SPEAR enables the user to estimate the life cycle costs of available intervention options, including the base case of retaining the existing asset.
The tool is populated using a range of modelling tactics and information elicitation techniques. Once this is done, various metrics of investment worth are calculated, including Net Present Value, Life Cycle Cost and cumulative Life Cycle Cost.
The tool allows the user to determine the worth of making an investment immediately, as well as the optimum intervention time if that is in the future.
SPEAR also allows the user to specify active deferral options, such as monitoring of an asset to reduce failure consequences. It also allows the sensitivity analysis to be extended to allow a range of ‘what-if’ scenarios to be easily specified.
SPEAR can be used to investigate the economic and financial justification of risk management and renewal decisions. In this context, financials are costs that impact the bottom line, while economics reflect broader triple bottom line considerations.
While the tool can be used by an informed asset manager working alone, its value becomes more apparent when used in a facilitated workshop environment.
Key assumptions relating to the likelihood and consequence of failure or the cost and effectiveness of intervention options can be readily changed to examine how they influence the decision in question.
This helps the team explore conflicting opinions and thereby generate consensus on the best path forward.
Changing assumptions also helps to determine if there is value in obtaining better data to constrain model inputs. For example, if an input can be changed significantly without changing the decision, then there is no need to collect better data.