What is asset management?
Asset Management is always done when a good call for financial concern is present in the business which directly seeks attention to the management of investments.
Asset management is the process for planning and regulating the acquisition, operation, maintenance, renewal, and distribution of all the assets present in an industry.
The implementation of asset management improves the capacity of assets for daily operations and reduce the chances of risks.
Every organization has assets to keep track on, to know their availability and their possible returns.
What is Asset Life-cycle in terms of Asset Management?
Fixed Asset life cycle is the procedure of stages that an asset goes through during its effective lifespan under an organization’s ownership. Behind maintaining and managing a healthy operational shelf life of an asset, the reason is effectively and efficiently utilizing that asset to acquire desired profits in business.
An asset lifecycle comprises the stages from acquisition to its maintenance and then disposal. Major stages that an asset’s life-cycle includes are:
- Consumption and depreciation
- Operation, repair and maintenance
Types of Asset Management
Asset management shows the planning, directing, and maintenance of investment assets which can be tangible or intangible.
The broad category of asset management is divided into the following types:
Financial Asset Management:
Asset management for the financial services that manages investment funds and investment accounts.
Enterprise Asset Management:
EAM is implemented and functions for fixed assets in an organization through their life cycle to keep track and record over their movement, updates, maintenance activities, etc.
Infrastructure Asset Management:
Public infrastructures such as roads, bridges, etc. also require asset management for their maintenance and replacement.
Public Asset Management:
Asset management for public spaces to increase the service life of public assets.
IT Asset Management:
Management for IT hardware and software including maintenance, contractual and accounting functions.
Fixed Asset Management:
Asset tracking for fixed assets for the hike on finances and reduction in downtime.
Digital Asset Management:
Management of information collection that an organization owns or controls digitally such as AV, etc.
Advantages of Asset Management in an Organization
There are many advantages of asset management to ensure cost-efficient operations, achieve the organizations objectives, and greatest ROI.
In specific, asset management can help in the following departments:
The asset management with tracking comprises the complete list for what the organizations own, which includes where the assets are located, who is using them, when changes were last made, etc. Such a deep tracking of hardware, software and inventories provide many benefits for business growth.
2. Operational Efficiency
The efficiencies of operational assets align on needs and requirements along with their existing capabilities. Questions like what can be done to reduce expenditure and save money may arise.
Asset management pulls every information about all the assets in their lifecycle regarding capabilities, usage, upgrades, maintenance, etc.
3. Maintenance savings
Assets require maintenance during its lifecycle, here asset management helps and ensure all the maintenance tasks are done by scheduling them for you and provides your record for all the spare parts as per the need, without over-expenditure.
4. Multi-site integration
Some organizations possess multiple worksites at different locations, these are more likely to require asset management to create asset and inventory reports, accurately.
5. Financial reporting
Accounting for all the assets is necessary (whether they are hardware or software) for their acquisitions, usage and maintenance expenditures and other needs, remembering and focusing on amortization rates.
6. Asset recovery
IT hardware are not going to live forever, some assets will eventually be redeployed, potentially moving from an operational site to a remote office or removed for other purposes as well. And the assets which are not at all in use will just be sold or scrapped. These changes, as well as utilization of inventory, need to accurate in the report books.
7. Risk management
For an organization or a business, there are always certain risks that need to be managed and asset management helps identify where those risks lie and what solutions can be employed to avoid them.
It was always good to receive accurate data about history and usage of asset and inventory and understanding it for what is being deployed. This empowers an organization to identify the movements of assets and provide a clear report for better decision making for the needs and budgets of business.
It is tough to keep all the track of assets and machinery but with strong asset management software, it becomes easier to tell when items were lost or stolen and deal with the underlying causes such as overly broad access to storage areas and reduce vulnerabilities. Hence, recovery efforts are also initiated accordingly.
Asset Management Software is a software solution used for keeping record and tracking the assets throughout its life cycle in an organization, from its acquisition until they get disposed of. As asset management is a systematic way to utilize, maintain, upgrade and dispose of the assets in a cost-efficient way to provide more and more profitable growth to a business.