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 support profitability. However, many organizations do not even start using a comprehensive asset tracking and management process to ensure the option of quality data that can be utilized to generate the company intelligence that could ultimately save them money and improve efficiency. That is unfortunate, because the tools are plentiful – it’s just a matter of earning it a priority.
What’s Asset Management?
There are lots of definitions of “asset management”, although most deal primarily with financial considerations. Some are derived 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 company handles, the core definition remains constant; asset management is “a systematic process for identifying, cataloging, monitoring, maintaining, operating, upgrading and replacing the physical assets of the company 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 appropriate mixture of sound business practices and financial acumen. It can provide management with a successful tool that can be utilized to derive better short- and long-term planning decisions. As such, it’s something that every 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 far more dynamic way, encompassing each of the following four key components:
An enabler to generate and maintain critical management data for use internally by the business, in addition to using 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 enabling 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 is not merely the identification and inventorying of IT and related equipment; it’s the procedure of earning the assets you own work most productively – and profitably – for the business. Further, it’s not really a system you can buy; but is, instead, a company discipline enabled by people, process, data and technology.
What’re the Signs, Symptoms and Ramifications of Poor Asset Management?
Poor asset management results in poor data quality – and poor data quality can negatively affect the company over time. In reality, experience shows that there are a number of common causes that could 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. Additionally, some businesses may not consider asset management to become a critical function, emphasizing audits only; while others may not consider asset data to be an essential component of the business’s intellectual property.
The principal outward indications of poor asset management are also 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 support delivery, polluting the prevailing installed base of data and distracting sales resources with customer data issues As an example, 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 leading to one or more of these 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 reasons for poor asset management could be many; the outward symptoms pervasive; and the outcome devastating. However, the good thing is that there are specific solutions available that could help any organization avoid these pitfalls.