or sophisticated computerized

management systems. It has relied upon its roadway

asset inventories, its legacy pavement management

system and its bridge inventory. It has not depended

upon complex network optimization programs such as

HERS-ST. Instead, it leaves investment optimization

decisions up to its district decision makers who use

data, forecasts and their own judgment to achieve the

highest rate of return with their investment decisions.

By arming those decision makers with clear short-

term and long-term asset condition goals, by giving

them flexibility in making tradeoffs, but holding them

accountable for results, those officials have been

compelled to make optimum use of their resources,

say Missouri DOT officials.

The Missouri management structure relies on people

called “Result Drivers” and “Measurement Drivers.”

The Result Drivers are ultimately accountable for

achieving the department’s targets. Those targets and

Result Drivers are scaled throughout the department,

with one ultimate Result Driver for a category of

measures statewide, with corresponding district Result

Drivers responsible for the results within their

districts. The “Measurement Drivers” are responsible

for measuring, tracking and reporting the on-going

results.

Jay Bledsoe is a Missouri DOT Systems Analysis

Engineer, but also is the designated Measurement

Driver for the Smooth and Unrestricted Roads and

Bridge category of MoDOT measures and targets. He

and other MoDOT managers said the department’s

pavement management process is simpler than many

states', but it is highly focused on outcomes. While

they may conduct less analysis than some states, they

believe they are clearly focused on achieving

measurable outcomes in terms of pavement conditions

Asset Management for Sustainability, Accountability and Performance 83

and pavement performance.

They collect pavement data in two ARAN vehicles

and record IRI and cracking distresses. The data is

available to the districts both at the network and at 100

foot pavement section level. The data is given to the

districts, as are budgets. Budgets are based on asset

size, such as the number of lane miles and the size of a

district’s bridge inventory. Districts can chose on any

given year how to invest their funds between asset

classes. They also can retain any savings they achieve,

roll them into future years and re-invest them into

additional projects, or maintenance treatments.

Overriding all of the district decision making is the

need to achieve the department’s system-condition

goals.

The goal is to get 85 percent of the Major highways

into “good condition” and then to keep them at that

level indefinitely. As of the end of 2008, 83.4 percent

of Missouri’s Major highways met the Good target.

The department forecasts that by 2011, it will achieve

the 85 percent goal.

Despite its lack of a complex pavement management

system, the department forecasts its future system

conditions. It requires the districts to develop multi-

year programs of projects. These projects are then

entered into a pavement relational data base. The

system improvement contribution of the projects are

forecast, as is the degradation of all the pavement

sections which are not treated. The net change in

system condition then determines whether the

program of projects will achieve the desired pavement

condition targets. From that point, the Tracker

measures the districts as to whether they actually

deliver the projects which are essential to achieving

the system conditions. On an annual basis, the ARAN

vehicles re-inspect the highway pavements and

provides “field proofing” that the forecasted system

conditions are achieved each year. The result of the

overall pavement process is to replicate the Plan,

Implement, Evaluate process which is fundamental to

any quality-improvement cycle.

Resource Optimization

One of the objectives of Asset Management is to seek

the overall highest rate of return by making informed

investment tradeoffs between asset classes, and

between treatment types within asset classes. These

2004 2005 2006 2007 2008

Percent Minor Highways in Good Condition

Georgia Missouri

Figure 22 Limited resources compelled Missouri to make the difficult tradeoff of accepting lower conditions on the

minor highways in order to increase investment in the major ones. MoDOT benchmarks its conditions against

Georgia's.

Asset Management for Sustainability, Accountability and Performance 84

resource analyses - or optimization exercises - can be

conducted with sophisticated computer programs or

through more manual and informal decision-making

processes. At MoDOT, although computerized

optimization analysis does not occur, practical district-

level optimization decisions occur routinely, say the

Missouri officials. Districts which were well below

the 85 percent "good" pavement condition goals were

investing primarily in short-term treatments in order to

achieve their system condition targets. Once they had

reached their targets, they could devote more of their

budgets to preventive maintenance or to pavement

rehabilitation projects to maximize their long-term,

forecasted conditions. Districts which could sustain

their good conditions with lower-cost preventive

maintenance treatments could use any savings to

invest in bridges or other assets which were below

desired condition targets. The MoDOT process allows

managers to move money from one class of assets

which has reached its target condition to another

which hasn't to achieve the highest overall system

condition with the available resources. As seen in

Figure 22 above, they also have prioritized between

high and low-volume routes to put resources into

routes which serve the most people. They have made

the painful decision to accept lower conditions on

minor routes to sustain conditions on the major ones.

