5.2.1 Challenges in Cross-Asset Resource Allocation


Challenges in Cross-Asset Resource Allocation

Resource allocation decisions considering multiple objectives is difficult due to a variety of factors. Competing objectives, data limitations, and uncertainty complicate the resource allocation process.

In determining what work to perform across all assets, an agency is faced with the basic problem of multi-objective, cross-asset decision-making. Typically an agency must, either implicitly or explicitly, determine how to divide scarce resources between different asset types, and in so doing try to accomplish a variety of different objectives.

The basic process described in Section 5.1 is applicable whether the resource allocation process concerns a single asset or multiple assets. However, there are extra challenges inherent when dividing resources among multiple types of assets or types of investments. Making resource allocation decisions considering multiple objectives is made more difficult by a variety of challenges, including but not limited to:

Competing Objectives. Fundamentally, a transportation agency seeks to improve mobility while maximizing the safety of the transportation system, minimizing negative impacts to the environment and society, and making best use of limited funds and other resources. It is difficult to quantify these as well as other competing objectives and often hard to reach consensus on what achievements should be prioritized when determining how an agency measures the progress of different areas to support a decision.

Data Limitations. A structured approach to resource allocation requires data. Ideally, an agency has detailed, quantitative data on existing conditions, the scope of a proposed investment, and what the effects of an investment are likely to be. However, obtaining data and projecting future conditions can be costly, and the decision to proceed with an investment must sometimes be made before detailed data is available. Often it is necessary to use qualitative data or estimates in lieu of quantitative data.

Uncertainty. Transportation investments are intended to make improvements in the future, but there is always uncertainty concerning future asset and system conditions as well as how assets will perform and what external risks may impact the system.

Structuring the resource allocation process to address multiple types of assets or investments requires particular focus on two of the steps illustrated in Figure 5-1: Step 3 - Quantify Targets and Step 5 – Prioritize Investments. Different approaches to cross-asset resource allocation tend to focus on one or the other of these steps.

For instance, a process focused on defining targets is premised on the fact that most asset management systems model different asset classes separately, using different deterioration models, treatment rules and benefit calculations. Different systems and approaches are also used to analyze different types of investments. It is possible to perform separate analyses for each asset or investment type that consider what results will be obtained depending on the overall investment level or other variations in resource allocation. Decision makers can then review the results of the different analyses to determine how to allocate resources at a high level. Once an overall allocation is established, different approaches can be used for prioritizing investments by asset or investment type.

In contrast, with a process emphasizing prioritization, the focus is on identifying and prioritizing specific candidate investments. The prioritization approach helps determine which investment is most desirable considering the organization’s goals and objectives, and the predicted outcomes of the investment. In this case it is not necessary to perform asset-specific analyses, and it is possible to define projects that address multiple types of assets and investments that cut across predefined types. For example, a corridor project could include work on existing pavement and bridges, as well as intersection improvements that improve safety and mobility. However, an organization implementing a cross-asset prioritization approach must consider how to quantify its different goals and objectives, and explicitly weigh progress in one area versus another.

In practice, most agencies use an approach that involves both setting performance targets and prioritizing specific investments. The following subsections provide additional details on use of performance targets and multi-objective approaches, and provide examples illustrating emphasis on each of these areas.