Annual Report2014

The Institute of Asset Management

Who are we?

Our Vision To be recognised as the leading, international, professional body for asset management

The Institute of Asset Management (the IAM)/ the Institute is a not-for-profit, professional body. We are owned and controlled by our Members and committed to remaining independent from commercial and trade associations. We exist to advance the discipline of Asset Management, not only for people and organisations involved in the acquisition, operation and care of physical assets but also for the benefit of the general public.

Our Enduring Objectives are: • Collect / Collate / Disseminate existing knowledge and good practice • Generate and extend knowledge and good practices • Influence public policy and stakeholder expectations • Promote capability and excellence in asset owning organisations or their suppliers and structured schemes for recognising these achievements • Promote knowledge and competence of individuals and structured schemes for recognising these achievements • Deliver Member publications, engagement and networking opportunities and other valuable Member services • Raise profile and respect for the IAM and the profession • Collaborate with and support other bodies having similar objectives • Develop and maintain an appropriate and sustainable organisation

We welcome the support of both organisations and individuals who want to join us in developing this exciting discipline. By becoming a Member, you can demonstrate your support and show colleagues or clients and suppliers your commitment to the principles and practice of asset management for business benefit.

If you’re not already a member, why not join us now?

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Contents

04 An introduction by the President

05 Financial resultsand membership

07 Academic & Research Network

08 Corporate & Individual Journeys

09 2014 Awards

10 The Year Ahead

It seems scarcely believable that ISO55000 was only launched a year ago, given its penetration across different sectors and different regions. In my travels over the last 12 months, I have seen governments, regulators, asset owners, service providers and consultants using ISO55000 and developing their own specific ISO55000 guidelines to help realise better value from their assets.

Members of the IAM, of course, played a significant role in the development of ISO55000. In the last 12 months we have been updating our products and services that support the individual and corporate journeys to be consistent with these standards.The IAM qualifications have been updated to include the appropriate knowledge and understanding of the asset management system. The Self-Assessment Methodology (SAM) now includes ISO55000 and we have updated our Endorsed Assessor Scheme.

We have also published our guidelines on Asset Management Maturity & Excellence designed to help organisations develop their capabilities beyond just compliance with ISO55000.

There has been significant development of the Institute itself over the last 12 months, with the addition of several new staff members, but also in the establishment of the Chapter network. Chapters in Malaysia, Canada, USA and the Middle East are all making progress and the UK Chapter (consolidating the existing Branches) will be launched this summer.

Asset management has well and truly become a mainstream discipline and the IAM needs to continue to develop at a rapid pace in order to meet the increasing demand for knowledge and guidance. We have put in place a strategic plan for the next 3 years to address these challenges and the highlights of this are discussed in ‘The Year Ahead’ on page 10.

Richard Edwards

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An introduction by the President

‘Asset management has well and truly become a mainstream discipline and the IAM needs to continue to develop at a rapid pace in order to meet the increasing demand for knowledge and guidance’

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Financial ResultsOur aim is to keep the cost of membership to a minimum. Your subscriptions pay only for membership services, including Assets magazine. All our events, examinations, endorsement programmes, products (and most projects and publishing) are now priced to make a commercial margin to reinvest in knowledge activities – with significant discounts for members, of course – and to subsidise free products such as the Anatomy.

Our turnover is growing and so, naturally are creditors and debtors but very reasonably. Our venues now are bigger and, for the first time, require deposits a year in advance. This means there are still some transitional ‘one-off’ effects of growth. Stock costs have been constrained by new ‘print on demand’ arrangements.

Last year we budgeted prudently because we could not forecast the consequences of the membership restructuring. In practice, we are delighted that so many members have shown faith in us as the graph shows below.

This year’s welcome surplus will be helpful in cushioning us against the deliberate growth in office staff and significant IT investment during 2015-16.

The directors are pleased to report a clean audit

report. The opinion of the auditor (Dunkley’s) was that the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities, of the state of the Institute’s affairs as at 31 December 2014.

