New Practice for Third-Axis Methodology for Strategic Public Asset Readiness
1. Scope
Not about financial assets, the standard provides a forward-looking readiness measure that scores the magnitude and timing of misalignment between a type of public infrastructure asset in terms of its design intent and future operating context. It provides asset-instance-level scoring where, in addition to Likelihood of Failure (LOF) and Consequences of Failure (COF) two-dimension scoring, the asset is scored on external factors that are environment-driven and demand-driven, e.g., zoning changes, growth forecasts, climate projections, policy shifts, demographic trends, and planned utilization — not by the asset's current condition. With three dimensions captured, executives are provided three-dimensional visualization of an asset’s alignment with its present and anticipated service. In this way, this tool projects when an asset or a cascading family of assets are likely to become inadequate for planned demand — giving leadership years of warning before the constraint becomes critical. As a strategic alignment metric, it informs the executive when assets become too small, too big, or operationally stranded in a planning horizon, even if they never fail.
Keywords
public asset; planning, likelihood of failure; consequences of failure; misalignment; design intent; future operating environment; asset-instance-level scoring
Rationale
Traditional asset management uses the two dimensions of Likelihood of Failure (LOF) (whether an asset will break) and Consequence of Failure (CoF) (how bad that break will be) for assets showing signs of distress or systems under known stress. By adding the third dimension (that characterizes conditions with forward-looking questions, i.e., questions LOF and COF cannot answer), a person is able to answer: Will this asset still fill its role in five years; is demand outpacing capacity, even though the asset is structurally sound today; is the operating environment shifting (e.g., through zoning, climate, flood risk, or equity priorities) in ways that make the asset strategically misaligned; and, is this asset overbuilt and underutilized, consuming capital without delivering value.