Therefore, after increasing conditions on minor routes

from approximately 62 percent "good" to 71 percent

"good" they intentionally transferred funds to major

routes, allowing the minor routes to decline in

condition.

Missouri officials are open about acknowledging that

their focus of recent years on short-term pavement

smoothness may not be the lowest-cost long-term

treatment regime. They have consciously deferred

more expensive long-term pavement rehabilitation and

replacement projects in lieu of resurfacings. Their

strategy was to demonstrate to the public that the

department recognized customer complaints that ride

quality was poor. The department strategy was to

demonstrate significant short-term improvements,

while concurrently opening a discussion of the state’s

need to invest more resources in pavement

replacement and rehabilitation. They believed that

without first demonstrating concern for the public,

demonstrating results and demonstrating the

department’s ability to improve the system that they

could not convince a skeptical public to increase

investment in transportation. The department

leadership is publicly discussing at many opportunities

the department’s need for resources to reconstruct the

critical but aging I-70 across Missouri, as well as to

rehabilitate other major routes.

The Role of Maintenance

The activities of maintenance forces are an important

component of the Missouri strategy to sustain asset

conditions. Because of the need to focus capital funds

disproportionately on the higher functional classes,

maintenance personnel are relied upon to make a

significant contribution to conditions on the local

routes under Missouri’s jurisdiction. In the State of

Missouri, the DOT has jurisdiction over local roads,

except those within municipalities. The 27,000 low-

volume miles of road in Missouri carry only 17

percent of the state’s traffic.

The pavement forces have been called upon to sustain

conditions on the low-volume local routes by using

full-depth pavement repairs, performing long patches

to improve deficiencies such as edge cracking and to

perform chip seals on structurally sound roads. The

active efforts of maintenance forces are considered to

be an important component of the state’s preservation

program.

MoDOT Director of System Management Don Hillis

is the Results Driver for several maintenance and

safety items, including numbers of crashes but also for

safety-related highway attributes, such as pavement

marking and sign reflectivity. He said the

Performance Management approach has

fundamentally changed the way MoDOT officials

think about the contribution of maintenance. In the

past, they may have measured the miles of chip

sealing or other outputs they performed. Now they are

measuring results and outcomes, such as whether they

have achieved their overall network pavement

condition targets.

Although much of the maintenance work is reactive,

well-trained maintenance forces who perform high-

quality work can be viewed as contributing to long-

term asset condition goals, the Missouri officials said.

Maintenance efforts such as the sustaining of adequate

Asset Management for Sustainability, Accountability and Performance 85

drainage, the application of high-performing chip

seals, and the proper placement of full-depth

pavement repairs all can improve the longevity of a

pavement. Culverts tend to be “out of sight, and out of

mind.” In Missouri, they instituted a “culvert storm”

in which crews statewide focused intensively on their

culverts to quickly improve their overall condition.

Crews removed obstructions, cleared vegetation, and

improved wing walls and toe walls. Those

maintenance activities will improve the drainage

performance of the culverts and may also improve

long-term pavement performance by reducing the

opportunity for standing water to saturate roadway

bases.

Proper training, combined with a renewed

understanding of the importance of maintenance to

long-term condition performance is important to

capitalizing on the contribution of maintenance forces

to sustain asset conditions over the long-term.

Mr. Hillis said the focus on long-term performance led

to a change in mindset among maintenance forces.

The old mindset was to perform maintenance as

quickly and cheaply as possible. The new mindset is

to invest more effort initially into a maintenance task

such as pavement repairs in order to get a better, long-

term performance from the activity.

Practical, understandable emphasis upon good Asset

Management tactics at the maintenance level is more

important than discussions of Asset Management

philosophies, Mr. Hillis agreed. Practical asset

management training at the maintenance level

involves training in sound applications of chip seals,

or full-depth pavement repairs or in performing sound

drainage maintenance. Those maintenance activities

are practical, understandable and meaningful to

maintenance crews, but they also contribute to sound

highway asset performance.

