What Is Asset Management?

Asset management is a business process and a decision-making framework that covers an extended time horizon, draws from economics as well as engineering, and considers a broad range of assets. The asset management approach incorporates the economic assessment of trade-offs among alternative investment options and uses this information to help make cost-effective investment decisions.

Asset management has come of age because of

• changes in the transportation environment,
• changes in public expectations, and
• extraordinary advances in technology.

Today's transportation environment is characterized by high user demand, stretched budgets, declining staff resources, and a transportation system that is showing the signs of age.

The public has made significant investments in the construction, maintenance, and operation of the Nation's highway system and expects that Federal, State, and local government agencies will be responsible stewards of those investments. Those agencies concur, and they recognize that the public will hold them accountable.

The advent of increasingly powerful computer systems has made the practice of asset management possible. These computer systems not only put sophisticated analytical tools at a highway staff's fingertips, but also allow agency officials to perform "what if" analyses that in turn facilitate discussions with other stakeholders.

For a more in-depth look at asset management, see the Asset Management Overview.