How to Implement Continuous Improvement in Asset Planning
Today’s asset managers face several challenges: Rapidly deteriorating assets due to aging and delayed works during the pandemic; ever-tightening budgets due to new global financial instabilities; and the need to clearly communicate asset performance, cost, and risk trade-offs. The ultimate goal when addressing these issues is to enter a continuous improvement cycle, using strategic asset management to provide data-driven and evidence-based scenarios. Watch this webinar recording and learn how to:
- Start with what you have and build on it. Don't wait until a perfect data set is available to get started with life cycle analysis of your portfolio.
- Implement a process of continuous improvement. Hear how the University of Adelaide adopted a dynamic life cycle approach, continuously validating building capital works against refined modelling iterations.
- Build stakeholder confidence and engagement through storytelling. Using visualisation platforms such as Arc GIS Storymaps and PBI.
Vikram Kenjle, Manager – Asset Investment and Decarbonisation, The University of Adelaide
Renuka Ranaweera, Lead Asset Management Consultant, Brightly
Brad Campbell, Director of Strategic Asset Management, Brightly
Thanks for attending this, Brightly insights for leadership webinar.
Those of you have joined previous webinars. We hope you've been enjoying and, and learning a lot. For anyone who'd like to ask a question, check out a detailed speaker's bio, contact us, or request a demo, please use the icons at the bottom of your screen.
And please send through your questions at any time during the webinar. We will plenty of time at the end to have a discussion.
Our speakers for today are Bikram, who is the manager vasset investment and decarbonization at the University of Adelaide.
Vikram currently heads the University of Adelaide strategic plan for portfolio asset investment, engineering master plans and dis and diversification of energy sources for improving energy security.
Renuka, the lead asset management sorry, the lead strategic asset management consultant at Bradley, Bernuka is Bradley's most experienced strategic asset management consultant. We've close to fifteen years in the industry working across all different sectors, including local government, transport, and facilities, particularly in the education space.
She was also, twenty twenty two winner of the Bradley Circle of Excellence Award for some of her terrific work in the last twelve The topic they'll be speaking on today is how to implement continuous improvement in asset planning.
They will discuss how to address the many challenges faced by asset managers today by entering a continuous improvement cycle using strategic asset management to provide data driven and evidence based scenarios they will discuss. How to start with what you have and build on it, How the university of Adelaide adopted a dynamic life cycle approach continuously validating building capital works against refining model iteration, how to and how to build stakeholder confidence and engagement through storytelling, which for mine is probably the most important thing that we do in asset management. So I can stick around for that last bit.
I'll now hand over to Renutica to start the, the the webinar.
Thank you, Brad.
And thank you everyone for joining us today.
I want to start with a little story.
So so I was born and raised in Sri Lanka and Sri Lanka is a beautiful country and few months that I had the opportunity to, go back to Sri Lanka and spend some quality time with my family. And you can see that's my, mother and my sister. And then, to the right, so it's my father-in-law.
So while I was there, we went, I visited places with them, but two things that, my mom and my father-in-law said Actually, I keep thinking about it every day when I work.
And my So my mom, my sister and I went to a world famous temple in Sri Lanka. And then my mom said I'm glad I came here today because in few years time, I won't be able to climb the stairs to get to the temple. Of course, we had to go down number of stairs to get into the temple.
And then I was out with my father-in-law, at a recently a, cycling and jogging track that was opened few years back. And we were sitting there so we enjoyed like other people doing lots of different things, etcetera.
And then my father-in-law said, so I'll read out what reset exactly. So I hope next time you come back with kids after three or four years, we would still be able to come here to spend sometime at this place like we do now.
But I doubt it will be the case as our politicians just want to cut the ribbons of new asset. And they don't think about maintaining those these assets.
And they don't have a clue about where and how to spend money.
So with that like I thought my god. He doesn't have any idea what I do professionally, but he's told he talked right into my heart.
So final outcome as we in what we do as asset management practitioners or people who are in charge of managing any type of as a portfolio or like as a custodians.
The final outcome is to create and maintain the built environment. And in some cases, even the natural environment.
So our families, our friends, and the community can lead a happy, healthy, and safe life.
And that actually reminds me So the one thing I do is, assets are they are to provide a service to community and managing the assessed sustainability at an optimally to realize the value is our response ability as the people who are involved in managing these assets.
So what we are going to talk about today is essentially a sophisticated version of my father in law's addressing my father in law's concerns by University of Adelaide.