Increased Efficiencies as an

Investment Strategy

In all of the Missouri DOT interviews, the officials

indicated that finding increased efficiencies and cost

savings is considered to be a significant strategy for

improving and sustaining roadway conditions.

Savings and efficiencies allow for more treatments to

be performed, further improving conditions. The

tracking of costs encourages the application of new

innovations. Mr. Hillis said a renewed emphasis on

the cost accounting process among the maintenance

activities provides additional insight into how

maintenance crews can maximize limited resources.

He noted that one district re-engineered its mowing

process and was able to eliminate half of its mowers,

while still achieving its mowing targets. The district

personnel have started to systematically measure the

costs of their 10 most common maintenance activities

to provide a baseline for continuous improvement.

He said that achieving system condition targets alone

is not enough. Finding ways to achieve the targets

with increasingly greater efficiency is the ultimate

objective of MoDOT. To that end, the department is

increasing the focus upon its cost accounting system,

he indicated.

Lessons Learned from MoDOT

The MoDOT experience illustrates that Performance

Management can focus an agency, significantly

improve performance and improve current

infrastructure conditions.

The nuances between Asset Management and

Performance Management represent much more than

just a parsing of definitions or a debate over

management system taxonomy. A failure to

understand the differences can lead to missed

opportunities to sustain asset conditions over the long

term.

Missouri officials say that an agency needs to

consider not only adopting performance targets for

short-term system conditions but also must adopt

targets which ensure that the long-term, lowest-cost

strategies are considered.

The Missouri officials said that getting acceptance of

Performance Management was helped when the

leadership of the organization insisted upon a

Performance Management approach that extends to

all aspects of its operations.

Performance Management has “teeth” in Missouri

because the degree of accountability is so high.

Asset Management for Sustainability, Accountability and Performance 86

Finding increased efficiencies and cost savings is

considered to be a significant strategy for improving

and sustaining roadway conditions.

Don't be deterred by a lack of complete data to

support the transition to Performance Management.

When it comes to data, data improves through its use.

Asset Management for Sustainability, Accountability and Performance 87

Chapter 6 Summary and Conclusions

sset Management principles have long been

recognized as a means to sustain highway

conditions over time for the lowest lifecycle cost.

However, Asset Management also can be considered as

the primary process by which sound, long-term

performance metrics can be produced for a

transportation agency. In an era of accountability,

Asset Management practices can produce an

abundance of sound performance metrics which not

only satisfy short term reporting requirements but

which also ensure that the long-term performance of

highway assets are properly considered.

The increasing focus upon accountability in

transportation programs is based in large part upon a

growing need to demonstrate responsibility. Public

agencies are under increasing pressure from skeptical

taxpayers, legislators and the media to demonstrate

they are acting responsibly with public resources. The

achievement of performance targets is viewed as

evidence that the agency is responsibly using its

limited resources to achieve performance which serves

the public.

However, more than 20 years of study of performance

measurement has repeatedly illustrated that achieving

performance targets alone does not guarantee that an

organization is making the best long-term decisions.

Management frameworks such as the Balanced

Scorecard, Six Sigma, Baldrige, ISO and Total Quality

Management have arisen to provide a more holistic

framework for examining an organization's processes.

The adoption of these frameworks has been widely

accepted as a representation of the agency's

commitment to act responsibly toward its customers, to

maximize the resources of its stakeholders and to

ensure its long-term viability in a constantly changing

business environment.

Asset Management can provide for a transportation

agency the same framework of long-term viability and

continuous improvement that these other quality

frameworks provide for Fortune 500 companies and

leading public sector agencies. Asset Management

practices provide more assurance of accountability and

responsibility than does merely the achievement of

short-term targets. Achieving short-term targets alone

does not guarantee long-term sustainability. However,

when an agency selects its performance targets from

among the critically important components of Asset

Management processes, then the agency is far more

likely to be measuring performance which will ensure

In conclusion,

asset management

has been shown to

be an adaptable

system which has

assisted

transportation

agencies around

the world. Its use

provides agencies

with a proven

framework for

defensible decision

making.

Asset Management for Sustainability, Accountability and Performance 88

long-term sustainability of its highway networks.

The Australian states of Queensland, New South Wales

and Victoria have been the subject of several

international case studies of sound practices in both

measuring performance and in managing highway

assets. The transportation agencies in these states

widely use performance metrics to illustrate the

responsibility and accountability with which they

undertake their stewardship of the highway networks.

