2.4 Asset divergence analysis
An asset divergence analysis can be undertaken to determine if the existing asset portfolio is meeting program delivery requirements. In undertaking an asset divergence analysis, entities determine whether the existing asset portfolio is suitable for optimal delivery of the program delivery requirements that the assets are intended to support. The activities that would usually be undertaken in the analysis are:
- asset performance indicators - determine if the existing asset portfolio meets program delivery requirements;
- asset risk assessment - monitor risk exposure to ensure changing circumstances do not alter risk strategies and priorities;
- current level of services - identify the current level of service being delivered by the existing asset portfolio; and
- optimal level of services - ascertain the required level of service to meet the program delivery requirements.
An asset divergence analysis would be supported by documentation which identifies the following:
- current level of services - what current level of service is being delivered by the entity's existing asset portfolio;
- capital investment and funding - what capital investment is required to optimise the asset portfolio, and how this expenditure is to be funded; and
- asset disposals - what underperforming or surplus assets were highlighted through the asset performance indicators?
The results of the asset divergence analysis are then able to be used to inform preparation of an asset management strategy to reflect the asset mix necessary for the entity's program delivery requirements.
Documentation of an asset management strategy
An entity can use the outcomes of its asset divergence analysis and incorporate them into an asset management strategy to reflect the strategic goals of its asset portfolio. The strategic goals may comprise a number of plans that detail how the entity will use its assets in an efficient and effective manner over the life-cycle of the assets to support its program delivery. Part 3 of this Guide provides details on how to document an asset management strategy.