And UNicity, but University of delegates has been trying to do is creating a safe, comfortable environment for its students and the the researchers and the staff by creating that environment where they facilitate everyday work. The learning experience, the students get the teaching experience for the staff or the research experience.
So, essentially, to provide that built environment where they don't have to think about any problems they can go on doing what they wanted to do.
So the University adulates strategic asset management maturity journey over five years has been a continuous learning curve we are after identifying the problem, they challenge the traditional way the university's birth and look at how the other organizations, especially local governments in Australia and New Zealand.
Do the asset management and try to take the advantage of emerging technologies to find a balance of asset performance with risk cost and opportunities.
So if we think about but Australia about the local government infrastructure that in Australia.
So There are like many different types of asset they manage from transport network to dead like all the others open spaces, it's recreational facilities. And it's estimated they manage roughly the asset value worth of five hundred thirty three billion.
And every day, these asset days keep increasing.
To meet the community needs because we have population increase. There's a change in the needs. So we keep adding new assets and The problem is existing assets get degraded all the time.
So if we look more closely into the problem, so every asset, whether it's a road, whether it's a building, whether it's a sewer or stormwater network.
So every asset deteriorates over time.
And if we look at if you think about any assets, they start its life as a brand new asset and So it's actually fit for the purpose in brand new condition. Everyone's happy and meet the capacity. So every other space for everyone to go there use the essay. But as that as ages. It's continuously like slowly deteriorates. So the condition becoming not so ideal than you, but still it might serve the purpose. And as the time goes on, it it actually come to a state where unless you do some reliable renewals, so it might get to a condition that it's no longer usable or provide optimal service.
So if you look more and so this is how every asset behaves Now the challenge is what if you have thousands and thousands assets you manage and these assets like you might have number of assets at each different stage of its life cycle. So if you look at this, If you think about your asset base, it might be spread over the whole of these from brand new state to end of life. And your rating can be it's a brand you can any ratings can it might be brand new, you might have organization use as a condition zero or condition one in excellent state. And condition six to say it's end of life. But what we need to realize is as the asset, deteriorates, If you wait until the very end to take action or to do the repairs renewals, the renewal cost might be very high. But if you intervene with earlier than that, you might not have to spend that amount of money. So it might be less money.
And also to keep assets in its life cycle So it doesn't matter even the acetyl in a brand new condition. You might have to spend some maintenance money on it. Doing the regular cleaning.
And maybe the, like, leaks come up.
Etcetera. So you might have to spend maintenance money, but as the asset ages, you can see that there would be more leads coming up. More propose to fetch. So you would be spending more money actually reacting to those requests where you go and your maintenance crew would go and do the work.
So the challenge is how do we find the sweet spot where we do say, okay. We don't want to spend that too much. But, how do we find the balance between what I need to spend, but also keep delivering the service in a manner that other communities or other customers do not suffer and they will keep them satisfied.
So the biggest challenge what we have is if we have enough money to spend, we don't have a problem. But every organization, the problem is you only got limited amount of funding every year to spend on your existing assets because all the asset managers They need to compete with the funding needs for new assets or the funding required for service operations and so but you need to compete for as a renewal is with those. So how do we make a business case for that like we need enough money but there are number of different ways you can address this. First is that you can keep asking more money but the problem is unless you clearly show that you will have a problem, you will not get that money and the organization might not have more money to give you. But if we stick with that, what happens is your assets keep deteriorating and the service you provide will compromise, and there can be safety risks, and there can be risk to organization, reputation, etcetera.
So the accidental but what we can do is actually try to see with the amount of funding we have. How can we optimize our service delivery? How can we bear to spend the money So as an organization, we minimize the risk like the service risks.
And that's where I think most of you have heard the word levels of service.
So what's level of service?
So level of service simply mean look at you look how do you define from your customer, community perspective, the outcomes or the outputs and defining the targets of how do you measure and then defining the targets you would achieve. So everyone understand that these are the outputs outcomes that we intend to provide, and these are the targets we would So if we look at, let's take example of, yeah, two assets and two services tied by like these assets. And one is a community center and number of customers who use this, a community center per year would be like, let's say, twenty two thousand people.
And, then there are, say, according to a service level document you have. So there can be number of failures or service failures mean where the community hall might not be available to use for customers, maybe five times per annum, or it can be by days or five weeks. And then you would be spending like a certain amount of money on capital and the maintenance, etcetera.