However, they select their performance metrics from

their Asset Management analyses to ensure that what

they measure will lead to the responsible management

of the highway network. For instance, they measure

activities such as their achievement of rational

preventive maintenance programs or their delivery of

well-planned pavement rehabilitation regimes. By

measuring preventive maintenance and pavement

rehabilitation programs they are measuring activities

which will sustain their highway systems over time, not

only in the short term.

In fact, these agencies could not have a responsible

performance measurement system if they did not first

have a responsible Asset Management system which

identified the strategies and treatments which will

sustain their networks into the future.

Another illustration of the use of Asset Management as

a system to ensure accountability and responsibility lies

in the contract provisions of the long-term, multi-

billion dollar Public Private Partnership projects which

are used in Great Britain and in Australia. These

contracts are intended to ensure the continued, reliable

sustaining of highway assets on these facilities for up

to 40 years. Their long experience with writing PPP

contracts has led the Australians and the British to

achieve long-term accountability not through a

proliferation of many performance targets but rather

through the adoption of long-term Asset Management

practices. Their contracts for the long-term

sustainability of these expensive PPP projects rely

upon adoption of audited, certified Asset Management

systems to ensure that the highway facilities will be in

sound and sustainable condition for decades to come.

Similar best practices in the selection of performance

metrics can be found in the domestic case studies of

transportation agencies which were documented in this

report. Agencies which adopt a long-term, Asset

Management process first appear to identify the

appropriate performance metrics which can lead to the

on-going, lowest life-cycle cost performance of their

highway network over time. Measuring activities

which ensure long-term highway network performance

are more likely to occur in an Asset Management

environment than outside of one.

This report also illustrated how in an era of increasing

accountability, highway agency officials can develop

the systems, the processes and the attitudes to

demonstrate the soundness of their short-term and their

long-term highway asset strategies. Institutional inertia

is one of the first issues that change agents face when

they attempt to institute improvements within a large

agency. Tactics borrowed from Organizational

Communication, Organizational Theory and Change

Management are manifested throughout the case

studies of successful agencies represented in this

report. By adopting these change-management tactics,

an agency leader can increase the chances of success

when deploying Asset Management principles into an

agency.

Asset Management can be the framework for satisfying

several mission-critical needs. First, it can provide an

organization a long-term rational framework for

making its infrastructure management decisions.

Second, it can be a template that dispersed and far-

flung agency staff can use to make repeated, and on-

going day-to-day decisions about how to responsibly

treat the assets under their jurisdiction. Third, Asset

Management can be a framework for programmatic

decision making which allows high-level executives to

make rational tradeoffs in investments between classes

of highway assets. Fourth - and perhaps of growing

importance - Asset Management practices can provide

highway executives with a defensible, long-term set of

metrics with which to demonstrate that their

organizations are accountable, responsible and seek to

be sustainable. An unavoidable lack of resources may

threaten the long-term sustainability of asset

conditions, but with an Asset Management process in

place the highway executive can demonstrate the

limited resources are being invested within a rational,

thoughtful and fact-based framework.

Asset Management for Sustainability, Accountability and Performance 89

Maryland State Highway Administration

The final case study is of the Maryland State Highway Administration. Its experience illustrates the

evolution of an Asset Management approach from earlier efforts to use the Baldrige and

performance management processes to improve its highway operations. The experience of the

Maryland SHA embodies many of the change-management and organizational-change examples

illustrated throughout this report. It also illustrates the on-going and evolutionary change that many

agencies experience when they transition to an asset management approach.

Asset Management for Sustainability, Accountability and Performance 90

Maryland State Highway Agency Case Study

ike other agencies moving their business practices

to asset management, the Maryland State Highway

Administration (SHA) has experienced a process of

symbiotic growth and development in performance

management and asset management. Its initial efforts

focused on establishing a performance management

culture and using the Baldridge framework for internal

performance measurement and business planning. The

integration of asset management arose from the

agency’s belief that asset management is part of the

larger performance management approach; in essence,

performance expectations define the level of effort

required to preserve the transportation assets. Because

the agency’s efforts began with the role of people, its

focus on information technology in support of Asset

Management has been more recent.

