Asset Management Is really a Tool Every Business Can Use to Save Money and Improve Productivity
For many 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 guarantee the option of quality data that can be utilized to generate the business intelligence that can ultimately save them money and improve efficiency. This is unfortunate, because the tools are readily available – it is simply a matter of creating it a priority.
What is Asset Management?
There are numerous 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 “a systematic 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 base of widely accepted accounting principles, and supported by the correct mixture of sound business practices and financial acumen. It provides management with an effective tool that can be utilized to derive better short- and long-term planning decisions. Therefore, it is something that each business should consider 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 all the following four key components:
An enabler to generate and maintain critical management data for use internally by the business, in addition to with its respective customers and suppliers (such as installed base or maintenance entitlement data).
A thorough process to get, 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 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 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 buy; 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 contributes to poor data quality – and poor data quality can negatively affect the business over time. In reality, experience shows there are numerous 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. Additionally, 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 important element of the business’s intellectual property.
The principal apparent symptoms 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 derived from different organizations and/or business systems.
Moreover, poor ongoing asset management practices can impact a business 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 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. Caused by poor asset management can ultimately be devastating to a business, often resulting in 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 amount of internal and external audits
The reasons for poor asset management could be many; the observable symptoms pervasive; and the results devastating. However, the good thing is there are specific solutions available that can help any organization avoid these pitfalls.