Integrating Effective Transportation Performance, Risk, and Asset Management Practices (2022)

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18 Integrating performance, risk, and asset management is a change management process and requires a deliberate and knowledgeable approach to be handled eectively. is section illustrates how to achieve the value-add of integrated management from the rst of the ve key areas; however, it is also intentionally the rst of the key areas in this guidance. is section establishes the overall approach framework that will either facilitate the potential positive impact of the other key areas or make them signicantly harder to achieve. As agencies focus on their approach to integration, they will provide and then innovate the discussions, processes, and tools needed to integrate performance, risk, and asset management. While agencies may vary in organizational structure, funding mechanisms and budgets, data governance structures, policy and political limitations, public obligations, and more, all agencies should be able to perform the processes listed in Figure 4. As an integration approach is identied and executed, it may need to be altered over time to adjust to new opportunities that present themselves in a continuous improvement cycle. APPROACHES TO INTEGRATION Figure 4. Integration change management process.

Approaches to Integration 19   Champions Successful and durable change in an organization requires identifying and equipping cham- pions. These executives or middle managers spearhead integration efforts and shepherd them as they take root—often over years—and act as central figures in the agency’s evolution. Specific actions for champions include the following: • Champions build relationships with other managers whose purview includes key elements of performance, risk, and asset management. Champions have walk-in privileges with the people who own bridge and pavement inventories, geographic information systems (GIS), information technology (IT) infrastructure, performance dashboards, and reporting. They can invite them to meetings and make sure that they attend and contribute. • Champions facilitate the documentation of current practices and the development of a critical path to improvement. Champions have the authority to secure staff or consultant time to develop working group rosters, agendas, minutes, and action items. They either are or have access to skilled meeting facilitators who can secure buy-in from multidisciplinary partici- pants while making everyone feel heard, valued, and supported. • Champions secure financial resources for change in the budgeting process and executive- level endorsement for the process and its products. • Champions coordinate with peer agencies and obtain assistance from FHWA, TRB, AASHTO, and other agencies who can support this change. • Champions follow through with change, documenting their work and ensuring that, if they leave the organization, there is a will and capability to hand off their role to a successor. • Champions are the voice of the “Why?” for process integration, and they establish cultural changes that facilitate the “How?” within the agency, which supports long-term integration at all levels. The Critical Path Each DOT integrating its management practice will need to define its own critical path, including goals, strategies, and actions (strategies are things a DOT “should be doing” to achieve its goals—whether or not they are currently being done—while actions are concrete initiatives for the DOT that may support more than one strategy). Following are examples of strategies: • Ensure that the integration of performance, risk, and asset management is a priority in an agency’s cyclical strategic plans, if any exist. • Establish that performance, risk, and asset management are an integrated effort. • Maintain a unified geographic reference system for all assets. • Maintain a comprehensive maintenance management system and business processes. • Have mobile access for all data that require it. Examples of actions could include the following: • Document all current business practices (or standard operating procedures) for performance, risk, and asset management. • Select and implement a pavement management data system to centralize inspection data, model future condition, select life-cycle treatment to minimize costs, and facilitate reporting and forecasting under both federal and state performance metrics. • Model bridge condition at the element level to consider external threats; tie bridge investment to system performance when applicable. • Conduct gap analysis on specific performance measures to ensure organizational efficiencies are occurring within the agency.