Leadership initiated the performance management

effort by identifying vital performance areas and

working with key individuals to establish goals for

each asset category. Defining these goals and

associated targets and measurements demonstrated

leadership’s intention to be accountable and to clearly

communicate expectations of the entire staff. The

agency intends for performance management and

objectives to be used at all levels of the organization to

ensure that a mechanism exists for concrete

performance measurement and feedback. Currently, the

top three levels of management have performance

management plans; these are used as the basis for

performance evaluation.

As performance management grew, SHA began

developing asset management practices that will allow

for effective trade-off decisions within and across asset

types. The pavement program, and to a lesser extent,

the bridge program have management systems in place.

However the agency has many organizational silos and

is still working toward integrating data across

organizational stovepipes.

Although performance and asset management are still

evolving at the Maryland SHA, the agency has already

realized an important benefit: Legislative trust in

SHA’s approach to decision making has resulted in

increased funding for system preservation.

Pavement Performance and the

Organization

Pavement management and its organizational

effectiveness have been the agency’s primary focus

areas because the level of investment in pavement is by

far the largest amount of money disbursed under SHA:

System preservation amounts to over half a billion

dollars annually. Pavement management began in the

mid 1980s with tracking of pavement performance.

Substantial progress has been made in this area since

then, including deterioration models that can produce

projections with some level of confidence. The tool

they have developed for determining return on

investment (ROI) is considered one of the more

advanced in the country, and is driven by where

pavement treatments produce the best ROI.

Pavement management is currently separate from

planning, project development, construction,

maintenance, and information technology; however,

some coordination is necessary for funding allocation.

Planning manages the funding allocation process and

sets the overall allocation for pavements, but district

pavement specialists decide how pavement funding

will be spent.

The maturity of the pavement management program in

SHA’s case demonstrates what works well for an

aspect of asset management and can also highlight

areas that need additional support. At SHA, this

process has resulted in a continuous improvement in

performance and asset management practices that the

agency believes will keep expanding its ability to

communicate funding needs and the impact of

insufficient funding on transportation assets to the

legislature and the public.

High-level transportation policy goals are presented in

the Maryland Transportation Plan (MTP.) Each mode

is then responsible for forming its own strategic plan to

support these polices. The SHA sets the targets for

statewide preservation and maintenance; these targets

are incorporated into the business plan. For example,

the target for pavement is at least 84 percent in

Asset Management for Sustainability, Accountability and Performance 91

acceptable condition, with acceptable defined as IRI

170 inches per mile or smoother (whether the road is

interstate or local roadway.) Cracking and rutting are

not yet taken into account. The target of 84 percent was

selected based on a public survey conducted in 2001-

2002, which indicated people were happy with the

level at that time. SHA is now above the target.

Based on the system preservation plan, each district

gets lane-mile and benefit targets and a budget from the

Central Office. Benefit targets are calculated based on

the fundamental principle that a long-term fix must

show more benefit than a short-term fix given current

condition, traffic factors, and the pavement

performance curve. The districts also receive suggested

projects that will help them attain targets. These

suggestions are generated by the Office of Materials

Technology (OMT), which owns the PMS. OMT is

currently acquiring data to substantiate the relationship

between cost and outcome to support its suggestions

and to offer options beyond overlays.

Allocations and Project Selection

One of the greatest challenges to achieving alignment

in pavement management practices has been

convincing district mangers to accept data from the

PMS rather than basing project selection on feedback

from local politicians. To help build consensus, SHA

adopted a strategy of combining staff experience and

insight with reliable tools. The process begins with the

SHA executives identifying strategic issues and

soliciting input from senior managers for suggestions

for solving problems. This approach encourages district

engineers to take a global view of the state’s

transportation system rather than focusing solely on the

needs of their district. Proposals from managers are

always accepted, but they may be refined. The districts

make the final determination of which projects go

forward, with the only caveat being that the districts

must meet the targets.

This approach gives Central Office responsibility for

optimizing the overall system while districts use those

guidelines to preserve the assets within their area.

Money is allocated by fund based on the targets set in

the business plan. Each fund has a fund manager who

presents their needs case during an annual allocations

meeting. Tradeoffs are considered in these meetings,

although in actual practice the allocations tend to be

driven by historical patterns and a “worst first”

approach. No formal tradeoff tools are used. Final

decisions are made by the Administrator, Deputy

Administrator, and Programming Manager and are

based on an assessment of risk, funding gaps, and

trends. The fund manager recommends allocations to

each district. As explained above, this budget is then

presented to the district, which makes decisions about

how money will be spent.

