Asset Management Is 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 ensure the option of quality data that can be used to generate the business intelligence that may ultimately save them money and improve efficiency. This really is unfortunate, because the tools are readily available – it is merely a matter of making it a priority.
What’s 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 company 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 must certanly be built upon a base of widely accepted accounting principles, and supported by the proper mix of sound business practices and financial acumen. It provides management with a highly effective tool that can be used to derive better short- and long-term planning decisions. Therefore, it is 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 most major fields of business, we choose to define asset management in an even 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 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 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 process of making the assets you own work most productively – and profitably – for the business. Further, it is not just a system you can purchase; but is, instead, a small business discipline enabled by people, process, data and technology.
What are 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 fact, experience shows that there are numerous common causes that may lead to 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 be always a critical function, emphasizing audits only; while others may 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 based on different organizations and/or business systems.
Moreover, poor ongoing asset management practices can impact a small business by degrading customer support delivery, polluting the present installed base of data and distracting sales resources with customer data issues For 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. The consequence of poor asset management can ultimately be devastating to a small business, often leading to a number of 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 number of internal and external audits
The causes of poor asset management can be many; the outward symptoms pervasive; and the outcomes devastating. However, what’s promising is that there are specific solutions available that may help any organization avoid these pitfalls.