20 Integrating Effective Transportation Performance, Risk, and Asset Management Practices Successful Approaches and Practices Agencies that have successfully integrated performance, risk, and asset management have often done so through methods such as obtaining local and regional input, maintaining a risk register, using data dashboards and visualization, and integrating data and software resources. Local and Regional Input. Local agencies, metropolitan planning organizations, and other owners and operators can offer insight into unique regional and historical risks. Incor- porating public input into the working process is critical in capturing the user experience and expectations, and efforts to align system performance with that feedback will improve the value and applicability of that feedback. For example, the Tri-County Metropolitan Transportation District of Oregon (TriMet) uses a regular survey collection process to identify and prioritize risks related to asset management, performance, and maintenance, while other agencies, such as Caltrans and the Vermont Agency of Transportation (VTrans), convene regular meetings to share information. Some are developing and deploying public-facing online tools, such as UDOT’s Transportation Performance Management dashboard, that compile and share infor- mation about recent or historical progress in meeting stated performance, asset management, or risk metrics. These tools enable a continuous discussion and opportunity for feedback and further detail with links to necessary plans, documents, and agency goals. Risk Register. Multiple transportation agencies have developed a risk register to identify and rank potential risks and uncertainties on the basis of institutional and industry knowledge. Others, such as Caltrans, pushed a step further and prioritized their risk register results. The process of developing a risk register allows agencies an opportunity to consider their risks, consider the probability and the consequences, and identify the areas where they need rapid response mitigation plans. Agencies are also developing risk and resilience metrics that will allow for easier integration with performance goals. Data Dashboards and Visualization. Interactive dashboards dynamically visualize asset and performance information based on current and projected data. These same dashboards and visualizations can communicate other financial, human resources, and customer-focused metrics. They allow key agency executives, stakeholders, and decision-makers to quickly under- stand the state of the agency’s assets and overall performance as well as the potential impacts of various investment scenarios, uncertainties related to data and technology, and external threats such as vehicle strikes, climate change, and natural disasters. Data and Software Resource Integration. Centralized data governance systems lead to extensive efficiencies related to data collection, management, and access. Because data are critical to many regular operations within a DOT, well-designed data governance systems may lead to reduced data collection and processing needs as duplication of efforts is reduced as well as to improved potential for innovative applications as it becomes easier for staff to access quality, up-to-date data. Sensitivity Analysis. Asset management systems that make predictions about performance do so without certainty. Some agencies seek to communicate this uncertainty through a range instead of a single value. In some select cases, an agency will experiment with the underlying assumptions of the model (e.g., cost of materials, cost of labor, organizational bandwidth as measured in projects tackled per year) to identify the sensitivity of performance forecasts to each assumption. Armed with a better understanding of the model, the agency can then make informed decisions about the parameters that drive its forecasts. Successful Integration Methods ✓   Local and regional input ✓   Risk register ✓   Data dashboards and visualization ✓   Data and software resource integration ✓  Sensitivity analysis Who Can Be Your Partners In Integrating Management? Local government. Cities, towns, and counties own many transportation assets and may be collaborators or testing grounds for performance and asset management approaches. MPOs and regions. MPOs are required to adopt the same performance measures as DOTs. They perform investment prioritization for Transportation Improvement Programs. Regional officials may have a strong grasp on local risk. Universities and researchers. Federal funds and pooled funds are available for research. Academic experimentation, trials, pilots, and innovative thinking may be useful tools for integrating agency management practice. Consultants. The right consultants have a working knowledge of best practices from other states, regions, and even other countries. They can be retained on an ongoing basis for technical assistance.