Preventive maintenance is planned work, coming

through the pavement management system

recommendations, whereas reactive maintenance, such

as crack sealing, is decided by districts. If reactive

maintenance gets too costly, some districts may elevate

the location to a project candidate, but there are no

objective criteria for this and no policies that integrate

this information into the formal decision making

process.

SHA has discovered that district performance has been

equalizing, so the allocations process appears to be

working. However they are still considering

improvements to their approach. For example, using a

VMT-weighted objective function would help funnel

additional funding to urban districts. An alternative

scenario involves setting separate targets by functional

class for pavement. This approach would incorporate

VMT.

SHA staff feels the project selection process for

pavement strikes the right balance between top-down

and district selection, which facilitates buy in

throughout the organization. Additionally they believe

the customization of their PMS by strong internal

people and consultants has contributed to the success

of the system.

Performance Measures and

Asset Management Results

Performance measures allow leadership to monitor

whether selected projects are leading to the desired

outcomes, thereby monitoring the effect of investment

choices on overall progress toward goals. At SHA, the

Chief Engineer monitors monthly expenditures and

meets every two months with districts to ensure

projects are on track to attain performance targets.

Asset Management for Sustainability, Accountability and Performance 92

Progress is communicated through quarterly status

reports that are released in association with the

business plan, and through the statewide Annual

Attainment report. A separate Annual System

Preservation report focuses on pavements and is broken

down by district. These reports provide tangible

indication of what is or isn’t working that can be used

to modify strategies, targets, allocations, and

performance measurement for future cycles.

The information also can be used to justify difficult

funding decisions and to build a case for increased

resources for the agency as a whole or for specific

assets. During the annual fund review, for example,

fund managers explain how funds are being used. The

administrators review accomplishments, projected

needs, and progress toward targets and goals and take

this information into consideration when making future

funding decisions. This process helps fund managers

understand how their financial decisions relate to the

business goals of the entire organization.

Information and Analysis

SHA has built its performance and asset management

programs around the concept that goals and

expectations must be clearly and visibly articulated.

They have made significant headway in this through

their agency-wide performance measures. Progress is

communicated through the annual Attainment Report.

For example, for the system preservation and

performance goals, SHA set as a measure the

percentage of the transportation network in overall

preferred maintenance condition with the idea that this

measure indicates how well management strategies and

tactics are working to sustain existing roadways. By

comparing this measure to prior years and reviewing

the differences in conditions between years, they can

determine what factors influenced changes in the

metric.

The 2009 Attainment Report shows a drop in the

percentage of the network in preferred condition

between 2007 and the two prior years. Agency officials

determined this drop resulted from, among other

reasons, maintenance activities that had to be deferred

due to budget cuts and increased costs and rising costs

of litter removal. To respond to these issues, they set as

future strategies a public awareness campaign

concerning litter problems and continued TAM efforts

to link the budget to expected levels of service.

Decision support: People and

Tools

To support decisions on which pavement sections need

improvement, SHA uses an automated roadway

analyzer, ARAN, to collect data on friction (skid

truck), cracking, roughness, and rutting. This

information is collected annually for roads at least one

mile long. Pavement designers, districts and the chief

engineer’s office see the data, which is fed into the

optimization system. This process generates the

suggestions that are passed along to districts with

targets and budgets. The process will also be used for

long-term performance assessment of pavement

performance and will eventually be used at the

strategic level. A pavement life cycle cost analysis is

performed for projects with at least $50 million of

pavement items to pick pavement type. This typically

amounts to between two and six projects per year.

While this system has been working well, it is not

without its issues. Recently the agency obtained a new

ARAN, which caused the numbers to improve for

reasons that had nothing to do with pavement

condition. The new data is within the statistical

variation of the prior level, but may have contributed to

the agency being above its target for pavement

condition. Additionally targets were changed two years

ago, causing some confusion because legislative budget

analysts usually compare year to year. A third factor

influencing pavement condition assessment has been

revenue from the stimulus funds, which is a situation

that cannot be duplicated. For sound decisions, data

collection, measures, conditions and models must all be

consistent. These variables impact SHA’s ability to

make meaningful decisions from its pavement data.

SHA’s PMS is primarily owned by the Pavement and

Geotechnical Division, which is located within the

Office of Materials Technology (OMT). The

information is used by the districts (leadership for

special projects and district maintenance), by

designers, and by the Office of Traffic and Safety and

districts seeking information on pavement friction.