And you can define if you think about everything that's going into maintaining that facility, you can say, there's a certain cost for each customer who use that, facility.
And we'll compare it with another facility where the users might be just two hundred people here and that might be a university research laboratory.
And there are these researchers or these can be PhD students and the staff who use this facility for research activity And then they are also they might be the people who actually pay a significant amount of money to do the work there to to study there. And so how do we define the level of service whether we sing the facility that's used by twenty two thousand people. Is that important or is that critical or the facility which is used by just two hundred people. So there's no right or wrong answer. It's all about what organization trying to achieve. And what's important to the organization?
And what would be the impact of failure of that asset in any way.
So what would be the impact? What is the how many people would be impact or what is in terms of cost?
In time to rectify that. For example, if it's a research level, if there are significant research being done and failure of air conditioner, So what would be that impact? That might be a huge one. So that's the need to define the level of service or criticality of that building to the organization in supporting the organization objective.
So And also when we look at the other way of how you want to spend your money, there are a number of challenges the asset managers face today and especially with the current climate, just increasing funding volatility.
And also, there's a lot of emphasis on having resilient and adaptable infrastructure in face of climate change.
And our community and our customers become more and more aware of sustainability and they expect lot of environmental social governance from organizations.
And there's also regulatory requirements coming up and that organizations need to add here. So when we talk about how do we spend our funding in optimal way. We need to think about all these challenges that we face.
So in simple terms, so what we are trying to do is create asset plan. It can be might call like number of different we can use this. It can be. As a management plan, as a investment plan, or simply as a journey, So why we need that? Because we need to plan for the future because we are going to live. So we are going to spend rest of our lives there. And our kids, our grandkids too.
And the tools we have today for that as a planning is actually as strategic asset management.
So what strategic asset management is like taking a long term approach to managing the folio, instead of planning for short term needs or budgets or just for the collection cycle. If I have four years or five years in some and align that as a portfolio planning to high level strategic objectives of the organization and also it gives to number of different options.
So if there are the decision makers can evaluate the impact of different options on its portfolio for the short as well as in the long term. So strategic asset management is simply balancing the prepared or required level of service with the cost.
And then how do you manage the risk and the opportunities?
So what we are going to talk about today is okay.
How do we do that But just a fun fact you have is when we talk about the future, actually, if you have ever have you ever thought how much time you in that in the future, you would spend on buildings. Actually, it's ninety percent of our lives.
We spend in buildings and according to Dassy Court. So if you have average life span is seventy nine years, that means around sixty nine sixty nine years, you would be spending indoors.
And out of that fifty four percent at home, twenty six twenty six years in bed. And you probably spend just six years outside. So that's a very good okay because we focuses buildings and that's a good way to see why we need to treat buildings.
But before I go there, Can I just I think we have a little poll to say because we are going to talk about asset investment planning And can you please answer this question? So it's simply just your organization have as planned for the next ten years. It's simply say, do you know how much money you would need to maintain your asset portfolio. So if you know whether doesn't you don't have to know the numbers or anything, just please work yes or no. So whether your organization have it or not.
So in, you know, in Australia, like the local governments, they do have a, like, long term financial plan. And, but yeah. So we'll have, like, about fifty year.
So now we got about, oh, this.
Can say sixty percent or sixty people actually submitted. So which is good.
Okay. Let's have a look at the results.
So that's good. So eighteen, nearly ninety percent said, yes, you have a, look like a financial plan or accepting plan and eleven point five percent said no. And I think coming well, like mostly, especially in Australia. So we know a lot of organizations have that plan. So for those who answered yes, can I ask you another question?
It is so does your asset enhancement plan or the loan term financial plan?
Informed by US management plan. And that mean do you know whether have you managed US how you manage your asset portfolio. You are forecast for managing that asset portfolio, informed your financial plan. So, yeah, we know, like, some, for example, some local governments have this long term financial plan informed by asset plans just for some asset classes, but not all their asset classes. They manage. They have these asset management plans. So please, yeah, if you answered yes to your previous question, please answer this one.
So we'll give you a few more minutes. Few few seconds.
Yeah. It's keep coming.
Okay. So if we go and have a look at the, We have like, that's over fifty percent saying, yes, the long term financial plan is in formed by the asset plans. And then there are slides. Okay. It's just a financial plan, not informed by that. To asset management planning and then some say it's, only for some asset classes.
Okay. Now you might be thinking, like, if you don't have, any asset management plan or if you have wonderful some classes you might be wondering.