CONSOLIDATED BALANCE SHEETYear Ending 31 Dec 14 Year Ending 31 Dec 13

Notes £ £ £ £

Fixed Assets 73,802 31,882Current AssetsStocks 30,151 17,459Debtors a 91,961 65,396Cash at bank 445,206 331,080

567,318 413,935CreditorsAmounts falling due within 1 year b 204,173 157,550

TOTAL ASSETS LESS CURRENT LIABILITIES 436,947 288,267

RESERVESOpening Balance 288,267 266,240Net surplus / (deficit) for year 148,680 22,027Closing Balance 436,947 288,267

Notes to the Balance Sheet a. Debtors include: £35,171 trade debtors in Trading; £7,000 of 2014 membership fees paid late; £8,750 deposit paid on offices: £4,375 rent prepaid; £16,406 prepaid on 2016 annual conference; £20,259 VAT due back. b. Creditors include: £98,433 trade creditors; £8,009 PAYE & national insurance due to HMRC; £28,000 membership fees paid in advance; £69,731 accruals.

MembershipFollowing the membership restructuring, we shall track only paying members in future Annual Reports. (But you may like to know that the monthly Newsletter goes to over 18,000 people (May 2015) and is growing strongly.) Whether this will translate into membership growth is simply unknown, but we explicitly do not consider member numbers a success criterion.

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

2010 2011 2012 May 2012 Dec 2013 Mar 2013 Dec 2014 Apr

2,0001,8001,6001,4001,2001,000

800600400200

0

Linked in Affiliates

2011 2012 May 2012 Dec 2013 Mar 2013 Dec 2014 Dec

Paying Members Corporates (inc Patrons)

Paying Members include: Fellows, Members, Associates, Students.

Paying Members

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Dunkley’s have prepared the Balance Sheet and P&L summaries for Members because the best way to review our income and expenditure is through consolidated figures.

The Institute now has several wholly-owned trading companies: IAM Trading Ltd, IAM Learning Ltd and IAM Chapters Ltd to carry out our activities in the most convenient and tax-efficient manner. The Institute of Asset Management Ltd makes donations to fund the operations of subsidiary companies.

Although there has been strong growth in paying membership, this is also distorted by delays to renewals during membership restructuring (caused presumably by confusion or indecision). It remains to be seen what next year will bring. As our activity level rises we anticipate more people being interested enough to join, however, the new 12 month limit for Affiliate membership may mean more people leave at that point. We do not believe the true picture will be clear until late autumn 2015.

Our plans for Technical & Commercial activities mean that we expect a reasonable surplus from them. This will support the start-up costs of Chapters and the strengthening of back office resources planned by the Board. More importantly, we can also provide more technical authorship and other resources to foster knowledge output.

Notes to the Profit & Loss Account: c. Membership restructuring and new members joining. Included in Membership fees received is £183,906 paid by Patron members for future project work. d. Magazine costs reduced following membership restructuring, as predicted last year e. Commercial conference venue for first time and booking fee for 2016 f. PAS55 sales have reduced, as expected, owing to ISO55000 g. Increased supervision and contractor costs for both EA and ET h. New category to show products such as the Big Picture

CONSOLIDATED PROFIT AND LOSS ACCOUNTYear Ending31 Dec 14

Year Ending31 Dec 13

Not

es

£ £ £ £

MEMBERSHIPMembership fees received

c 542,600 315,979

Membership services (221,682) (14,400)

Assets (journal costs) d (62,742) (85,825)

258,176 215,754

EVENTS

Event income 374,125 237,839

Cost of events e (279,973) (173,339)

94,152 64,500

PUBLICATIONS

Sales income f 35,517 22,442

Cost of sales (45,972) (11,498)

(10,455) (10,944)

ENDORSED PROVIDER SCHEMES

Endorsed Assessors 12,045 55,062

Endorsed Trainers 53,092 60,960

g 65,137 116,022

PRODUCTS AND SERVICES

Income 64,219 0

Costs (14,044) 0

h 50,175 0

OVERHEADS & ADMINISTRATIONRent, office services and related costs (206,049) (279,409)