The OMT runs optimizations based on targets and

Asset Management for Sustainability, Accountability and Performance 93

available dollars. The state’s pavement is categorized

by pavement and road type, level of traffic, location,

condition, and preservation history. The optimization

assigns a level of treatment to a percentage of each

pavement group, based on optimization runs over

multiple years. The Chief Engineer’s Office makes

final decisions using one of the investment strategies

output by the optimization as the basis for creating a

system preservation plan. The plan may be modified at

this juncture depending on agency resources.

OMT has developed pavement deterioration models

that can make projections with some level of

confidence. While this tool has helped with pavement

management, the cost of ancillary improvements

performed in conjunction with pavement resurfacing,

such as drainage, sidewalks, and safety, skews the ROI

calculations based on non-pavement costs. In addition,

the system contains biases that the people interpreting

the data need to keep in mind. For example, if the

performance measure is based on lane miles in

acceptable condition, the system bias will be toward

rural areas since urban projects are more expensive.

Once the Central Office has delivered the budget, lane-

mile and benefit targets, district engineers determine

which roadways will be improved. The only stipulation

is that districts must meet their targets. Selected

projects are subjected to Chief Engineer approval (to

ensure they are consistent with targets) and to benefit

analysis. If the system shows benefit targets will not

be reached, the districts are supposed to find alternative

approaches.

SHA’s approach to improving system preservation

involved transforming their organization to a

performance management culture. This process began

at the top, with leadership understanding the

importance of accountability to all stakeholders and

that accountability is achieved by establishing and

broadcasting goals, targets, and measures. Consensus

was built by involving a team of senior managers in the

development of these goals, targets, and measures. This

buy in was critical to the long-range success since it

will ensure commitment to long-term goals even in

cases where district engineers receive lower funding

than they would if they used the “squeaky wheel”

approach. Additionally it set the stage for achieving

alignment throughout the agency since it demonstrated

that leadership is unified on this approach.

This team identified the key performance measures,

recognizing that system preservation is one of the

fundamental responsibilities of any state DOT. They

then established goals for each asset category and

incorporated targets into the business plan. The need

for integrating asset management was clear at this

point, since asset management would ensure they had

the right data to analyze various investment scenarios

to determine how best to reach their goals.

Words of Wisdom

Be patient - educating employees about the value

of individual pavement management tasks – such

as filling a pothole – in the context of their

contribution to the larger scale of system

preservation takes time and effort.

Present a unified front – All senior managers must

buy into objectives and targets.

Tailor communications – Simple graphics are an

effective communication tool, particularly for

busy executives.

Collaborative Decision Making

and Support

In response to the need for an asset management

structure that would ensure the availability of

information needed for analysis of the investment

scenarios, SHA formed an Asset Management Steering

Committee in 2004. The Asset Management Steering

Committee is made up of representatives from

Planning, Maintenance, Materials, Construction,

Traffic, and IT and Policy, and includes two District

Engineers and the Program Development Division

Chief from the Office of Planning and Preliminary

Engineering. The purpose of the committee is to

develop asset management within SHA. The

committee’s bi-monthly meetings ensure asset

management initiatives are moving forward and are

particularly helpful for maintenance since SHA does

not have a strong maintenance system.

Because the agency already had a good bridge

Asset Management for Sustainability, Accountability and Performance 94

management system and was confident of the

information in the pavement management system, the

committee focus is on developing an asset management

approach for other asset classes. Limited resources

have dictated a building-block approach to this asset

management growth. Asset classes have been

prioritized based on the business plan.

Currently the most developed asset management

practices, besides pavement and bridge, exist for

drainage. Targets in this asset area are driven by

requirements for improved storm water management.

The agency is also building asset management for

traffic signals and ITS.

This group is also undertaking a data warehousing

project. SHA has completed a scope document and

request for proposal for development of this asset data

warehouse system, which is intended to provide a

central portal for agency access to asset information,

including GIS location information. The agency is

currently collecting asset data and GIS information for

entry into the data warehouse. This inventory varies in

quality and level of detail across asset classes and will

require time and effort to mature to a useful tool. They

have also recently advertised for a new Maintenance

Management System that will support efforts in asset

inventory/management for routine maintenance.

