Value Creation Framework – Enabling Value Through

Asset Management

Antony Straubhaar1, Director Interchanges and Buildings, Asset Management Branch, Transport for New
South Wales

Abstract

Organisations can create or destroy value through the normal course of day-to-day operations and when making
decisions affecting their assets and services. The value may be tangible or intangible, financial or non-financial
and is expressed in a manner that is specific to the organisation’s context and objectives.

Having a standardised approach to articulating value enables asset management practitioners to communicate
more effectively with executives and decision-makers, substantiate project proposals and funding requests,
celebrate achievements, promote accountability, and demonstrate asset management maturity.

Transport for NSW has developed a framework for articulating value creation and embedded the practices into
our enterprise management systems. The value creation framework sets out the means of articulating value for the
organisation and is a foundational element of the asset management system.

Value creation encourages the pursuit of intelligent asset management and is supporting a shift in our culture and
capability towards a more outcome-oriented focus of planning, collaboration and decision making across the asset
lifecycle. This in turn contributes to a ‘whole of government’ perspective that breaks down barriers between teams
and returns our focus to being for the greater good of the public.

This paper discusses Transport for NSW’s approach and lessons learned in developing and implementing the
value creation framework, implementation considerations and its journey as it pursues continual improvement.

Keywords Value; Framework; Transport for NSW; Governance; Benefits; Lifecycle; Outcomes

1 Introduction
Transport for NSW (TfNSW) provides value to the public in the
form of safe, accessible and reliable transport services across heavy
rail, metro rail, light rail, road, maritime and active transport
modes. These services are dependent on the effective asset
management of a diverse and complex portfolio of network assets
with a value in excess of $211 billion.

Understanding the value being provided by the assets and the levers
that influence the outcome are both fundamental aspects of
TfNSW’s asset management practice. The Value Creation
Framework represents TfNSW’s approach to standardising the
lifecycle management of financial and non-financial value being
realised from its assets as a result of intelligent asset management.

The Value Creation Framework sets out the principles, processes

and governance for the lifecycle management of value being Figure 1: Network assets TfNSW 2022/23
realised from Transport for NSW’s assets. Annual Report

1Antony Straubhaar ()

Transport for NSW, Macquarie Park, Australia
e-mail: antony.straubhaar@transaport.nsw.gov.au

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2 The value of value creation

The value afforded by the Value Creation
Framework is that it enables TfNSW to:
• Support implementation of TfNSW’s
frameworks by bringing them together and
overlaying a value lens on their integrated
activities, and linking with the organisational
objectives (see right)
• Drive maturity in applying outcome-oriented
thinking, planning and execution
• Facilitate consistent articulation of value created
by intelligent asset management
• Support TfNSW’s Future Sustainability Strategy
• Facilitate greater collaboration between
stakeholders who hold responsibility across
various asset lifecycle phases
• Enable informed decision-making when
considering the balance of financial and non-
financial value associated with options under
consideration
• Identify efficiencies by which future funding
may be redistributed to invest in other business
areas and offset additional funding needs
Figure 2: Alignment with organisational objectives

The value afforded by the Value Creation Framework to the asset management industry and the public is
interlinked with the benefits being realised by TfNSW in terms of the following:

Figure 3: Benefits of the value creation framework

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The Value Creation Framework is a key enabler of the Asset Management Framework and complementary
frameworks as follows:

Figure 4 - Alignment with the TfNSW Asset Management Framework

3 Value creation principles

Value creation involves the application of ten governing principles. Below is an overview of the value creation
principles.

3.1 Principle 1: Value creation is relative to business as usual

Decisions made by applying value creation consider the realisation (or loss) of value relative to the
status quo, or business-as-usual case. This enables various alternatives to be contemplated when
assessing options to improve cost, risk and performance outcomes. By measuring the change in
value relative to business-as-usual, Transport for NSW drives the pursuit of continual improvement
and ever greater realisation of value from its assets.

3.2 Principle 2: Intended objectives shall not be compromised

It is expected that all asset management activities contribute to the realisation of value by
addressing the objectives of the specific activity, regardless of whether that contribution is
specifically articulated or not. The value creation process cannot be misapplied to cause the
objectives of the activity to be diminished. For instance, the pursuit of cost savings or cost
avoidance for a project cannot justify compromising on the objectives of the project.

3.3 Principle 3: Balancing value with effort

The level of effort involved in applying value creation should be proportionate to the amount of
value being claimed. The threshold of effort, at which a decision to make or not make a claim of
value creation, will vary according to the availability and currency of relevant information needed
to support the claim.

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3.4 Principle 4: Relevant periods of interest

Value creation will be represented over a relevant time period, as determined by the benefit life.
The principles of benefit life shall apply for both financial value creation and non-financial value
creation. The benefit life will depend on whether the value is being realised as a direct or indirect
consequence of an asset:
• Value as a direct consequence of the asset means that the benefit life will match the asset’s useful life.
• Value as an indirect consequence of the asset will generally be through the avoidance of spurious work, in
which case the benefit life will be the duration being avoided.

