Management in Germany is booming. Whether with lofty job titles like Facility and Community Management or more cumbersome ones like Non-Profit Manager (volunteer), we’ve grown accustomed to orienting our professional vocabulary more and more internationally as global players. This trend also extends to the infrastructure sector. My professional passion lies in management consulting within the technical field. As a company founder, consultant, and coach, I help create efficient and dynamic structures for operators of technical facilities and infrastructure. This is where management meets infrastructure, forming the term “infrastructure management,” which often leads to confusion and even misunderstandings. The term is frequently not grasped in its full scope. By merging these two inherently vague words, we obscure the fact that infrastructure management is actually a specific, hands-on responsibility that presents considerable challenges for those in charge.
To unpack this term, let’s start by examining the words individually. Infrastructure refers to physical structures such as energy, water, and communication networks, as well as transportation routes and structures. It is characterized by high investment and maintenance costs, immobility, long lifespans, and often state regulation. Here, management is to be understood functionally and comprehensively, in the sense of business leadership. This is not about risk or accounts payable management but rather all the tasks of professional business administration.
When we combine “infrastructure” and “management” correctly, the result is responsibility for infrastructure as a philosophy that spans its entire lifecycle. This means it covers everything from defining needs to dismantling, and it includes all relevant roles and stakeholders, such as users, investors, municipalities, authorities, operators, engineering firms, construction companies, and tradespeople. This understanding is distinctly different from the mistaken interpretation of “management of infrastructure.” It is not infrastructure itself that requires leadership; rather, it is the responsible handling of infrastructure that demands a sophisticated management approach to ensure its longevity and efficiency.
In the English-speaking world, this concept is often referred to as “Asset Management” – an established term there. In the UK, for example, “infrastructure” or “asset experts” from all industries – whether airport managers, power plant operators, or water and rail network managers – come together to discuss methods for professionalizing their business.
Why Is Infrastructure Management Needed?
The defining features of infrastructure – high investment and maintenance costs, immobility, and long lifespans – require extensive planning, often state regulation, and substantial expertise. Poor decisions in investment or maintenance can only be corrected with significant additional costs. Infrastructure management is thus a complex, specialized field that calls for particular methods.
Decision-making processes play a central role in infrastructure management. Decisions are ultimately based on logic and an underlying value framework, which reflects the requirements of various stakeholders (or “coalition members” in English, “stakeholders”). In infrastructure projects, however, many stakeholders, each with their own values and interests, often gather around the same table, making decision-making even more challenging. The infrastructure company must ensure these interests are considered in all decisions, whether it’s the planning of infrastructure by an engineering firm or its maintenance by a technician.
This diversity of interests often leads to conflict, which the infrastructure company finds difficult to resolve. On the one hand, they must gather, evaluate, and integrate the values of all stakeholders into operational decisions and instruments in a structured process. On the other hand, they must sustain this balancing act throughout the entire lifecycle of the infrastructure, or “asset.” Fortunately, a comprehensive management approach, known as “Value-Based Asset Management,” exists to achieve precisely this goal in the infrastructure sector.
Value-Based Asset Management: Purely Financial?
The English term here may bring about misleading associations. “Value” is often thought of purely in monetary terms, but this is too narrow a view, especially when there are multiple stakeholders, not just investors, as is certainly the case in infrastructure. The value framework mentioned above is systematically derived from the various needs and values of stakeholders, structured, and weighted. I often refer to the four “Ks” – customer, cash, colleagues, and cosmos. These elements create friction among stakeholders, whose differing requirements often lead to conflicts of interest.
These challenges can be solved by consistently and comprehensively applying the methods of Value-Based Asset Management. The value framework must be systematically integrated into each business decision across asset owners, asset managers, and asset service providers. This leads to transparent, targeted actions by motivated decision-makers and operational staff acting in the best interests of the company. Infrastructure management means identifying the true needs of infrastructure, protecting the environment, and ensuring adequate quality at optimal costs. As a consultant, I have been supporting infrastructure owners and operators in these issues since 2011 with the goal of improving operational processes and structures. That’s why my company is called Meliorate (meaning “to improve or enhance”) – naturally an English term, as what else would it be?
Author: Lars Overdiek