Asset Management Is just a Tool Every Business Can Use to Save Money and Improve Productivity
For many 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 care 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 may ultimately save them money and improve efficiency. This is unfortunate, because the various tools are readily available – it’s simply a matter of making it a priority.
What’s 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, whatever situation or application your business handles, 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 be built upon a base of widely accepted accounting principles, and supported by the appropriate mix of sound business practices and financial acumen. It can provide management with a highly effective tool that can be utilized to derive better short- and long-term planning decisions. As a result, it’s something that each 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 a far 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 with its respective customers and suppliers (such as installed base or maintenance entitlement data).
An extensive process to acquire, ktam validate and assimilate data into corporate information systems.
A flexible system permitting 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’s the process of making the assets you possess work most productively – and profitably – for the business. Further, it’s not 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 business over time. In reality, experience shows there are several common causes that may cause poor asset management, including not enough business controls for managing and/or updating asset data; not enough 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 a critical function, emphasizing audits only; while others might not consider asset data to be a significant part of the business’s intellectual property.
The principal apparent symptoms of poor asset management will 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 care delivery, polluting the existing installed base of data and distracting sales resources with customer data issues For 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 ultimately causing 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 quantity of internal and external audits
The factors behind poor asset management can be many; the symptoms pervasive; and the results devastating. However, the good news is there are specific solutions available that may help any organization avoid these pitfalls.