How do where do I start? How do I go and actually create going to create the investment plan or asset management plan because there might be, so I don't have money, I don't have resources, etcetera.
But what we need to understand is if you want to get some, yeah, you have to start You have to start that journey. And asset management is a journey. It's not a one off implementation.
So it means you might be in terms of your maturity, you might be crawling. Or but you need to take baby steps after calling if you want to work and then go to a flight. So I'm not going to read, like, everything here. But in terms of what we want to tell is it's we have seen There are so many organizations at various level of various levels in this maturity curve. And you can start.
It doesn't matter where you are in terms of maturity. You can start And that mean you might be wondering, I don't have any information.
Oh, I don't have it. I don't know much about my assets. So what should I do? So this is where I like we are going to talk about how.
During the city of Fidelity.
They started its journey and its journey up to now. But before I go move into university of Fidelity, we'll just have a quick look at what the Australian, tertiary education sector and what it does with the asset management, how far they are in their maturity.
And we know a lot of asset management in local governments Australia and New Zealand driven by regulatory requirements.
And yeah, that's where you get the stuff. But with the tertiary education sector, there's hardly any, any regulations related, that governing the how you manage the assets.
And so there's no much precedence driven in strategic asset management planning in the education sector.
And one of the things is that Australian tertiary education sector is highly influenced by national and international and socio economic environment. So there are lots of policy students studying in Australian universities, And we see a number of times, for example, after example, we are the political situations around the world impacted, impacted the tertiary education sector in Australia.
So But now what we are going to say is how University of Adelaide put a different cap and thought about the innovation how do we make a difference?
Because our sector is not used to strategic asset management, but how do we do that? How do we actually be a leader in creating asset investment plan through a strategic asset management and get there. So now I'll hand over to Vikram, who is the champion in driving the University of Fort Adelaide, asset planning to talk about their journey. Okay. Over to you Victor.
Thank you, Renuka.
So yeah, in terms of where we come in. So today, I'm gonna talk a little bit about the university of Adelaide, who we are and the type of assets that we manage.
And effectively, I will just start off by saying that the university of Adelaide is the total just university in Australia. So we are coming to one hundred and fifty year celebration next year. So we have quite a lot of assets which are quite old. We consistently rank in the top one hundred in the world in terms of various research elements. We are a member of the group of eight universities, which means that, university of Adelaide is quite research focused compared to many of our peers who are teaching focus. So the type of research, again, and the facilities we have differ from many of our counterparts.
So overall, we are spread across three main campuses with the main campus being, in the heart of the Adelaide CBD. We've got another campus, at Waite, which is at the fringe of the Cbd. And then we have a regional campus spread across about sixteen hundred hectares, about seventy kilometers away from the Cbd at Roseworthy.
Overall, we have about three hundred plus buildings with a total portfolio value of replacement value of about two point three billion So what's really interesting about our portfolio is no two buildings really are very similar to each other.
They differ in various different ways. But in regarding age, we have our newest building, which opened about five years ago, and then we have buildings coming up to nearly one hundred and fifty years old. In terms of their functionality also, they have massive differentiation, some which are research intense focused, including cryogenic and state of the art, defense space, engineering research to others which are more lecture theatres, office spaces, our theaters. So you name it and we have it sort of. So each campus is like a small city in its own way.
So for us really, the, the complexity then keeps on getting added because we have different operating hours through buildings, some which are only used few hours a year to others which run, operate twenty fourseven.
So when we looked and looked at our traditional asset investment sort of planning process, we were sort of identifying quite a few challenges and wanted to, see how we can improve them So some of our key drivers really for improvement came from looking back about what how we were doing things and whether there were other ways of acting this challenge. The main thing for us really was we realized our planning was heavily reliant more on opinions and perceptions from key stakeholders.
Because we did not have a consistent evaluation criteria for how to spend money and where to spend money in which year across which building So we needed to, sort of tackle that challenge first. The second one really was our funding levels who are typically based on passing experience are not necessarily forward looking. So as Renuka said, when we look at asset degradation, we do have some steep curves coming for various assets. And when we look at those in, in terms of thousands and thousands of assets across buildings, how do we really have a better grip on evaluating that risk So that's what's something that we wanted to understand a bit better.
The third one, traditionally, which worked a lot for sort of single type of assets was industry thumb rules about if you spend certain percentage, in, in, in every year across maintenance, you have probably a good grip on your, passive degradation.