3.5 Principle 5: Collaboration as One Transport

As a whole-of-enterprise framework, value creation balances the needs of each division and is
integrated across the organisation. The success of value creation relies upon the collaborative
efforts between the various roles across the organisation, from standards setters, policy makers,
financial partners, engineering experts, network planners, maintainers and operators, and the like.
The whole-of-enterprise approach as One Transport is designed to eliminate siloed mentalities and smooth the
activities across the delivery, handover, maintain and operate lifecycle phases.

3.6 Principle 6: Whole of system approach

The articulation of value takes into account the interdependencies between the element subject to
value creation / loss, and any higher level systems or components. Intelligent solutions consider
how they may interact with existing systems to avoid compromising value realisation. This may
require engagement with relevant stakeholders and adopting alternative methods to prevent
incompatible outcomes within the network.

3.7 Principle 7: Continual improvement

Value creation data will be continually reviewed with the aim of continual improvement, learning
lessons and assisting with the prioritisation of future works. Learnings from the review, audit and
assurance activities will be taken into account when planning for improvements to asset
management value creation practices.

3.8 Principle 8: Transparency of value creation and loss

Where value loss occurs, it shall be treated with the same rigour and due diligence as instances of
value creation. Occasions of value loss should not be concealed or omitted. Value creation and
value loss will be identified in a fair and transparent manner. Value loss may occur from a non-
conformance to a TfNSW standard.

3.9 Principle 9: Promoting assurance and representative articulation of value

Value may be articulated in the form of financial value, non-financial value, or a combination of
both. Value should be articulated where it is reasonable to do so and can be substantiated. The
amount of value being created or lost will be represented in such a manner that reflects its magnitude.
Where practicable the conversion of value from non-financial to financial should rely on evidence-
based evaluation methods. In the absence of such evidence, theory-based evaluation and relevant sources may be
used. The framework enables the exercise of professional judgement when appropriate to do so.

The workflow for the value creation process will incorporate assurance activities designed to provide confidence
that claims are fair, reasonable, consistent and appropriately substantiated according to the risk of the
corresponding activity and amount of value being claimed. Existing assurance processes related to endorsement,
validation, review and audit will be adopted where applicable.

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3.10 Principle 10: Due consideration of cash impacts

The impact of value creation or loss on cashflows will be taken into account. This will be reflected
in the articulation and reporting of value creation. Where the BAU solution would have caused
unplanned additional spend above the budget, the avoidance of cost will not provide a cash benefit.
Where the BAU solution has been addressed in the budget, and cost savings are reallocated
elsewhere then there will not be a cash benefit.

Where the BAU solution has been addressed in the budget, and cost savings are made available for reallocation,
then the cash benefit should be identified and notified to the Finance Business Partner. Finance teams will track
cash impacts against divisional and organisational performance to identify opportunities or challenges and make
informed decisions about long-term financial sustainability.

4 Value creation process and interdependencies

The lifecycle of the value creation process involves a sequence of activities that span the entire asset lifecycle,
involves internal and external assurance, and which has been integrated with other processes across the
organisation.

The articulation of value takes into account the notion

that value may be financial, non-financial or both
financial and non-financial in nature. Calculations for
financial value will be consistent with the life cycle
costing process, with the level of detail being
proportional to the confidence levels for the work. The
magnitude of non-financial value creation will be
representative of the relative impact. The articulation of
value creation will also be subject to the balance of
informational value with administrative effort.

Endorsement of the articulated value serves the function

of a quality assurance check on the inputs, calculation
and/or measurement methods, and the final results for
assurance purposes. Endorsement is to be complete
before the application as an initial step for assurance to
TfNSW. From there, the endorsed value progresses to
the validation stage.

Figure 5: Value creation process Validation is performed to ensure the value being put
forth is fair and reasonable.

Records of value creation are kept and made available to all relevant stakeholders. The records address enterprise
and Government policy requirements on information management and record keeping. The records are also
subject to assurance and audit for continual improvement purposes.

Reporting of value creation is intended to communicate financial and non-financial successes to the organisation,
provide performance information and provide lessons that will drive better future decision making and investment.

Reporting is a continuous process running through the whole of life. Rolling time periods will be applied as value
will be continually articulated over time. As such, determined value creation events are to be regularly reviewed
and updated. Reporting covers value creation outcomes as well as organisational maturity and conformance of
actions to the framework.

Reviews are conducted on the entirety of the process as needed to identify trends and opportunities for
improvement.

Audit and assurance are conducted across the entirety of the process.

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5 Transport’s maturity journey

5.1 Before Value Creation

Before the Framework was established in July 2022, there were various approaches to value management and
value engineering for TfNSW. These processes were limited to specific life cycle phases and had limited
interaction between them. The introduction of the Value Creation Framework brought together the disparate
approaches to value management across the asset lifecycle and facilitated collaboration with the key roles holding
accountability for the various functions.

Figure 6: Before and after value creation

5.2 Development and change management

The Value Creation Framework was conceptualised, planned and delivered by TfNSW staff. Collaborators from
other jurisdictions and government agencies were involved to build engagement and support the implementation
of the framework. This is because the framework involves the contributions of asset management activities from
both internal and external stakeholders.