Web site and computer costs (38,879) (55,752)

Legal & professional fees (13,291) (2,677)

Net bank charges (5,776) (9,608)

Depreciation of website development (26,371) (38,733)

(290,366) (386,179)

SURPLUS FOR YEAR 148,680 22,027

PROJECTS

Projects income 18,250 46,487

Project costs (36,389) (45,501)

(18,139) 986

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Academic & Research Network

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The IAM Academic and Research Network (ARN) will celebrate its first birthday this June, and has so far been successful in bringing together an excellent group of academics and practitioners who are passionate to push the boundaries in asset management. The ARN aims to facilitate and promote engagement between the asset management academic and industrial communities, provide thought leadership and support education and research in asset management. Currently, the membership of the network stands at around 45 from universities and 80 from industry around the world. The ARN’s key objectives are: • To improve collaboration between industry and academia • Improve alignment between industry needs and academic research • Enhance the quality of mentoring and education to current and future asset management professionals • Influence funding agencies to provide more funding for asset management research • Support and enhance the IAM’s role in providing thought leadership

What have we achieved? The ARN has made good progress in addressing its objectives so far. In terms of research, we organised an industrial workshop in November, which helped identify five critical areas to focus on: (i) High Impact Low

Probability Events; (ii) Benefits of Asset Management; (iii) Innovative Maintenance using Built-in Technology; (iv) Data Management; and (v) Asset Degradation Modelling. In order to coordinate the research activities, working groups have been formed in each of these areas. The working groups will be presenting their initial outputs at the IAM Annual Conference in June 2015. The work has resulted in two proposal submissions to the UK Engineering and Physical Sciences Research Council (EPSRC), which if successful will bring funding for carrying out research. Fingers crossed!

On the education side of things, we undertook a short project examining the course contents of education programs in asset management in universities around the world. In particular, we compared various programs at graduate levels that are focused on areas related to asset management against the 39 subjects listed by the IAM Anatomy and the IAM Competences Framework and present recommendations for greater alignment between academic programs and industrial need.

The ARN members have also been active in supporting the IAM’s thought-leadership activities. For instance, a number of academic members are now involved in the Subject Specific Guidelines (SSG) projects providing key input to their development.

If you are not yet involved in the ARN, we will welcome your participation. For more information, contact us at ARN@theIAM.org

Ajith Kumar Parlikad Chair, IAM Academic and Research Network

Ajith Kumar Parlikad

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Corporate and Individual JourneysWe have turned our attention to supporting Corporate Members on their ‘Journey’. We particularly need to provide more material for those organisations just starting out - but we also need to find ways to support them as far as they wish to go towards excellence and maturity in asset management.

One of our success stories last year was ‘The Big Picture’. There has been nothing but enthusiasm for this product, whether as the free video on our website or as the wall posters available to buy. The supporting material has enabled many organisations to recognise their own position on this journey and, even more importantly, start conversations across ‘silos’ and get more traction amongst their colleagues for change.

A great deal of other work is in hand but less visible. This includes work within the IAM community, and also partnering with other Global Forum members, on understanding the characteristics and symptoms of maturity and excellence and how to improve towards those states.

The new SAM allows members to assess their organisations against ISO55001 as well as PAS55 and the 39 Subjects. We are working on several topics to express the value and benefits of asset management in qualitative and quantitative terms.

We shall continue to take the lead from our Patrons and Corporate Members to ensure that the work we do is valuable and relevant. This has been our approach now for 15 years or so!

The concept of the Individual Journey is crucial to a professional association and a great deal of effort is going into structuring professional development arrangements. We expect to ask all MIAM and FIAM members to commit to Continuing Professional Development and to have a personal PD Plan. The big step on the first part of this Journey is to join NxtGenPlus and commit to making and keeping to a PD Plan.