But for us, again, those sorts of tongue rules didn't make sense. Because of the diversity and the variations I just showed in the previous cycle.
So really for us, it came down to how can we develop something which is defendable?
Because come, as Renuka said, over the last few years, when we have had a lot of funding volatility, we found that infrastructure funding levels were an easy target because people thought that, okay. If you cut, make some cuts, we don't see any impacts immediately so that should be okay for our assets.
So with that really, we went on to did, do a bit of research, speak with some peers in our, sort of, other sectors to understand how do they do, their strategic asset planning. And what we sort of, came up with, was a list of desired outcomes.
And the first one for us was development of a long term asset, investment plan, but with the ability to test different funding scenarios and, sort of assess different degradation levels and then come up with an optimal funding level for us. We also wanted to tackle the challenge of uniformly evaluating every building and sort of make it more objective than subjective funding.
We were also trying to sort of develop building management plans coming out of the model. We wanted, in active dashboard, which is easy to communicate to senior leadership. And eventually, we want to align all of our pro asset management processes to the eyes of five thousand.
So there was quite a lot list of what we desire.
So with that, really, we embarked on the journey to identify who the key players, are in the market, who could assist us with some of these goals. And we came across ascetic or none known as brightly. And through multiple sort of discussions, we sort of, or I said, okay, let's, let's do this across as a pilot project and we nominated initially just two buildings to begin with, and they developed a sort of an, an indicator asset management plan for us We went, back and then did some quick, validation of some of the motor outputs based on our knowledge of those buildings and we had independently also developed. And once we had a bit of confidence in the model, we then decided, alright, let's go and expand this across our portfolio.
And, and that was quite a challenge because taking it from a couple of buildings down to now across our portfolio, we realized that we first needed to take a step back and understand what were some of the key modeling inputs required in a consistent manner. And so we took our time, worked with aesthetic again, or with Britney again, and, and really came up with some minimum levels of data as well as some minimum levels of agreed inputs into the model, which meant both our requirements as well as what the model needed in a consistent format.
And those were really across three categories when we're building performance life cycle strategy and financial input.
So we started off with building perform And the biggest one for us was really trying to group our entire portfolio in at least some manner of credit cality, and we came up with four groups for high medium support and low. And these were really the overarching parameters across which then for individual groups, we started sort of delving a bit more deep in-depth and developing individual levels of service and target ambitions as Raynuka had mentioned earlier.
So for us, then we went on to our data collection strategy because as you would have appreciate across three hundred buildings, we can go on and collect lots and lots of data. But again, what is where where do we start and how much money we wanted to spend on this to try and at least understand what the model might come up with and our sort of we were still in that phase where we wanted to understand whether this is even a process that's gonna result in something meaningful for us. So we, we prioritized physical condition because that was the most obvious to begin with. And also, that was something which could be defined well for us. So we started with physical condition and said we will add other parameters later.
So for us, really, within even the physical condition of across three hundred buildings, we took a two step approach for support and low priority buildings, which together accounted less than fifteen percent of our overall building, replacement value. We took a simpler approach of the defining condition a whole building level. But for then, the more mature, buildings, the high and medium priority buildings we took our time and understood how to do it well. And effectively, we divided every building into twenty nine elements as, as an example, as what has been shown here is for, for every building we had, things like air conditioning, to the floor coverings, air can, fit outs, electricity, water, gas services, all of that broken down by element.
And then having an audits done to understand what condition rating do we have as a starting point across every building. So that was quite a intensive exercise, and we spent over twelve months in creating all of that data. And once we had all of that, in in a really good uniform dataset.
We then reengaged aesthetic, and then I'll give it back to Renuka to show us how good went about helping us with the actual modeling side of things.
Buildings are inherently like complex assets, but you can break buildings into, like the flows and then rooms. And also if you look at how we actually manage the buildings performances. How do we plan and the reporting? There are a number of different layers.
So you can have there are certain aspect that you would take a top down approach, and that's your organization's strategic objectives and how would flow into levels of service and also the available funding for the organizations comes from that at the top level. But then you would also have if you look at the rooms, you manage your, you do your maintenance at room level. The recognition of the room is working or not. That's at the very low level.
And you can also then the condition and, other performances. You can integrate from rooms to buildings to and then for, in case of universities, campus to university level. So But you have to understand is this can be you can make it a simple process or it can be very complex for mature organization.
