Framework: An Integrated Approach to Portfolio, Program and Project
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II. STRATEGIC ASSET MANAGEMENT PROCESS - CHAPTER 6 - STRATEGIC ASSET PERFORMANCE ASSESSMENT
6.2 Asset Change Management
Asset change management refers to the process of managing any change to documented information defining the scope of an asset or the basis of measuring and assessing its performance over its life cycle. The process maintains consistency between the physical or functioning asset and the documented information that defines it while ensuring that information leads and the asset follows.
In other words, the process goal is to ensure that no change is made to the physical asset or its function until the requirements assessment and asset planning processes define, document, and decide on the change. This improves strategic asset planning by ensuring that the information that forms the basis of planning (i.e., basis documents) reflects the asset as it actually exists. If the basis documents are not consistent (i.e., someone has unbeknownst changed the asset), then it is more likely that the wrong investment decisions will be made, projects will be less cost effective (e.g., rework to address poor scope information), asset performance assessments will be somewhat meaningless, and costly corrective actions will have to be made to the asset.
The asset and project change management processes (see Section 10.3) are similar. Both include steps for the identification, definition, categorization, recording, tracking, analyzing, disposition (i.e., approval or disapproval for incorporation into requirements and plans), and reporting of changes. The difference is the emphasis on the scope of "work" in project control and the scope of the "asset" (or information defining it) in strategic asset management. In both processes, change management imposes the required structure and discipline in their respective overall processes by protecting the integrity of the control basis (i.e., it represents a plan in alignment with objectives and requirements) for performance measurement. The process objective is not to limit or promote change, but to manage and report it. Change can be good or bad, but it must always be carefully evaluated, approved, or rejected, and upon approval, methodically incorporated into the revised baseline plan.
The process described in this section deals with managing changes to the asset portfolio performance control basis, but does not include processes that might lead to a change request. For example, business process reengineering (BPR) is a common method used to improve and change processes of all types. BPR itself is not included in TCM, but because the definition of the new or revised process resulting from BPR is a type of asset, TCM ensures that the changed documented process definition is a suitable basis for measuring and assessing the future performance of that business process.
.1 Asset Change Management and Configuration Management
Asset change management also shares the same goals and framework as the configuration management (CM) process. The section title of "asset change management" is used because the process is not identical to those promulgated by the Institute of Configuration Management (ICM) or contained in published standards. CM traditionally was focused on engineering documentation, but has evolved in recent years to encompass the entire business process infrastructure and include any information that could impact safety, quality, schedule, cost, profit or the environment. In other words, CM is coming closer to asset change management which recognizes that all these impacts have cost management implications.
CM, as with other strategic asset management methods (e.g., QFD, ABC/M, etc.) has been used most frequently in the software, product development, and military program arenas. Many enterprises in these arenas have established functional organizations for CM. However, the asset change management process is equally applicable to any designed environment (i.e., any asset).
.2 Information Ownership and Change Management Authority
Each asset has its own unique set of defining information or documentation. Changes to the documents are managed; the physical assets must then conform. The documents specify, define, or describe the requirements, asset planning or design documents, processes, and so on. Rules of the CM process specify that each document be co-owned by its creator or author and one or more of its users. The co-owners are responsible for its integrity and have the authority, together, to make changes as needed. Co-ownership of the documents ensures that the process maintains consistency between the physical or functioning asset and the information that defines it while ensuring that information leads and the asset follows.
In the case of new or modified assets created by a project, design or other basis documents are validated at project closeout and turned over by the project "creators" to asset management and the new "users." Document control procedures establish how documents will be managed during the project and how ownership will be transitioned.
6.2.2 Process Map for Asset Change Management
Figure 6.2-1 illustrates the process map for asset change management. As was mentioned, the change management process closes the strategic asset management loop. It is largely a governing process that is characterized by extensive interaction between the performance assessment (Section 6.1) and requirements elicitation and analysis and asset planning processes (Sections 3.1 and 3.2, respectively).
Figure 6.2-1 Process Map for Asset Change Management
The following sections briefly describe the steps in the asset change management process.