Achieving Organizational

Commitment

Maryland’s SHA believes that performance

management and asset management are closely related.

In their experience, asset management is the means by

which DOT leadership ensure the right data is available

to analyze different investment scenarios to determine

the best approach for reaching long-term goals.

SHA’s move to a performance management culture has

made asset management more visible and easier to

communicate to staff, the public, and the legislature.

This, in turn, has had a positive effect on funding and

on the agency’s relationship with the legislature. These

improvements have demonstrated the feedback loop

value of performance management: improved

performance leads to improved funding and extended

asset lifespan, which in turn improves both the private

and professional lives of staff.

SHA has faced many of the challenges common to

state transportation agencies building performance

management and asset management within their

organization, including aligning field staff. The agency

needs to get people more involved in extending the life

of pavements and make sure those districts who do not

properly maintain pavements are not rewarded with

budget increases.

While the agency is trying to move to outcome

measures, they are experiencing external pressure to

use output targets, such as number of potholes filled or

linear feet of pavement drop off repairs.

Ownership and Accountability

SHA’s funds are split by asset class (drainage,

pavement, bridge traffic, etc.). Each fund has a fund

manager whose responsibility it is to present and

justify funding needs at the annual allocation meeting,

allot funds to districts, and report on progress. This

system has worked well for the agency, particularly in

conjunction with a forum for accountability.

A Way of Doing Business

Maryland’s SHA continues to improve its performance

management and asset management practices, as well

as the relationship between the two. Initially staff

below the level of district engineer wanted more

autonomy and resisted their targets. Resistance has

subsided as the agency has had the opportunity to see

success from its pavement asset and performance

management approaches: Despite periods of funding

variation, the agency has been able to make the case for

investment in pavement preservation and has

successfully obtained two revenue increases that both

went to pavement preservation. This success is helping

the transition from a “worst first” mentality to a mature

asset management approach.

Communication with

Stakeholders

The asset management approach has increased the

Legislature’s trust in the agency’s ability to make

Asset Management for Sustainability, Accountability and Performance 95

investment decisions based on a data-driven approach,

and also allows the agency to clearly demonstrate the

impact of decreased funding on the future state of the

transportation system. Initially SHA had to educate

decision makers about the value of preservation: SHA

was challenged when it proposed resurfacing with a

thin overlay before pavement showed obvious need for

repair. It clarified the value of the approach by using

analogies to making minor automobile or house repairs

rather than waiting for major damage, which would be

more costly to repair.

Maryland also learned that breaking each asset

category down was more effective than trying to make

the case for system preservation as a whole. For

example, sidewalks needed funding to repair gaps and

bring them into ADA compliance, etc. Pulling this

asset into a separate category resulted in increased

funding for this need. They had a similar experience

with drainage, which they pulled into a separate asset

category and explained that funding was needed to

remedy water quality problems in drainage into

Chesapeake Bay.

Once these obstacles were overcome, the agency

secured revenue increases. Much of this funding is

being directed toward preservation. The agency

believes these increases reflect legislative trust in

SHA’s decision making process, which is grounded in

asset management. The agency is making progress with

demonstrating the value of asset management with

other categories.

Maryland has legislated public involvement in

developing the state’s high-level policy goals and a

responsibility to communicate progress toward those

goals. SHA’s asset management program is a necessary

part of this dialogue with the public.

Future Initiatives

SHA is continuing to build its asset management with

the goal of facilitating tradeoff analyses across assets to

optimize investments. This growth is occurring on both

the technology and business front to accommodate

increased information availability and coordination.

For example, the agency currently considers safety

needs in conjunction with pavement preservation needs

by tracking how much of the pavement money is

devoted to actual pavement vs. safety assets such as

guardrails and transferring money from one fund to the

other if justified.

To accumulate data demonstrating the value of

preventive maintenance, planning and maintenance are

working to improve communication about patching and

crack sealing projects. Although some pertinent data,

including specific location information, is incomplete,

progress is being made.

Data systems are segmented within business unit silos

(pavement, bridge, etc.) with limited GIS. SHA is

working toward a planned asset data warehouse system

that will facilitate inventory data accessibility,

coordination, and accuracy.

SHA does not plan to utilize a black-box approach to

cross-asset allocation. Their goal is to understand the

impact of a variety of investment strategies across all

of the assets within their care.

Publication No. FHWA-IF-10-009