So with, as Micram mentioned, so you, university of Adelaide started with, okay, with the buildings, we will concentrate on buildings, and we would look for like the building components for critical buildings. And for the others, we would adapter like a building level, collecting the performance, collecting performance data at buildings level. So in terms of actually the parameters we need for life cycle modeling. So how do we come up with the replacement cost?
So We, Unicity of Fidelity had the replacement, well, like the valuations done at the building level. For, every building. So we use that information, but for to come up with element level, component level replacement values. We use, industry benchmark like rollins and construction guidelines to break the replacement value into, component replacement values.
And we also said, okay, looking at what would be the applied rate? We might not go and renew the whole component. We would only do we will only do it fifty percent of the replacement value to do the renewal. So we applied that those values.
And we look at the useful life of different components and depending on the use some buildings are operating extended. There was some twenty fourseven. So we adopted we did the changes, find you the, useful lives. To those situations and also about the degradation profile.
We started with industry benchmark profiles and then we change it to like we, our discussion with the stakeholders, we change and fine tune those into one. And of the key things we discussed earlier was minimizing service risk with the levels of service. So we that how the building components contribute to the service that building provide? For example, So, service items like mechanical or electrical items might have a hybrid impact on that service, they provide rather than the static, like, for example, flow coverings or, more land ceiling finishes.
So we used that combination of building hierarchy and the element criticality in determining actually the intervention points.
And we looked at different funding, what if, funding scenarios And what life cycle modeling gave is okay. What would be the ideal funding levels?
The model say okay. You need this much of money to maintain all your assets at the desired service level. And we looked at, okay.
How much like what's the current plan the university has for its building portfolio?
And then we also looked at different scenarios. What happens if we have increased funding, decreased funding. And then at the later stage, We also take, okay. What's the minimum funding required to maintain eighty percent of our floor level? By floor area in a certain level. So that that's where actually the intellectual journey university came a long way in determining like for each category of buildings. So how do you want to maintain that level of service?
So I think then what we did was that how do we present that outcome? So how do we communicate those outcomes to the, our executives. Oh, in general, like the stakeholders, And I'll hand back to, Vikram to take us through how, yeah, university erupted, like, the power we, I visualize session dashboard to communicate those outcomes.
Thank you again, Renuka. So for us, as Erinneka said, we had already chosen Power BI for our interactive dashboard, sort of communication for other tools and, systems So it was good to see that we could align that with, aesthetics, sorry, Brightly's output and develop the similar levels of power bi dashboards.
For us really, and, and this is subject to every organization as to what's really, important for them. For us, we had various levels of stakeholders from, sort of, CFOs or CEOs who are more interested to look at things at a holistic and, level. At a portfolio level, how we are tracking, to then really, sort of passive managers and, facility managers who want to delve a lot more into what what if scenarios. And this is an example of one of those what if scenarios for us really in terms of across the twenty five year period from year one if you did to mind, if we can afford x dollars per year, how does at a portfolio level are asset deteriorate compared to that if we leave it to the model to tell us what is required to maintain an ambition.
It then sort of has really high, those blue lines, light blue lines, as you can say, is it it determines at what levels in which year you have to, to, to invest. Now that's in, I would say in most organization, it wouldn't be able to get that level of volatility, and, and commitment for funding. So then we again have to try and sort of harmonize it down to an acceptable level And this is how through iterative processes, we were able to identify an optimal funding level, which met risk versus, sort of what we can afford.
One of the really sort of, interesting, map that became a great popular as a communication tool was this heat map that was developed, which showed us the, journey of every building to various, funding scenarios and how quickly they will, they may or may not deteriorate. So that was a very powerful way of communicating a message to sort of finance and other stakeholders.
We're gonna mention in twenty three, we recently sort of, again, or sort of make sure that there's a bit more, and we have now started looking what level of funding might be needed to at least, align and deliver a service of eighty percent of our ambition as, as measured against, like, gross file, floor area or in terms of replacement value. Now, this helps infrastructure as our branch to really show what we are delivering and how we align our objectives with the broader KPIs of for university as a business, which is there to try and sort of have, least amount of, maximum amount of business continuity, least amount of for research, ensure a really good student and staff experience amongst other sort of broader KPI So it it starts really helping us as a tool to communicate and demonstrate how we are performing.
