Asset Management Is just a Tool Every Business Can Use to Save Money and Improve Productivity
For most 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 support profitability. However, many organizations do not yet utilize a comprehensive asset tracking and management process to guarantee the option of quality data that can be used to generate the business enterprise intelligence that could ultimately save them money and improve efficiency. This really is unfortunate, because the equipment are plentiful – it’s simply a matter of earning it a priority.
What is Asset Management?
There are lots of definitions of “asset management”, although most deal primarily with financial considerations. Some are derived 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 relates to, 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 foundation of widely accepted accounting principles, and supported by the proper mix of sound business practices and financial acumen. It can offer management with a highly effective tool that can be used to derive better short- and long-term planning decisions. As a result, it’s 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 every major fields of business, we prefer to define asset management in an even more dynamic way, encompassing all the following four key components:
An enabler to generate and maintain critical management data for use internally by the company, as well as using 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 permitting 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 is not merely the identification and inventorying of IT and related equipment; it’s the procedure of earning the assets you have work most productively – and profitably – for the business. Further, it’s not really a system you can get; 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 leads to poor data quality – and poor data quality can negatively affect the business enterprise over time. Actually, experience shows there are numerous common causes that could cause 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 might not consider asset management to be a critical function, concentrating on audits only; while others might not consider asset data to be an essential part 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 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 existing installed base of data and distracting sales resources with customer data issues For instance, 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 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 reasons for poor asset management can be many; the observable symptoms pervasive; and the outcomes devastating. However, what’s promising is there are specific solutions available that could help any organization avoid these pitfalls.