Asset Management

Article by Brandon L. Davies, ManagementInfoCenter.com

The main aim of Asset Management is the optimum utilization of the assets, resources and facilities of a business in order to attain and maximize its objectives. In doing so, the process of Asset Management has to monitor the acquisition of assets along with their use and disposal with the main aim of reaping maximum advantage of the potential of the assets’ service delivery. It should also monitor the risk factors and essential cost aspects of the assets throughout their existence.

The basic objective of any company is to make profit and not to suffer any loss and in doing so they have to ensure that there is no downtime of their assets. In order to achieve this situation, the company has to manage its assets effectively. However, it is not easy to plan, design and implement an effective asset management strategy, which can ensure optimum availability and utilization of the resources available with a company.

An important aspect of this asset management is that its objectives must be made very clear to all the people who are involved in it, ensuring that all conflicting interests are ironed out to achieve the broader objective.

Types of asset management strategies

Since there are many types of business organizations, the asset management strategies are usually adapted to the needs of each type of business. Some of these are being enumerated below:

1. Property Asset Management: It deals with property strategies in connection with lease management and property returns.
2. IT Assets Management: It deals with strategies for minimizing depreciation of IT assets and for the advancement in the IT field.
3. Investment Asset Management: These strategies are involved in monitoring and supervising portfolio investments in the fields of equities, debts and derivatives.
4. Inventory Asset Management: This strategy is very important, as it has to manage inventory and physical stock, which has a direct bearing on investment and finances of a business.

Advantages of Asset Management

Asset management is completely dependent on data collection, based on which the strategies are formulated and implemented.

Automation of the IT data is possible by using desktop and network tools. Asset management in this field is implemented by considering and using the Facility management system, manual data entries or bar code inventories.

A central warehouse is created which houses portfolio, contract, and inventory and process data for the various types of Asset Management strategies and into which all the data relating to the Asset Management is fed. It is easily accessible to the managers via the intranet of the company and it provides user-friendly reporting tools so that they do not waste any time in reporting about their present or old data assets.

The business cost is reduced due to the upswing in the investment performance. Moreover, Asset Management is very useful in safeguarding against financial risks of the company. The business progresses rapidly due to Asset Management as it provides convenient and easy access to correct data.
The managers associated with the supervision of property, technology, plants, public infrastructure and fleets are properly trained and their skills enable them to tackle unexpected problems relating to assets and production amounts.

The various functions of Asset Management encompass the following tasks:

1. Alignment of the organization in order to achieve the set goals, providing a good leadership and imparting mutual understanding.
2. It ensures that the correct data, in terms of quality and details, is gathered and then made available to the people who need it and that too, at the opportune moment.
3. It influences decision-making so that all risk factors are known, accepted and covered by the decision.
4. Life cycle cost analysis: It formulates short-term decisions and actions by taking into account long-term consequences of the same.

Asset Management helps the companies to supervise, spell out, analyze and follow the assets of the business and the various processes associated with it. Nowadays all these functions, which were earlier manually done, have been automated.