In every facet of life, assets are quite precious. In the corporate equation, assets are particularly crucial components that generate constant revenue when used correctly. Even though the term “asset” has a wide definition, it often refers to anything that can be controlled, managed, and utilized to either store or generate more value. These comprise both the tangible and intangible assets that your business owns. Effective asset management software is often needed for the firm to monitor and manage the assets with a systemized approach. If your company doesn’t have an asset management system, there are a lot of hazards associated with it. Every piece of fixed or liquid equipment is crucial to the operation of your organization. The advantages of asset management include increased efficiency and production, which will put your company in a better position to raise return on investment. In this blog, we will thoroughly examine asset management systems and how they benefit businesses in various ways.
What is an Asset Management System?
An asset management system is an application or solution used by various businesses to automate the asset tracking processes and keep track of the inventory and equipment that are essential to the day-to-day running of their enterprises. The company’s physical and intangible assets are all managed via the asset management system. Physical goods, including machinery, equipment, land, buildings, cars, and more, are considered tangible assets. Databases, operational information, software license agreements, and organizational capital are more examples of intangible assets.
Asset management ensures that your business can employ the right assets to grow and thrive. It will support risk management, business continuity, and other objectives. Furthermore, asset management is a methodical approach for efficiently buying, maintaining, upgrading, and even disposing of organization-wide assets. As a result, it increases the potential for asset supply and decreases costs.
Asset Life Cycle
Asset management will take place within the framework of the specific lifecycle, so discussing the asset lifecycle is necessary before discussing how organizations profit from asset management systems. The asset lifecycle is the total number of phases an asset goes through during its operational life cycle. A business can successfully and efficiently use an asset to accomplish its business goals through a strategic and analytical procedure. An asset’s life cycle is broken down into several stages and typically includes every stage of an asset’s existence (from acquisition to maintenance and disposal). As a result, each asset has a life cycle that can be divided into four different phases: planning, acquisition, operation and maintenance, and disposal.
Planning: Planning is the first phase of the asset life cycle. At this phase, the asset requirements are determined and confirmed. An evaluation of current assets and their capacity to meet customer service demands will help determine asset requirements. The requirements may be merged to create a hybrid asset that is perfectly tailored to an organization’s needs based on business and industry standards. Unfortunately, it’s also a stage where a significant number of errors can happen. A well-defined plan is essential at this stage because a calculation error or incorrect arrangement could have an impact on all phases up until the asset is replaced or disposed of, which could take years.
Acquisition: A company can only select the best asset after determining the costs and requirements of all the available possibilities. The entire process of buying an asset and ensuring a cost-effective acquisition is covered by acquisition planning. This involves activities like asset design and purchasing. The object is fit for usage if these tasks are carried out correctly. At this stage, a company must first decide whether the asset will be bought or built internally. The next step is to develop a spending plan and a schedule for buying assets. The process of purchasing assets may be affected by project management if a realistic budget and cash flow are not assigned as deficit funds.
Operation and Maintenance: In the asset lifecycle, the stage of operation and maintenance is possibly the longest. It covers the use and management of an asset, including maintenance, in order to deliver ongoing services. As a result, in their asset management plan, asset managers should give priority to concerns about asset upkeep. For instance, long-lasting physical assets like buildings and roads require particular maintenance over the course of their existence. Similar upgrades are required for financial services like portfolio management to be successful. Therefore, maximizing asset use is the stage’s main objective. To prevent operational changes during this time, businesses should concentrate on a single asset for adequate maintenance, monitoring, and prospective improvement. Operation and maintenance encompass upgrades, patch fixes, new license purchases, compliance audits, and cost-benefit analyses.
Disposal: An asset may be categorized as surplus or underperforming depending on how close it is to the end of its useful life. The end of an asset’s lifespan is when it is replaced or disposed of. All assets will produce enough data to allow businesses to make the best decision. However, it is uncommon for this data to be gathered in a way that can aid managers or executives in making wise choices. In order to use the data effectively, an organization should be aware of these crucial procedures well before the renewal or disposal stages.
Types of Asset Management System
It’s imperative to be fully informed of all key resources at your workplace, especially those required for wealth growth and administration. For instance, a gelato store owner might gather data on how to manage their most important asset, the refrigerator. In contrast, an IT asset manager would monitor their organization’s software license compliance to prevent fines and violations. It’s essential to comprehend the various asset management models before choosing a strategy that will work for you. The following asset management categories are listed according to their industry sector.
Financial asset management
The area of financial services that oversees investment products and segregated account holders is known as financial asset management, sometimes known as investment management. Although there are different sorts of asset management depending on the industry sectors, the financial services sector is where the word asset management is most frequently employed. Effective financial asset management is made possible for enterprises, governments, and individuals through accounting software. The three main groups of consumers of financial asset management services are businesses, extremely wealthy people, and financial intermediaries. Each group is engaged in asset management for the same objective: to maximize profits from the available investment capital.
Enterprise asset management
Enterprise asset management (EAM) is a group of procedures used to monitor and manage asset performance in order to increase an asset’s life span. It’s a system that aids businesses with a lot of assets in concentrating on asset management, maintenance, efficiency, and condition from acquisition through disposal. The management of an organization’s assets is aided by EAM software. An EAM system may also contain an asset registry and a computerized maintenance management system (CMMS). Additionally, geographic information systems are widely used to represent geographically dispersed, connected, or networked assets (GIS). By enhancing data quality and interoperability using a GIS-centric asset registry, users are able to reuse, synchronize, and interchange information more successfully.