Approaches to Integration 21   Management Frameworks Management frameworks, such as business process mapping, integrated investment plan- ning, holistic training, integration in project selection, and enterprise risk management, have been documented as effective in literature and case studies. Business Process Mapping. As identified through multiple case studies with state agencies, taking an active approach is critical to initiating the integration process. Through business pro- cess mapping and the activation of a dedicated integration working group, agencies can identify where improved cooperation, collaboration, and coordination are needed to connect the dots between existing practices and their vision for integration. This can be done through identifica- tion of critical changes in allocations, organizational structure, documentation, and more and through considering the practical implications of these changes and how they can be achieved. In this way, leadership can get ahead of many of the challenges and complications that come with integration, thereby making way for a smoother transition. Integrated Investment Planning. By integrating investment planning processes, agencies can make great strides in achieving greater integration and cooperation over the course of each investment cycle. This can be achieved through intentionally designed documentation structures as well as the identification of data-driven investment goals and key performance indicators, which bring focus to the relationships between customer satisfaction, asset condition, and resilience. Centering performance, risk, and asset considerations in planning documents and definitions can set the stage for each budget cycle, inviting staff at all levels to actively engage with these values and utilize them in their investment decisions in a coordinated and consistent manner. Holistic Training Programs. Though integration will be initiated at the top levels of an agency, it will be activated and maintained by middle management and rank-and-file staff members. For this reason, the more the practices of integrating performance, risk, and asset management are embedded within the processes of the agency, the greater the success the agency will find in the long term. Designing staff development and training programs that embody the practical elements of the agency’s vision for integration can influence day-to-day operations and culture. This includes one-time trainings related to the evolution of the agency during the integration process, as well as—perhaps even more importantly—regular trainings such as on-boarding and staff development activities, which will continue beyond the early stages of integration, engage and motivate staff toward long-term integration goals, and provide con- tinuous education on how these processes work together. Integration in Project Selection. Agencies within transportation as well as those in other industries, such as municipal stormwater management, have most commonly integrated perfor- mance and risk management in the project selection stage. Insights related to identified perfor- mance metrics as well as identified risks and uncertainties can influence project prioritization on a local, regional, or statewide level. This can lead to more optimized spending that makes effective use of limited funds to maintain critical assets and improve performance and to a more resilient process or asset. Enterprise Risk Management. A holistic approach to risk management should include more than just risks directly related to assets. Additional considerations should include system safety metrics, external factors, financial uncertainties, information security, business risks, and program- and project-level risks. Such factors can indirectly affect assets and performance by influencing maintenance budgets, customer satisfaction or perception, project scheduling, and so forth. Managing Risk Across the Enterprise: A Guidebook for State Departments of Trans­ portation, offers an in-depth review of enterprise risk management for additional information (Proctor et al. 2016). Successful Management Frameworks ✓   Business process mapping ✓   Integrated investment planning ✓   Holistic training programs ✓   Integration in project selection ✓   Enterprise risk management

22 Integrating Effective Transportation Performance, Risk, and Asset Management Practices Integration Maturity: Approaches to Integration To assess an agency’s level of maturity in the key topic of approaches to integration, the benchmarks below may be considered. 0 1 2 3 4 Level Preintegration No actions have been taken to pursue integration within the agency. Management practices are largely siloed, with no active interest on the part of agency executives or midlevel management to pursue integration. Level Level Level Level Initial The agency has expressed interest in exploring potential integration of performance, risk, and asset management practices. Conversations have begun, and executive leadership has recognized the potential value in integration. No practical changes have been made to the operations of the agency, and no formal documentation of practices has begun. Defined The agency has begun to identify practical steps to move toward an integrated management program by developing initial documentation, pursuing a structured roadmap for initiating small-scale integration, and establishing metrics to monitor integration. The agency has formally begun the evolution, though day-to-day operations are largely unaffected, apart from initial pilot efforts, and any outcomes or process changes are highly tentative. Expandable, Repeatable Integration has begun to move from theory to actual practice. Agency processes are being transformed according to the defined integration roadmap and are becoming systematic and repeatable. The effort is beginning to produce some tangible outcomes, though processes are still changing rapidly as integration expands through departments and impacts day-to-day operations throughout the agency. At this point, integration has major implications for staffing and resource needs. This stage may last for an extended period as integration permeates the agency at various levels and departments. Managed Performance, risk, and asset management have all been made more efficient and effective across working groups and departments through practical steps taken to establish integration as the official operation standard; however, more integration is necessary. Integration has been performed across all appropriate departments within the agency, and processes are well documented and are performing effectively, with regular significant outcomes at various levels. The agency may seek certification under ISO 55000 or similar programs to cement its practices, though this is not necessary. Level 5 Optimizing Integrated performance, risk, and asset management is fully deployed throughout the agency and is highly effective and consistent. Outcomes of integration are obvious and well established. Integration of the three management areas is official policy and standard operating procedure, and the agency is committed to continuous improvement.