Both NxtGen and NxtGenPlus have been growing spectacularly under the energetic and inspiring leadership of Danielle Humphrey. She is still supporting these activities but has recently handed over the Chair.

An objective marker of knowledge and understanding is success in the IAM’s Certificate and Diploma examinations, with a thousand or so successful candidates now – all over the world. They are designed primarily as part of an integrated PD programme but the Certificate is also used to establish sufficient knowledge and understanding for Auditors (as specified by the Global Forum1). We have been improving the experience of those Associates applying for MIAM. This is also being backed up with more resource to assess applicants and we hope that Chapters will allow volunteers to become Membership Advisors to assist people locally and in their own language.

Endorsed Assessors The IAM appointed the first EAs in 2010 to give confidence to corporate members about the quality of services provided to them by third parties for assessment of conformity against PAS55. There is still no constraint on who issues a certificate of conformity for PAS55 (or ISO55001) and the IAM believes that assessments should be done by individuals with appropriate knowledge and experience of asset management. Following the publication of ISO55001, the GFMAM1 published a specification for ISO55001 auditors. This sets out the minimum knowledge and understanding for auditors to assess conformity to ISO55001. The IAM Endorsed Assessors can already cover gap analysis and certificate assessment against ISO55001 and, by 1st September 2015, all Endorsed Assessor auditors must be qualified with the IAM’s Certificate (or other recognised examination). At the end of April 2015, there were 47 Endorsed Assessor bodies based in Europe, Australasia and North and South America. Aled Williams, Manager of Endorsed Assessment

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We are also piloting the process for admitting members to Fellowship by application. The plan is to introduce this by the autumn. We do not expect large numbers but this brings to fruition the intended span of categories. This starts from interested Student through Associate, with development and experience achieving MIAM – and later culminating in FIAM, recognition of significant expertise and seniority.

1. GFMAM Competence Specification for an ISO55001 Asset Management System Assessor/Auditor - see www.theIAM.org/AuditorSpec

IAM NxtGen Award Winner 2014 Candidate: Paul Rohoman, City of Burlington, Ontario, Canada Paul was responsible for the development of lifecycle analysis and implementation of decision support software within the City of Burlington, which he tailored to the needs of the business. His pioneering work has meant that the City of Burlington now has a detailed needs profile for every asset class for the next 60 years. This analysis was the foundation for the approval of a funding increase to support the long term sustainable Financial Plan.

IAM Achievement Award Winner 2014 Candidate: Sodexo Lead: Keith Hamer The initiative was identified based on a comparison of market share between ‘best’ and ‘worst’ Sodexo FM businesses. Clients are engaged and realised benefits include: • Improved control of day to day activities and business efficiencies – 10% average improvement. • 40% reduction of risk related costs. • 100% compliance in regulatory activities; • Reduced failure rates - 20%.

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‘After two years of chairing the NxtGen committee I’ve decided to hand over the reins to John Green (as chair) and Oliver Parsons-Baker (as deputy chair). John and Oliver have both been active members of the committee for a number of years and have already made a great contribution to NxtGen through their development and delivery of the NxtGenPlus “Introduction to AM” workshop based around the AM Anatomy and organisation of a number of our Talk from the Top events. I have every confidence they will do a fantastic job in leading NxtGen.’ Danielle Humphrey

2014 awards

Individual Journey

The two key themes for the Individual Journey over the next few years

are: the development of structured professional development and a

move towards achieving Chartered Status. Our qualifications are now

well established and we have introduced clearer criteria and process

around Membership and Fellowship.

These now need to be embedded in an overall personal development

journey that starts with NxtGen+ and continues throughout our

members’ careers. Our qualifications and professional development

strategy will be completed by the end of 2015 and this will define the

professional development pathway in more detail and will set out our

plans for Chartership.

Chartership will involve a two-stage process. Firstly, the IAM will petition

to become a Chartered Body. This process will take around 2 years and

require us to demonstrate to the Privy Council that we are the

pre-eminent body in Asset Management and that we have the right

structure and governance processes in place. Secondly, a register of

Chartered Professionals will be developed which will allow us to award

the title of Chartered Asset Manager. Achieving this will be a significant

milestone in the professionalisation of the

discipline of Asset Management.