IT asset management
IT asset management (ITAM) is a group of operational procedures for integrating IT resources throughout the company. The full lifecycle of IT assets, including software and hardware, is managed by combining financial, contractual, inventory, and risk management responsibilities. ITAM software offers a comprehensive view of the IT environment within an organization, enabling granular insight for all IT assets. This becomes crucial when creating and managing an organization’s IT infrastructure from scratch.
Digital asset management
Digital asset management (DAM), a field that is constantly expanding, assists firms in rationally organizing and easily accessing their digital assets (including media and content). DAM software provides a cost-effective method to control access to digital assets. A DAM system’s primary purpose is to provide workflow and lifecycle management for a company’s digital assets, such as videos, photos, audio files, design files, and presentations. As a result, it is frequently employed as a brand management tool to make sure internal teams uphold brand standards and preserve brand consistency. Additionally, it offers a number of efficiency and security advantages. Businesses can manage who has access to their digital assets by using a DAM, which grants different levels of access to information based on fixed but changing responsibilities. DAMs also increase productivity by cutting down on the expense of finding or generating new assets. These solutions enable the safe management and storage of media files as well as the tracking of asset versioning.
Infrastructure asset management
Infrastructure asset management encompasses a comprehensive strategy for maintaining physical assets like water treatment plants, utility lines, roads, bridges, and transportation. Infrastructure asset management is frequently used by large businesses, like construction firms and governmental organizations, to manage significant physical assets. Typically, the process concentrates on the last stages of a facility’s life cycle, like maintenance, rehabilitation, and replacement. The appropriate infrastructure asset management software can be used to carefully monitor, track, and manage a company’s infrastructure assets, even if they are physical. This makes sure that preventative maintenance is done correctly and aids in gathering vital analytical data that companies may use to make data-driven decisions.
Features of Asset Management System
You may need to track and report on multiple assets across various departments if your organization is tasked with managing asset portfolios. This is time and labor intensive, especially if your company uses a manual asset management procedure. Organizations are switching from manual asset management procedures to asset management software for this reason. But not every asset management system is the same. To benefit from the advantages of automating asset tracking and maintenance, you must choose the appropriate software. The following are the key characteristics you need in an asset management system.
Real-time Tracking: Asset management includes asset tracking as a crucial element. Assets may be tracked in real-time, which enables businesses to make quick decisions and avoid wasting money on unneeded repairs and replacements. Real-time tracking of assets is made possible with the best asset tracking software, allowing you to keep track of their whereabouts and state.
Lifecycle Management: Full lifecycle management gives you a complete picture of your assets at every phase, enabling you to make decisions quickly and intelligently. Tools that allow you to track your assets from acquisition through disposal should be included in your asset management software.
In-Depth Reporting: In-depth reporting offers the information needed to make well-informed decisions about assets, including those involving their use, maintenance, acquisition, and disposal. Asset management systems that are clever and simple allow for real-time, thorough reporting that offers in-depth insights into assets and aids organizations in making wise decisions.
Maintenance planning: When asset management software is coupled with a strong asset management module, comprehensive tools are available to successfully track and manage assets. These tools may include maintenance scheduling, task delegation, and a way for volunteers or field staff to report on the progress of maintenance tasks.
Balanced workload allocation: Your field staff or volunteers may need to be tasked with performing asset maintenance duties frequently. It might be difficult and time-consuming to distribute tasks manually. The asset management software ought to make it simple to assign tasks to your field staff or volunteers, saving you time and effort.
User-friendly interface: A user-friendly asset management system can significantly reduce the amount of time and staff training requirements. A self-explanatory interface and an intuitive dashboard are two elements to look for in asset management software. These capabilities will make it simpler for your team to use the software and carry out the appropriate maintenance tasks.
How Asset Management Systems Benefit Businesses?
Assets are crucial and valuable resources that a business requires to function properly. Asset management ensures that the appropriate individuals always have access to assets and that no unneeded harm is done. Making your assets work and function efficiently is what asset management is all about. Utilizing asset management to ensure cost-effective processes and optimal return on investment (ROI) for all of your organizational assets has a number of advantages.
Furthermore, a business can reduce the amount of money it spends on purchasing, operating, and maintaining assets by using asset management software. To operate at peak efficiency, you must keep costs under control, maintain at least adequate production quality, and maximize profits. GPS and RFID tracking for your assets should be possible with your asset management system.
A sizable portion of businesses today are doing more with fewer resources, which requires workers to take on more work without increasing headcount. Asset management goes further and deeper down the list of priorities as more important issues throughout the day or week. An asset management system, often known as an asset system, is designed to assist businesses in keeping track of fixed assets vital to their capacity to operate profitably. Imagine how operations would be without an asset management system, and you have maybe the greatest case for one. Without a precise, organized system for tracking assets, a business has few options when things inevitably go missing. If the business is even scheduling preventative maintenance at all, it is much more difficult to keep track of it. Calculations of depreciation may contain mistakes, which could cost taxpayers money or result in other penalties.
Finding the whereabouts of an asset should be a straightforward operation, yet it often involves making phone calls or going through paperwork. Records are frequently misplaced or dispersed throughout the office. Budgets are stretched as managers are forced to make accurate predictions about their asset requirements. With the help of an asset management system, businesses can accurately account for all of their fixed assets from any location at any time. In the end, this means that their balance sheets correspond to their records and that ghost assets—assets for which the business continuously pays insurance after they have been lost or stolen—no longer hurt their bottom line. Businesses that don’t manage their assets well generally lose a lot of time and money before they start looking for a better solution.