Approaches to Integration 23   Road Investment Strategy (Highways England) The primary responsibility of the government-owned company Highways England is to provide a safe and serviceable network for its road users and stakeholders. The agency constructs, renews, maintains, and operates the System Road Network (SRN) infrastructure, which encompasses more than 20,000 miles of roads and an extensive portfolio of ancillary roadside assets such as bridges, structures, drainage, geotechnical assets, lighting, vehicle restraint systems, technology, signage, and road markings. The SRN carries more than 4 million vehicle journeys every day, moving more freight than all other transportation modes put together and acting as the backbone of the national economy. Under a recently evolved asset management framework, Highways England has been able to successfully integrate elements of performance and risk management into its asset management practices. This evolution has involved the development of 5-year road investment strategies ( IS) as well as the agency’s strategic business plan (S P), which outlines the practical activities and strategic outcomes that will be involved in delivering the RIS. Advanced key performance indicators related to asset condition, operational and safety performance, and customer satisfaction have enabled the agency to qualitatively link performance metrics to asset maintenance and capital investment project identification and prioritization. Additionally, advances in uncertainty modeling, documentation of strategic planning, and longer-term investment planning have led to increased understanding of enterprise risks and more risk-sensitive programming. The broad approach of Highways England has activated staff at all levels of the agency to participate in the more holistic, integrated practices captured within its IS and S P. As Highways England continues to work toward developing a more integrated and progressive approach to performance, risk, and asset management, it has noted the importance of buy-in from the e ecutive level. ecause structural change is initiated from the top, it is important that leadership identify integrated management practices as a priority to help ensure success at all levels. This feeds into a cultural change within an agency and allows for the alignment of practices to a new set of goals. Such goals include cooperation and collaboration, where practices are able and encouraged to breach the traditional silos that are commonly in place in government agencies. This leads to greater efficiencies, newfound synergies, and more effective day-to-day performance. Highways England has also found that longer-term investment periods aid in finding efficiencies and effective solutions; however, it is important to maintain complete records of spending and budgets to support such decision-making. Additionally, moving toward in-sourcing technical activities related to asset management can be challenging and may take time; however, it may provide long-term benefits through expanded agency competencies and experience. Regarding asset data, Highways England notes that it is important to take a sophisticated approach to using available data and modeling for uncertainties and unknowns, while constantly striving toward improved data. To promote and enable a more inclusive and integrated organizational structure, TriMet indentified processes and objectives in its 5-year business plan that would develop a more collaborative agency culture. This integrated working culture also included a new vision statement, and the organization was restructured to initiate this culture shift. These actions removed potential roadblocks and communicated collaboration in an integrated working environment. Integration in Practice

24 Integrating Effective Transportation Performance, Risk, and Asset Management Practices Thinking About Risk Globally (MnDOT) On the basis of its understanding of transportation as a means to other ends, and not an end itself, MnDOT launched the Minnesota GO visioning process. This has allowed the department to better align its transportation system with what residents expect for their quality of natural environment, economy, and life. MnDOT’s approach to developing the Transportation Asset Management Plan as part of a family of investment plans appears to be the best example of complete integration of performance, risk, and asset management. MnDOT has been incorporating risk into the agency’s functional areas, including capital and highway operations planning and business planning, aided by its understanding of the value of accounting for and managing risk. The Minnesota 20-year State Highway Investment Plan, published in 2013, fully incorporated risk assessment and played a prominent role during its development. MnDOT also produced an Enterprise Risk Management Framework and Guidance document in 2013 that “establishes the standards, processes and accountability structure used to identify, assess, prioritize and manage key risk exposures across the agency.” Risk also factors into the most recent statewide Highway Systems Operation Plan (HSOP), where it influences trade-off discussions and funding prioritization. It can be challenging to consider cross-asset risks and the agencywide implications of high-level risks such as operational, public health, or broader economic impacts. However, MnDOT is working to deploy such holistic considerations in its risk management processes. Performance targets may be thought of as an “acceptable” level of risk or within the agency’s risk tolerance. As part of the development of MnDOT’s10-year plan, its central office has been asking districts about risks they are not able to mitigate, and rebalancing funding in response. MnDOT’s web-based performance dashboard communicates risks to meeting performance targets. With this information, staff can tie risk back to MnDOT’s decision-making process. Right now, MnDOT often looks at risk while considering cross-asset trade-off levels (e.g., what level of performance will MnDOT see in various assets informed by risk-informed targets).