Asset Management Is really a Tool Every Business Can Use to Save Money and Improve Productivity
For most 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 option of quality data that can be used to generate the business intelligence that can ultimately save them money and improve efficiency. That is unfortunate, because the tools are plentiful – it is just a matter of creating it a priority.
What is 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 as well as railway car and container locations. However, regardless of what situation or application your organization deals with, 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 on a cost-effective basis “.
To be truly effective, the asset management process should be built upon a basis of widely accepted accounting principles, and supported by the appropriate mix of sound business practices and financial acumen. It can offer management with an effective tool that can be used to derive better short- and long-term planning decisions. Therefore, 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 all 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 business, as well as having its respective customers and suppliers (such as installed base or maintenance entitlement data).
A thorough process to acquire, ktam validate and assimilate data into corporate information systems.
A flexible system allowing for either the manual acquisition and/or electronic capture and reconciliation of data.
A program 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 method of creating the assets you own work most productively – and profitably – for the business. Further, it is not just a system you can get; but is, instead, a business discipline enabled by people, process, data and technology.
What’re the Signs, Symptoms and Effects of Poor Asset Management?
Poor asset management leads to poor data quality – and poor data quality can negatively affect the business over time. In reality, experience shows that there are a number of common causes that can result in poor asset management, including lack of business controls for managing and/or updating asset data; lack of ownership for asset data quality; and an out-of-balance investment in people, process, data and technology. Furthermore, some businesses might not consider asset management to be always a critical function, concentrating on audits only; while others might not consider asset data to be an essential component of the business’s intellectual property.
The principal apparent 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 produced from different organizations and/or business systems.
Moreover, poor ongoing asset management practices can impact a business by degrading customer service delivery, polluting the present installed base of data and distracting sales resources with customer data issues Like, Service Delivery may 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. The result of poor asset management can ultimately be devastating to a business, often leading to a number of 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 quantity of internal and external audits
The reasons for poor asset management can be many; the symptoms pervasive; and the outcome devastating. However, what’s promising is that there are specific solutions available that can help any organization avoid these pitfalls.