.1 Plan for Asset Change Management
Asset change management starts with planning. Initial planning starts with requirements elicitation and analysis (Section 3.1) and continues through the investment decision making process (Section 3.3). It is critical that the basis of asset planning and design and decision making be thoroughly documented because all changes are assessed relative to that documented basis. The asset change management plan itself should describe specific systems and approaches to be used in change management in alignment with the other planning, measurement, and assessment processes.
Successful change management starts with good strategic asset planning. Even the best planned and executed change management or CM processes and systems have been known to collapse under the burden of the avalanche of change requests that result if initial requirements assessment and asset planning is poor.
Planning also assigns specific roles and responsibilities for asset change management. Some enterprises may employ CM specialists to facilitate the process. As was mentioned, each basis document should be co-owned by its creator and one or more of its users and they should be identified during planning. The co-owners are responsible for its integrity and have the authority, together, to make changes as needed. Cost engineers are often responsible for change assessment work. However, those responsible for the documents and assets affected by change will be included in assessments as appropriate; this creates a significant communication challenge.
Another aspect to plan is the use of tools and systems for asset change management (e.g., CM software, forms, etc.). In addition, the interaction/interface of the owner, suppliers, and contractors in asset change management must be addressed in change management plans.
.2 Identify Performance Variances and Requirements Change
The asset change management process depends on the co-owners of basis documentation actively watching for potential or actual changes to requirements. In addition, the performance assessment process (Section 6.1) identifies and notifies whoever is responsible for the change management process of asset performance variances.
The initial notification should be immediate (e.g., verbal, email, etc.), allowing asset management to make immediate disposition (e.g., reject, direct an action, etc.) as appropriate. Immediate disposition may be appropriate if the correction action clearly has no significant impact on basis documentation or the performance of other activities. However, if the issue cannot be disposed of without further analysis of its nature and consequences, the notification is done in writing, usually using a previously established notification form. Notification forms have many names (e.g., design change requests, etc.) but all have the same purpose of providing asset management with a basic description of the nature of the change, a quick assessment of its cause and general impact, and basic descriptive data (e.g., name, date, scope, etc.).
Once notified, asset management records and begins tracking the change requests (i.e., using a change log or logs) to ensure that the process addresses each one appropriately. Notices should be categorized in the logs by source (e.g., engineering, operations, maintenance, etc.), cause (e.g., safety, environmental, operability, etc.), and so on, so that management can better understand the change drivers. Applying greater levels of definition and categorization to notices during the logging process allows for improved analyses later in the process when root causes for change drivers are being sought and lessons learned are being determined. For suppliers, the contract will establish mechanisms for handling change requests.
Notification of performance variances is typically part of the normal assessment and report cycle. As with change requests, immediate disposition may be appropriate if the performance correction action clearly has no significant impacts.
For those change requests and variances for which disposition is not immediate, further definition and analysis is required before corrective actions can be taken.
.3 Analyze Variance
Variance analysis is a process to determine if a variation is a trend or a random occurrence and whether the variation is acceptable (it is argued by many that no variation should be acceptable). If the variation is not acceptable, variance analysis also determines the most likely cause of the variation (whether it is a trend or random) and identifies potential corrective actions that address the cause. Corrective action alternative development is integrated with the asset planning process (Section 3.2).
.4 Define Change Scope
The scope of requirements change requests for which disposition is not immediate must be defined. The cause must also be assessed (e.g., requirement not meeting some specific customer need). The individual notification should include a basic description of the nature of the change, a quick assessment of its cause and general impact, and basic descriptive data (e.g., name, date, etc.).
After notification, it is usually the CM specialists (or equivalent) responsibility to further define the scope as needed to assess the change impact on requirements and planning. This scope definition step is integrated with the requirements elicitation and analysis process (Section 3.1). At the same time, the most likely cause (e.g., failed to assess this specific customers needs) must be determined so that corrective actions can be developed that will both address the cause and mitigate impacts.
.5 Assess Impact
Having defined the nature and cause of trends and the scope and cause of requirements changes, corrective action alternatives are developed and assessed using the asset planning process (Section 3.2). The asset change management process may initially identify alternative actions to implement requirements changes and to correct performance trends (including process improvements).
