Strategic Asset Management: Importance, Concepts, and Case Study Analysis

Running head: STRATEGIC ASSET MANAGEMENT
Strategic asset management
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STRATEGIC ASSET MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Concepts of strategic asset management....................................................................................2
Critical analysis of a particular case study.................................................................................6
Design and formulation of an appropriate strategic asset management plan.............................7
Conclusion................................................................................................................................19
References................................................................................................................................20

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Introduction
The main purpose of this report is to highlight the importance of strategic asset
management considering the business organisation named British Petroleum. Based on the
strategic asset management perspective, the consideration of a disaster is done, which may
have resulted from the failure of asset management and this also affects the asset life cycle.
The failure of assets’ management can be experienced in the phase of requirements definition
and during the designing phase or operating phase, which may raise the chances of risks too.
It is of utmost importance to manage the risks and mitigate those for ensuring maintenance of
consistency all throughout the asset life cycle (El-Akruti, Dwight and Zhang 2016). A critical
analysis will also be done for the incident of Deep water Horizon disaster in the year 2010,
which can further help in developing various strategic asset management practices and ensure
meeting the business goals and objectives with ease and efficiency too.
Concepts of strategic asset management
According to Campbell, Jardine and McGlynn (2016), the assets that are possessed by
an organisation reflect the value that can be created along with the costs to be incurred and
management of value creation in the future too. The strategic asset management plan can also
allow the business organisations like British Petroleum or BP to prepare a comprehensive
disaster plan and ensure managing positive brand image, patents, trade, copyrights and
reputation too (Campbell, Jardine and McGlynn 2016). The strategic management of assets
also represents the management of assets in the form of investments on behalf of others
though with the purpose of mitigating the risks and ensure enhanced business performance.
As stated by El-Akruti, Dwight and Zhang (2013), the strategic asset management could also
be related to the investments that should be done for the products and enhancement of
services considering the organisation to face some major risks and disasters, just as it could

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be found from the Deep water Horizon Incident in the year 2010. The concepts of the
strategic asset management involve managing both tangible and intangible assets and ensure
completion of the entire asset life cycle with much convenience and within quick time too
(El-Akruti, Dwight and Zhang 2013). The tangible assets of an organisation could be c where
the business can operate and various tools and techniques whereas the intangible assets or
entities should include the human resources, financial assets, working capital, brand image,
reputation and brand equity too (Campbell, Jardine and McGlynn 2016).
Figure: Asset management excellence pyramid (Campbell, Jardine and McGlynn
2016)
El-Akruti, Dwight and Zhang (2013) also stated that the strategic asset management
revolves around both the operational and strategic measurement programs, which should
assist in evaluating the changes to be done and at the same time, overcome the issues and
challenges that might have been posed by a disaster. The management of assets also has

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enabled the organisation to manage the business functions and processes in such a manner
that it can meet up to the design standards and at the same time, ensure smooth business
functioning with the monitoring of budget and assessment of maintenance costs along with
the investments to be done (Ang 2014). It has also helped British Petroleum to maintain a
right balance between the risks, performance and cost to deliver an optimal solution to the
issues faced, furthermore strengthen the skills of the workforce to ensure value creation and
reliability during the maintenance optimisation all throughout the asset life cycle (Campbell,
Jardine and McGlynn 2016).
According to Love et al. (2014), the entire asset management life cycle enables the
company to assess the impacts that can be created by purchasing the assets furthermore put
efforts for promoting the quality and duration of assets’ management, thereby ensure
maintenance excellence and minimise the risks associated with it too. Ang (2014), on the
other hand, argued that the strategic management of assets include the tracking of details
about the assets possessed by BP, then develop the asset location and hierarchy and finally
check for the conditions of assets and ensure managing the resources effectively along with
the management of materials and vendor contracts required to ensure successful business
functioning. The asset manager at BP must focus on managing the organisational properties
or assets and then manage business expenditures to ensure expansion of asset classes and
even support extensive decision making related to performance decisions, investment
decisions all across the life cycle and portfolio (Kiritsis 2013).

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Figure: Total life cycle asset management (Kiritsis 2013)
There are various stages for the entire lifecycle of asset management including the
development of asset strategy to meet the business requirements while managing the asset
management practices that are aligned with the key performance indicators or KPIs, thereby
maintain the various equipment and machineries to facilitate production and organisational
efficacy. The planning enables the organisation to forget what happened, as it can be seen
from the Deep water horizon disaster at BP, and focus on defining the asset targets, set
standards and policies to implement an effective asset management strategy and resolve the
issues (de Wolf 2013). BP could plan across the entire portfolio of assets and manage
acqusitions of land and construction of new plants and machineries. Consistent checking and
repairing should be done as well for the equipment that have been purchased, furthermore
ensure managing the organisational activities and ensure overcoming issues in emergency
situations appropriately (Campbell, Jardine and McGlynn 2016).