Corporate Journey

Our priority to support our

corporate members is to put

in place more guidance for

organisations at all stages of the

Asset Management Journey.

The Big Picture has provided the

basis for organizations to start

the discussion about the Asset

Management Journey and we will

be developing additional material to

help to communicate the benefits of this

journey.

We will continue to develop guidance on maturity

and we will be extending our Endorsed Assessor Scheme

to include assessment for the higher levels of maturity. We will

continue to develop the SSGs in the priority order set by our members.

For organizations early in the journey of Asset Management, we will be

developing an IAM handbook, which will contain guidance on where to

start, what to avoid and step by step guides.

Chapters & Branches

Chapters and Branches are the lifeblood of the IAM as they provide

the means for members to learn, network and contribute to the

Our 2015 – 2018 strategic plan sets out the priority activities that are necessary to respond to the demands being placed upon us. The full version of this plan can be found on the IAM website but here are the highlights.

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The Year Ahead

Role 1Policy

Development

Role 2Strategy

Development

Role 1Policy

Development

Role 2Strategy

Development

Role 3Asset Management

Planning

Role 4Implement Asset

Management Plans

Role 5Asset

ManagementCapability

Development

Role 6Risk Management

& PerformanceImprovement

Role 7Asset Knowledge

Management

Optimise thedelivery and

performance ofphysical assets

Student Next Gen Next Gen+

Member

Fellow

Chartered Member

Initial and Continuous Professional Development

Associate

10 11

development of the discipline. The

UK Chapter and Branches

are going from strength

to strength and we

hope to launch

even more

Branches soon.

Outside the UK,

we will continue

to support the

growing Chapters

and Branches in

Canada, USA, Malaysia

and the UAE. These provide

the opportunity for

engagement with different

cultures and approaches

which will enrich the IAM’s

products and services. The

Chapters also give us the

opportunity to collaborate with

other member societies in these

regions to provide greater value to

both their members and our members.

Events, Exams & Training

We are finalizing our events strategy, which will provide

the framework for both IAM events and for partnering with other

event providers. Events will form an important revenue stream for the

IAM to fund our knowledge development activities but we will apply

strict criteria to events that we ‘badge’. Chapters and Branches will

increasingly develop their own events to serve the local communities

they represent. We will continue to offer our exams around the world

and we are working with our Patrons and other potential partners to

provide the examination centres we need. Our Endorsed Training Scheme

is going from strength to strength and will continue to be the primary

source of the IAM recommended training. We are exploring the

opportunity for the IAM to run a number of short courses in addition to

this that will supplement the courses delivered by the Endorsed Trainers.

Developing the Institute

As our activities increase, and in particular to support the Chapters and

Branches, we will invest significantly in our IT systems to improve our

Members’ experience and integrate / automate many of our back office

activities. We will also continue to strengthen the management team

and Board and we are planning to introduce a Senate of senior advisors,

both to influence our own activities and also to advise government and

other key bodies on the benefits of Asset Management.

Engagement

As I described in the introduction to this annual report, Asset

Management has become a mainstream discipline. It is increasingly

important that we avoid the proliferation of different ‘versions’ of Asset

Management which could cause confusion and uncertainty amongst our

Members. We are therefore significantly increasing our engagement with

other professional bodies, trade associations and with the government.

Our President intends to engage directly with as many members as

possible over the next year, starting with visits to our Patrons.

Institute of Asset ManagementSt. Brandon’s House,29 Great George Street,Bristol, BS1 5QT United Kingdom

+44 (0) 8454 560 565office@theIAM.orgwww.theIAM.org

Registered Office: Woodlands Grange, Woodlands Lane, Bradley Stoke, Bristol, BS32 4JY

Design: Bob Design and Marketing www.meetbob.co.uk

The Institute of Asset Management