.6 Make and Track Disposition
Based on the impact assessment, a correction action is decided upon and implemented as appropriate. Management records and tracks the change requests to ensure that the asset change management process addresses each one appropriately.
.7 Resolve Disputes and Claims
Managing contract change is a part of the change management process. The interactions/interfaces of the owner, suppliers, and contractors in change management are addressed in contract documents and change management plans. Disputes and claims may arise in contracts related to either asset management or project control; the general discussion in Section 10.3.2.8 is applicable to both situations.
.8 Revise Measurement and Assessment Basis
The asset change management process, in integration with the requirements assessment and asset planning processes, results in a revised basis for investment decision making and, if implemented, a revised basis against which performance will be measured and assessed for the remaining life cycle of the asset. It is a project control responsibility to keep those responsible for work packages apprised of the approved control baselines.
At the close of the asset change management process, historical information, including experiences and lessons learned about change management practices, is used to improve change management tools such as notification forms, logs, procedures, etc.
6.2.3 Inputs to Asset Change Management
.1 Requirement Documents. (see Section 3.1). Requirements specifications against which variances and changes should be analyzed.
.2 Asset Planning Basis Documents. (see Section 3.2) Documents from planning and design against which variances and changes should be analyzed.
.3 Investment Decision Basis Documents (see Section 3.3). Documents regarding decision analysis assumptions and constraints against which performance variances should be analyzed.
.4 Other Change Requests. Any notification to asset management of a potential or actual change.
.5 Asset Performance Assessment Findings. Performance assessment (Section 6.1) identifies differences between actual and planned performance for variance analysis in the change management process.
.6 Corrective Action Alternatives. Alternative designs, specifications, and so on are identified in concert with the asset planning process (Section 3.2).
.7 Alternative Requirements and Plans. Requirements elicitation and analysis (Section 3.1) and asset planning (Section 3.2) provide basis information for alternate corrective actions and designs.
.8 Historical Information. Successful asset change management approaches are captured and applied as future planning references and to help improve change management methods and tools.
6.2.4 Outputs from Asset Change Management
.1 Performance Variance Causes and Potential Correction Actions. Variance causes and possible corrective actions are further assessed in the asset planning process (Section 3.2).
.2 Requirements Change Scope. After identification of a requirements change, the requirements elicitation and analysis process (Section 3.1) is used to further analyze it.
.3 Corrective Action Alternatives. In interaction with asset planning, the assessment of impact may identify additional corrective action alternatives.
.4 Changed Requirements. Approved requirements are defined in the asset change management process and are inputs to the asset planning process (Section 3.2).
.5 Defined Corrective Actions. Approved corrective actions are defined in the asset change management process and are decided upon in the investment decision making process (Section 3.3).
.6 Information for Forensic Performance Assessment. (See Section 6.4).
.7 Historical Information. Asset change management approaches are captured and applied as future planning references and to help improve asset change management methods and tools.
6.2.5 Key Concepts for Asset Change Management
The following concepts and terminology described in this and other chapters are particularly important to understanding the asset change management process of TCM:
.1 Asset Change Management. (See Section 6.2.1).
.2 Change. (See Section 6.2.1).
.3 Requirements. (See Sections 3.1 and 6.2.1).
.4 Basis Documentation. (See Section 6.2.1).
.5 Configuration Management (CM). (See Section 18.104.22.168).
.6 Document Control. (See Section 22.214.171.124).
.7 Corrective Action. (See Section 6.2.1). Also referred to as improvement action.
.8 Variance. (See Section 126.96.36.199).
.9 Variance Analysis. (See Section 188.8.131.52).
Further Readings and Sources
The asset change management process is primarily covered in configuration management, document control, and general quality management texts. The following references provide basic information and will lead to more detailed treatments.
Guess, Vincent C. CMII for Business Process Infrastructure. Scottsdale, AZ: Holly Publishing, 2002.
Institute of Configuration Management. CMII-Model for Configuration Management (White Paper-Revision B). ICM, 2003. (see www.icmhq.org)
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