The governance body for the initiative was overseen by the TfNSW Asset Management Steering Committee
(AMSteerCo), which has executive representation from across the organisation and is the peak governance body
for asset management at TfNSW. The AMSteerCo reviewed, provided feedback and ultimately authorised the
publication and implementation of the framework.

The changes arising from the Value Creation Framework have been extensive. Whilst value creation has been
operationalised and embedded across TfNSW, continual improvement remains a fundamental aspect of the
process.

Existing asset management and

support processes underwent
minor amendments to link with
the value creation process. The
benefit of the interdependency
was that value creation was
already an underlying
component of these processes,
albeit not emphasised or
explicitly called out at the time.
Figure 7: Change management focus areas

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Behavioural change has been extensive and is an ongoing area of continual growth. Engagement, consultation and
ongoing communication have been championed at the executive, senior and operational levels. Benefits are being
realised in terms of the significantly increased collaboration and harmonious coordination between business units
with responsibility over different lifecycle stages, primarily due to the deeper understanding of each other’s
contributions to the final asset and customer outcomes.

Technological change has been managed in parallel with other technological initiatives to take advantage of
committed programs and funding allocations. Adoption of existing and planned upgrades to technological systems
is reducing the change fatigue and enabling smoother and more efficient adoption of value creation.

5.3 Value creation in practice

The Framework has been a transformative initiative for

TfNSW by supporting the following asset management
frameworks and linking the frameworks, the set of
integrated activities and the organisational objectives:
• Asset Management
• Configuration Management
• Standards Management
• Technical Capability
• Technical Supplier Assurance

The effectiveness of the above frameworks and the

integrated set of activities performed thereunder has
increased. This is evident through:
• Increasing value being realised through intelligent compliance to standards increasing from less than $300
million in 2021/22 to approximately $1 billion in 2022/23. Examples of superior outcomes as a result of
applying the Value Creation Framework include:
o Platform gap filler which improves public safety due to eliminating the risk of falls (at the train station
platform to rolling stock interface) since installation. For context, five people fall into the gap on average
each week at Circular Quay station.
o Pedestrian footbridge design at Redfern that delivers improved customer experience and natural lighting,
through fire safety and electrical safety designs to avoid a fully enclosed tunnel void of natural light
o Weathering steel adoption for the Sydney Gateway bridge in lieu of traditional steel, thereby reducing
maintenance and providing a whole of lifecycle cost saving of circa $70m and reducing the number of lane
closures to perform maintenance.
• Supported the business case to source $400m funding from NSW Treasury to implement the Transport Asset
Custodian Platform, which will provide a fit for purpose and whole of enterprise asset register in accordance
with TPP19-07.

6 Concluding remarks
Value creation is a fundamental aspect of TfNSW’s asset management practice that is both an enabler and
integrator of the asset management, standards management, configuration management, technical supplier
assurance, and technical capability frameworks.

The Value Creation Framework has accelerated the growth in asset management maturity for TfNSW and its
supply chain by championing a whole of lifecycle view to the delivery of value-adding outcomes which have the
optimal balance of cost, risk and performance.

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References
NSW Treasury, 2019. TPP 19-07, Asset Management Policy for the NSW Public Sector, TPP 19-07, Policy and
Guidelines Paper [Online]
Available at: https://www.treasury.nsw.gov.au/sites/default/files/2019-11/TTIP19-07%20NSW%20Asset
%20Management%20Policy%20-%20Master%20Approved_31%20October%202019.pdf
[Accessed 29 February 2024].

Transport for New South Wales, 2021. Transport Sustainability Plan 2021. [Online] Available at:
https://media.caapp.com.au/pdf/e1ddrv/bf21c8dc-ae12-42bf-a135-3e194e993e29/Transport%20Sustainability%20Plan%
202021.pdf
[Accessed 29 February 2024].

Transport for New South Wales, 2022. Future Transport Strategy. [Online] Available at:
https://www.future.transport.nsw.gov.au/sites/default/files/2022-09/Future_Transport_Strategy_2.pdf
[Accessed 29 February 2024].

Transport for New South Wales, 2023. Standards Management Framework. [Online] Available at:
https://www.transport.nsw.gov.au/system/files/media/documents/2023/standards-management-framework.pdf
[Accessed 29 February 2024].

Transport for New South Wales, 2023. Transport for NSW Annual Report Volume 1 2022-23. [Online]
Available at: https://www.transport.nsw.gov.au/system/files/media/documents/2023/Transport-for-
NSW_Annual-Report_2022-23_volume-1.pdf
[Accessed 29 February 2024].

Transport for New South Wales, 2023. TS 00018:3.0 Technical Supplier Assurance Framework. [Online]
Available at: https://www.transport.nsw.gov.au/system/files/media/documents/2023/tfnsw-technical-supplier-
assurance-framework.pdf
[Accessed 29 February 2024].

Transport for New South Wales, 2024. Value Creation Framework. 2 ed.

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