Asset Management Is really a Tool Every Business Can Use to Save Money and Improve Productivity
For some businesses, the efficient tracking of their installed base or in-service equipment, and the management of their spare parts inventories are key factors in determining the prospects for internal productivity and customer service profitability. However, many organizations do not even utilize a comprehensive asset tracking and management process to ensure the availability of quality data that can be used to generate the business enterprise intelligence that may ultimately save them money and improve efficiency. That is unfortunate, because the equipment are plentiful – it is merely a matter of making it a priority.
What’s Asset Management?
There are lots of definitions of “asset management”, although most deal primarily with financial considerations. Some derive from evolving maintenance management systems; some on the management of factory floor equipment configurations; and some for the purposes of monitoring network equipment or even railway car and container locations. However, regardless of what situation or application your organization handles, the core definition remains constant; asset management is “an organized process for identifying, cataloging, monitoring, maintaining, operating, upgrading and replacing the physical assets of the business enterprise on a cost-effective basis “.
To be truly effective, the asset management process must certanly be built upon a basis of widely accepted accounting principles, and supported by the correct mixture of sound business practices and financial acumen. It can offer management with a fruitful tool that can be used to derive better short- and long-term planning decisions. As a result, it is something that each business must look into adopting – and embracing.
After years of studying and supporting the Information Technology (IT) needs and requirements of clients in every major fields of business, we choose to define asset management in a more dynamic way, encompassing all the following four key components:
An enabler to generate and maintain critical management data for use internally by the company, as well as using its respective customers and suppliers (such as installed base or maintenance entitlement data).
An extensive process to acquire, ktam validate and assimilate data into corporate information systems.
A flexible system permitting either the manual acquisition and/or electronic capture and reconciliation of data.
A course with accurate and intelligent reporting of critical business and operational information.
Asset management isn’t merely the identification and inventorying of IT and related equipment; it is the process of making the assets you own work most productively – and profitably – for the business. Further, it is not just a system you can buy; but is, instead, a company discipline enabled by people, process, data and technology.
What are the Signs, Symptoms and Aftereffects of Poor Asset Management?
Poor asset management contributes to poor data quality – and poor data quality can negatively affect the business enterprise over time. In fact, experience shows that there are several common causes that may cause poor asset management, including insufficient business controls for managing and/or updating asset data; insufficient ownership for asset data quality; and an out-of-balance investment in people, process, data and technology. Furthermore, some businesses may not consider asset management to become a critical function, concentrating on audits only; while others may not consider asset data to be a significant component of the business’s intellectual property.
The principal symptoms of poor asset management will also be fairly ubiquitous, and may include anything from numerous compliance and security issues, to uncontrollable capital and/or expense budgets, excessive network downtime and poor performance, under- or over-utilized assets, incompatible software applications, increasing operational costs and headcount, and non-matching asset data based on different organizations and/or business systems.
Moreover, poor ongoing asset management practices can impact a company by degrading customer service delivery, polluting the prevailing installed base of data and distracting sales resources with customer data issues For instance, Service Delivery might be impaired by inaccurate depot sparing creating customer entitlement issues, increasing escalations to upper management and lowering customer satisfaction. An uncertain installed base lengthens contract renewal cycle-time, limits revenue opportunities and inhibits technology refresh planning. Caused by poor asset management can ultimately be devastating to a company, often ultimately causing more than one of the following negative impacts:
Increased Asset Total Cost of Ownership (TCO)
Decreased workforce productivity
Increased non-compliance issues (i.e., SOx)
Decreased Customer Satisfaction
Lower Return-on-Investment (ROI) on capital investments
Decreased network/business performance
Increased amount of internal and external audits
The factors behind poor asset management may be many; the observable symptoms pervasive; and the results devastating. However, the good thing is that there are specific solutions available that may help any organization avoid these pitfalls.