So with that, really, if you look back, to the list that we were trying to ascertain of what we wanted to achieve, I, I, I would like to probably say that we have ticked off almost all the boxes and the boxes keep getting added. But at a high level, we did achieve least developing a dynamic asset investment plan, which was really, easily able to be tuned for various funding scenarios so that was a a really good outcome for us. We sort of also were able to communicate this to senior leadership and, have a broad stakeholder, engagement from everyone in the, in the business.
Who, and we took us time, but it was a really good sort of experience to take them through this journey, understand where they come from in terms of business pressures, and how infrastructure branch is able to respond in, in those.
We also sort of, looked at how we can improve further and, and where we can go from here. So This is where it's a quick snapshot again of where we started off with just two pilot buildings. We went through multiple iterations, including through the pandemic and now where we are sitting at the moment is the third generation model.
Some of the key lessons I would like to share are, it was a myth for us, but we did, take our time trying to chase, a so called perfect data set and then, and then realize there is no such thing really. So as Renuka pointed in, in the, in the journey of incremental steps.
We sort of started. We had to make a start, and then we were able to quickly leap for a couple of steps But if you never start, if you keep waiting to collect data, you might lose opportunities, of, of improved planning, right, from the get go. We also realize it's not a stepped approach. It is a continuous journey.
And every time we run and have a iteration done, we we we absolutely benefit from the outcomes, but when we come across, okay, how better to improve it further, it has become a really popular tool amongst all leadership to, to showcase this. So this is a really good outcome for us. And what last thing I would like to say is for us also we realized telling the whole story both good and bad, with equal sort of metrics was really important because that itself gives a lot more confidence, to senior management and the decision makers in, in the tool. And using it for embedding, into a day to day decision making matrix.
So for really looking ahead, the adventure of this journey continues because as you may, some of you might have heard last month, it was announced that AI university may potentially merge with one of our counterparts, the University of South Australia, and if this is subject to parliamentary approval, as you probably appreciate merger between universities is quite rare, but we feel that this journey that we have undertaken and the tools that we have developed would really help us, improve our sort of planning activities of water combined state might look like. We are also embarking and deciding of how best to go about the next level of granularity of modeling which might go down to really equipment level, sort of asset deterioration, right down to pumps, chillers, motors, individual pieces of equipment in a building, and we might start off with high and medium priority buildings.
So that's where we are at the moment, and our journey continues And with that, I would really like to thank you for your time today, and I would like to hand it back to Brad.
Well, that that was terrific. Thanks a lot, Vikram, and, and Renuka for, for that specific presentation. Just, if anyone, still has questions, we have a few come through, and we'll, and we'll ask Deepgram and relocate, but, just make sure you add your questions through the icons at the bottom of the, at the bottom of your screen.
Vikram, just given your, briefly what you just said there about the merger between or the potential merger between Australia of South Australia and, and your University of Adelaide. I think there would be many councils and, people that are attending this webinar probably from up around Queensland that you would be, do well to reach out to. They've all gone through that experience in the last five to ten years merging council. Some have even merged and split up again. So, but they, it's an interesting exercise going through that process and and, and sort of merging them through processes together. So, so, thank you very much to both you and Renuka the presentation.
We do have a few questions here.
I'll start off with It's a question here from Nathan. How was your GRC determined for the three hundred plus buildings for the University of Adelaide?
GRC or I imagine being the, gross replacement cost.
So we undertake a sort of three yearly annual cycle through, external assessors to really come and evaluate our entire portfolio that's part of, the finance department manages that and they undertake that activity across every building. So it's, yeah, it's it's to external assess. Us.
Got another question here. How confident are you of your model outputs And how did you go about calibrating the models?
So that that's an interesting question because to a at the at the beginning of this modeling exercise, I would say at generation one, we did undertake random, validation exercises where the out what was being sort of communicated in terms of output at a building level or at an element level in terms of when an asset treatment is required We then went on to probe that further, especially with internal experts as well as with consultants to develop it into a project and and through, twelve of twenty four month cycle when we've actually delivered it, we went back and saw, alright, how much of a gap is there between what the model estimating versus what the real cost that we delivered at.
And it took a bit of calibration. It took a bit of, sort of going around in terms of degradation, as well as, intervention levels. But through these random, checkpoints, we were able to now improve our confidence in the in the model. So you have initially a bit of calibration with how, actual cold face validation might be needed.
Just just quickly to add on to that.
You spoke a bit about your data collection strategy and the work that you did at the start of the exercise developing that data collection strategy.
Have you, over time, gone back and adjusted that data collection strategy as a part of, you know, to feed into some of the calibration of the model.
