Asset Management is a system that monitors and maintains things of value to an entity or group and include both tangible as well as intangible aspects like buildings, plant and Machinery, intellectual property, goodwill etc. According to American association of State highway and Transport officials, it’s a systematic process involving operating, maintaining, upgrading, and disposing of assets cost-effectively. The historical background of Asset management can be traced back to that of Romans who built strong empire through construction of roads, aqueducts and other assets thereby linking provision and sophistication of technological assets in our modern as well as ancient lifestyle.
The term Asset management is primarily important as it means
- Understanding what one has, where it is, who controls it, who possess it, it’s true value and what improvements can be made to decrease losses.
- It brings out the fact that the replacement value of assets is much higher than one ever thinks.
- Adequate records mean you have proper insurance coverage on expensive assets.
- Simplifies making an insurance claim if ever necessary.
- Prevent/reduce ‘mysterious disappearance’ or ‘shrinkage’. Just a barcode label on an asset is known to deter casual ‘borrowing’ of an asset.
- Recover assets from employee when he or she leaves your company.
- Get maximum value from your investment. Are assets really being used where they are or could they be better employed elsewhere in the organization?
- Increase accountability and control, reduce costs by allocating idle assets.
- Eliminates the High Error Incidence of Handwritten Record Keeping, prevent Missed Maintenance Schedules, account for lost and misplaced equipment etc.
- A planned periodical audit of Assets helps schedule replacement of the assets and thus eliminates involvement of large funds.
Most of the business goal is to make money through investments and other proposals. This depends on two factors and effective asset management complies with latter factor. These are
- Increasing Revenue/Sales
- Decreasing Cost/Losses
Asset management is classified into Infrastructural, Financial, Enterprise and Public.
- Infrastructural Asset management is the combination of management, financial, economic, engineering, and other practices applied to physical assets with the objective of providing the required level of service in the most cost-effective manner. Includes management of whole life cycle (design, construction, commissioning, operating, maintaining, repairing, modifying, replacing and decommissioning/disposal) of physical and infrastructure assets, Operating and sustainment of assets in a constrained budget environment require some sort of prioritization scheme.
- Financial Asset Management complies with Investment management; a sector of financial services managing collective investment schemes and segregate client business.
- Enterprise asset management is business processes and enabling information systems that support management of an organization’s assets, both physical (such as buildings, equipment, infrastructure etc.). Thus it includes Physical asset management, fixed asset management, IT asset management, Digital asset management which covers entire physical assets to Fixed assets and Information technology assets to Digital media.
- Last but not the least and most proficient one Public Asset or Corporate Asset management which is a GIS centric and standardizes data and allows interoperability, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner by making the GIS geo-database the asset registry. It is widely used in many countries including US, UK, etc.