Asset Management Is a Tool Every Business Can Use to Save Money and Improve Productivity
For many businesses, the efficient tracking of these installed base or in-service equipment, and the management of these 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 may be used to generate the business enterprise intelligence that will ultimately save them money and improve efficiency. This really is unfortunate, because the tools are plentiful – 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 business handles, the core definition remains constant; asset management is “an organized process for identifying, cataloging, monitoring, maintaining, operating, upgrading and replacing the physical assets of the business enterprise on a cost-effective basis “.
To be truly effective, the asset management process must certanly be built upon a basis of widely accepted accounting principles, and supported by the correct mix of sound business practices and financial acumen. It provides management with an effective tool that may be used to derive better short- and long-term planning decisions. As a result, 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 all 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, along with with its respective customers and suppliers (such as installed base or maintenance entitlement data).
A thorough process to obtain, ktam validate and assimilate data into corporate information systems.
A flexible system enabling either the manual acquisition and/or electronic capture and reconciliation of data.
An application 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 making the assets you own work most productively – and profitably – for the business. Further, it is not a system you can get; 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 enterprise over time. In fact, experience shows there are a number of common causes that will lead to 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 become a critical function, concentrating on audits only; while others might not consider asset data to be an essential element of the business’s intellectual property.
The principal outward indications 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 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 existing installed base of data and distracting sales resources with customer data issues Like, 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 business, often resulting in one or more 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 amount of internal and external audits
The causes of poor asset management may be many; the observable symptoms pervasive; and the results devastating. However, the good thing is there are specific solutions available that will help any organization avoid these pitfalls.