Asset Management Is a Tool Every Business Can Use to Save Money and Improve Productivity
For most businesses, the efficient tracking of the installed base or in-service equipment, and the management of the spare parts inventories are key factors in determining the prospects for internal productivity and customer service profitability. However, many organizations do not yet utilize a comprehensive asset tracking and management process to ensure the accessibility to quality data that can be utilized to generate the company intelligence that will ultimately save them money and improve efficiency. This really is unfortunate, because the various tools are readily available – it is merely a matter of creating it a priority.
What is Asset Management?
There are many 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, whatever situation or application your organization relates to, 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 be built upon a foundation of widely accepted accounting principles, and supported by the appropriate mixture of sound business practices and financial acumen. It can provide management with an effective tool that can be utilized to derive better short- and long-term planning decisions. As such, it is something that every business should consider adopting – and embracing.
After years of studying and supporting the Information Technology (IT) needs and requirements of clients in most major fields of business, we would rather 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, in addition to using its respective customers and suppliers (such as installed base or maintenance entitlement data).
An extensive process to obtain, 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 procedure of creating the assets you own work most productively – and profitably – for the business. Further, it is not really a system you should buy; but is, instead, a business discipline enabled by people, process, data and technology.
What’re the Signs, Symptoms and Ramifications of Poor Asset Management?
Poor asset management leads to poor data quality – and poor data quality can negatively affect the company over time. In reality, experience shows that there are numerous common causes that will result in 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 be a critical function, emphasizing audits only; while others may not consider asset data to be an essential element of the business’s intellectual property.
The principal outward indications of poor asset management may 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 For instance, 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 consequence of poor asset management can ultimately be devastating to a business, often ultimately causing one or more of the next 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 causes of poor asset management can be many; the symptoms pervasive; and the outcomes devastating. However, what’s promising is that there are specific solutions available that will help any organization avoid these pitfalls.