Yes. So every year when we, over the last sort of five years when we have undertaken a an update upgrade to the model, we have come up with, validation of our input data as well. But, well, it it has become much easier now that we have processed it in place. So over twelve months, we collect up to date data, and then we trigger a model sort of update.
The initial exercise where we didn't know what all is required and how to even go about that itself to cost a year to really get all our act together.
Yeah. And I said, like, just from my personal experience, you find that, That exercise is very personal to the organization.
You can get you could start from from templates and you can start from information, but it's what what is the the decision makers, what type of information are they demanding from you, and and, what type of information, you know, what is unique about or university or your port or your council, that makes a huge difference. Although, there's commonality between them all, but sometimes the outcomes different.
So I want to stop talking and I'll get an answer. I'll ask you another question.
You had some COVID nineteen pandemic impacted funding scenario analysis in one of your slides. I think the second or third last slide can you, elaborate on that and and how do the life cycle modeling help in that situation?
So I think as as many of you all would appreciate the entire tertiary education sector was right badly sort of hit because of the pandemic and have you had multiple external pressures, in terms of student numbers, research funding cuts, education funding cuts. So as a as a as a business, we were no different to many of appears where I feel we were in a much better position as infrastructure to deal with that is the tools that we have loved, gave us, an opportunity to now be on the front foot and actually pre assess and understand if we were sort of if if our CFO and the finance division have to embark on funding cuts across the launches.
What's next able level at. And this is where we were able to model short term cuts in part of those on sort of medium to long term asset deterioration and then propose that this is the level of funding that we might sort of that might be acceptable to everyone as a business with these measures degradation because a failure if we have massive cuts, yes, those, impacts may not have been felt in the next year or two, but that sort of backlog effect then is very difficult school sort of get rid of and the impacts are then starting to default in five seventy eight. So that ability to actually demonstrate that and negotiate, give us, you're good to be on the twenty fourth of of negotiating internal funding and so It's alright.
Questions are coming fast and real quick here. That's why I'll fire a few more through.
How do you how do you plan to execute your different generation, different generation revisions? And what he's planned for the next one.
Alright. So for us really, it is all, one model, even though we have divided into generations, it's every generation is building upon the previous ones. Ultimately, we still have just one combination.
In terms of forward looking, we are looking to see, how we can improve, the modeling for high and medium buildings, which make up for about eighty five percent of overall massive, value in terms of the number of buildings They are a more manageable size of regards to the buildings.
So, yeah, like I said, we are now thinking of going down to the equipment level rather than just till inventory.
Yeah. Excellent. There's another question on that in a second. There's a couple of questions here of people saying, can we, effectively, can we pick your brain and come and, talk to you about the communicate, guidelines and the norms?
And and I'll let you answer if you're have some conversations or we can we can answer these questions. Some of these questions are because. There is a question here about I think it relates to your last answer. How did you determine what level of componentization to go to?
Twenty nine component would be a lot of information to keep up. And I think, you know, from our point of view, that is the twenty nine components is a lot. There's you know, and it comes down to behavior.
What is what we were talking about before? What is what are you trying to achieve? What are you trying to report on? What is the outcomes that you're looking for? Really drives the amount of components you're after please. And to that, we'll we'll go ahead and describe that as well. That's the that's your thought.
Now, that that that is a good question because again, when we were thinking of doing that, it was quite daunting for us, however, managed.
But in terms of if you look at a building, some of the components deal with the superstructure of the buildings Some of them deal with facade. All of them have a lifespan a lot greater than typically five or ten year renewal. So in terms of we we when you compare lifespans in conjunction with the elements, it is more manageable and then the more frequently used services like full full finishes, all the old mechanical, electrical, hydraulic, those building services that's where we we start paying more attention to. But in terms of the total modeling, it's to do it at the twenty nine elements, although your re renewal and replacement cycles for those will be a lot longer than than within a twenty five year cycle.
Yep. Yeah. Okay. There is a couple more questions there, but we're about five minutes over at the moment. So I will I will call it to a halt there.
Thank you very much, Renuka, and and Vikram for that excellent presentation.
I wanna thank everyone, for for coming along.
You can still pop any questions in, in the bottom One of the questions was about, do we get the presentation? Yes. You will get, the presentation emailed out to you if you're on the list. If you attended today, or if you were on the list. So, great. Thanks a lot everyone. And thank you to Renuka and Vikram for an excellent, webinar.