THE ISSUE:

Effective asset lifecycle management (ALM)—the coordinated strategy for acquiring, operating, and retiring assets—is essential for maximizing the long-term value of capital projects. Facility equipment and operational assets are procured during the construction phase of capital projects; yet, many organizations struggle to integrate their operations, fixed asset accounting, and finance teams into ALM considerations during project strategy, controls, and delivery planning.

In today’s era of digital construction and smart infrastructure, project success is measured not only by the completion of construction activities but also by how effectively the project supports long-term business objectives, including capturing and leveraging the wealth of data generated through project planning and execution. Even after the construction phase, effective asset management strategies can deliver ongoing benefits across the entire organization, positively influencing engineering, finance, accounting, and operations throughout the asset's life cycle. Organizations that proactively integrate ALM leading practices into their capital project planning processes better position themselves for physical and financial tracking, asset reuse, effective warranty management, and forecasting asset replacement needs. This approach can result in operational expenditure (OPEX) savings of 10 to 15 percent and capital expenditure (CAPEX) savings of five to eight percent.¹

INSIGHTS: 

Advanced analytic capabilities enable generative AI (GenAI) by providing the necessary data insights and patterns that GenAI uses to create compelling and accurate narratives. These capabilities are designed to ensure that the data fed is clean, relevant, and comprehensive, allowing for more precise and impactful storytelling and reduced time spent reviewing and honing GenAI outputs. To build on the benefits of integrated planning and mitigate future risks, organizations should recognize that current projects shape tomorrow’s asset portfolio—including essential tools, equipment, and technology—which requires well-defined plans for project controls, asset accounting, physical asset tracking, operational management, and facility management. Without this information, organizations can face significant post-project challenges, including inaccurate asset records, inefficient asset utilization (such as delayed maintenance or increased downtime), difficulties with depreciation and valuation, and increased regulatory and compliance risks.

A comprehensive approach to ALM requires more than just technology; it calls for the alignment of people, processes, systems, and data. Deloitte's Connected Everything solution emphasizes a human-centered approach, enhancing human intelligence with machine intelligence to drive improvements in automation, performance, safety, and workforce transformation across digital networks. Organizations with asset-intensive construction programs have opportunities to:

• Align early planning and delivery approaches to ALM leading practices. Implementing common identifiers across systems, enforcing master data standards, and defining asset taxonomies are crucial for effective asset accounting and physical tracking. These elements help asset tracking to meet minimum requirements and support operational management through advanced analytics, reporting, and data post-project delivery. By capturing physical data from the moment assets are installed, organizations can enhance reliability and monitor assets in real time to predict maintenance needs. This proactive approach extends asset life spans and informs future upgrade and planning cycles. 
• Integrate the full suite of an organization’s technology solutions—including Project Management Information Systems (PMIS), Enterprise Resource Planning (ERP), digital twin, and Building Information Modelling (BIM) systems—to enable efficient communication and management of asset location and installation data. This integration can help improve tracking; inform warranty and milestone management; and streamline decision-making for contracts, costs, quality, and schedules; laying the foundation for predictive and preventive maintenance as well as future asset disposal planning.
• Overcome common project controls and planning challenges by standardizing processes, implementing decision trees for CAPEX eligibility, and providing standardized submission templates. These improvements enhance cost tracking and enable proper monitoring of the total cost of ownership (TCO) from budget through to actuals.
• Transform facilities and equipment management by standardizing master data and enforcing asset-led practices that enable space optimization, continuous monitoring, condition-based maintenance, and resource allocation.

HOW DELOITTE CAN HELP:

Deloitte’s Infrastructure & Capital Projects has an extensive background in project controls and planning, physical asset tracking, operational management, and asset accounting, as well as the targeted experience necessary to help owners strategically deliver projects with total cost management in mind. Our practitioners can also leverage Deloitte’s expansive network of professionals with deep experience in related disciplines such as supply chain management, technology, and finance.

Deloitte can:

• Evaluate and identify gaps in ALM practices for critical assets, determining whether asset inception points align with downstream requirements for master data and business information systems. 
• Develop strategies and road maps to help organizations achieve their project goals while meeting post-delivery requirements to enable efficient integration of project and operational objectives. 
• Improve asset location data and installation records to inform warranty information and milestones, optimize spares management, and promote strong master data practices. 
• Facilitate the adoption of predictive and preventive maintenance strategies to help improve equipment downtime and productivity. 
• Enable integrated project delivery through a centralized platform that manages asset information, enhancing collaboration among stakeholders and improving project outcomes. 
• Help optimize facilities management through identifying resource allocation improvements and integrations with a PMIS to enhance decision making. 
• Leverage our enterprise consciousness accelerator, a robust business process repository and transformation design tool—integrating user stories, customizations, reporting, job profiles, risks and controls, change impacts, and key technical attributes—to understand, measure, and optimize asset-related processes for competitive advantage.

For more information, please contact one of our leaders. We look forward to assisting you in your ALM journey.

¹ Ian Wright et al. “Connected Asset Lifecycle Management,” Deloitte Development, 2018.

² Paul Chill et al. “Connected Everything: Asset Lifecycle Management” Connected Everything: Asset Lifecycle Management, Deloitte Transactions and Business Analytics LLP, February, 2023.

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