Chapter 5 Summary
Resource Allocation
This chapter of the guide presents a general resource allocation process that can be applied to operations, maintenance, and renewal activities for a range of assets.
What’s Important
Organizations often lack the funding, staff, or other resources to achieve all their goals and objectives and need to make hard decisions about how to divide resources while considering competing needs. In the context of asset management, resource allocation is the process of assigning scarce resources such as funding, staff, and equipment to investments in transportation assets.
How the Guide Can Help
A systematic and repeatable resource allocation process helps an organization better determine how to best utilize any scarce resource, be it money, staff time, contractor capacity, equipment, or anything else that an organization requires for its assets. This guide describes an idealized allocation process to help illustrate key process steps and decisions an agency must make to improve its overall business process. It also addresses a range of issues and processes related to resource allocation, including:
- Consideration of Risk. Guidance for incorporating results of the risk management process described in Chapter 2 in resource allocation.
- Cross Asset Resource Allocation. Methods and guidance for maximizing performance and efficiency considering multiple asset types and investment objectives.
- Financial Planning. Development of a TAM financial plan and relationship of financial planning to resource allocation.
- Work Planning and Delivery . Alternative approaches for delivery of TAM maintenance activities and capital projects, implications of different delivery methods on resource allocation, and discussion of considerations in selecting the right delivery approach.
- Asset Valuation–Calculation and use of asset value as an important piece of financial reporting to communicate what an agency owns and maintains in order to support investment decisions.
Spotlight on
Cross-Asset Allocation
Prioritizing investments across asset classes and investment categories is an area of particular interest in TAM. However cross-asset resource allocation is complicated by several key challenges. These include reconciling competing objectives that cannot be easily compared, data limitations, and uncertainty concerning future conditions. Addressing these challenges requires adopting a performance-based approach that leverages an agency’s data.
One such performance-based approach is Multiple Objective Decision Analysis (MODA). To implement MODA an agency must systematically define its investment objectives, and determine how to quantify these through a set of performance measures. This information can then be used to calculate the overall utility and determine the relative priority of each candidate investment. The basic benefit of this approach is that it provides a structure for prioritizing investments outside the scope of any one management system, such as projects combining pavement, bridge and safety improvements. It also provides a means to compare asset management investments with other investments to improve mobility and achieve other objectives outside the scope of a typical asset management system.