Buildings, real estate property, heating, ventilation and air conditioning (HVAC) are just a few of the regular assets of a facility.
Besides these, a facility is where regular activities of an entity take place e.g. research center, sports, military defense, shopping, medical production, etc. The term facility itself has generically come to be used for any building, equipment or services which define the particular activity of an organization.
Asset management: An Overview
Asset management is a process that helps in tracking all the assets of an enterprise and maximizing the return on those assets. An asset may include equipment, tools, vehicles, etc.
Asset Management is a systematic approach to operating, maintaining, upgrading, and disposing of assets in a cost cost-effective manner while monitoring cost, risk, and performance parameters.
The asset management software facilitates businesses to streamline their operations by storing all asset information in a central database and affording a big picture of the activity of the organization.
As such, the system concerns all classes of assets:
- Passive Assets – Buildings and Infrastructure
- Static Assets – Land
- Active Assets – Mechanical, Electrical, Office equipment, Software, etc.
Asset management is the practical system of governance and realization of value from the assets that an organization holds and puts into operation over their whole life cycle.
Assets can be tangible (buildings or equipment) or intangible (human capital, intellectual property, or financial assets).
There are a few factors influencing the type of assets an organization requires to achieve its objectives:
- Nature and strategy of an organization
- Objectives of an organization
- Financial implication and Regulatory environment
- Needs and expectations of an organization and its stakeholders
What is an Asset?
An asset can be any item or entity that has the potential to provide its actual value or worth to an organization.
In other words, the asset can be any resource with economic value that an organization owns with the expectation it will provide a future benefit. These assets are reported in the balance sheet of an organization. This important statement is created to establish the organization’s value or benefits that the organization derives from its asset management operations.
Facilities that need to be tracked and managed immediately:
- Information Management Assets – Printers, Copiers, Desktop/Laptop Computers, IT Equipment, Software Licenses
- Personnel Safety – Safety Equipment, Badges, Mobile devices, Radios, Uniforms, Keys, Vehicles
- Facility Related Assets – HVAC equipment, Furniture & Fixtures, Hardware, Lighting, Office Equipment, Appliances
Why is Asset Tracking Necessary?
The asset management system includes assisting in following activities to facilitate operations:
- Asset Inventory Control
- Asset Tracking
- Cost Efficiency
- Operation and Activity Convenience
- Controlled Access
- Aesthetics and Integrations
- Document Tracking
- Asset and Equipment Maintenance
- Improved Asset Utilization
- Capitalize on Lower Insurance Premia
- Increased Efficiency
- Ensure Regulatory Compliance
The common requirements of asset management system are:
- Simple and Easy Asset Addition
- Easy Calculation of Depreciation
- Simple Financial Asset Management
- Automated Asset Lifecycle Management
- Unique Asset Tagging & their Periodic Scan for accuracy
- Scheduled Preventive Maintenance
- Asset Performance Reporting
- Audits and Physical Verification of Assets
Overview of Asset Management
The decision-makers, employees, and other stakeholders of an organization have to contribute to implementing processes such as planning, monitoring and controlling policies, processes, and actions in order to fully exploit the opportunities and reduce operational risks.
An asset management system comes with the benefits which involve the balancing of costs, opportunities, and risks vis-a-vis the performance of assets. It will also enable in achieving the objectives of an organization.
The asset management sets up the application to manage an asset over its entire life cycle – right from its need until its disposal – with a view to maximizing its potential.
Benefits of Asset Management in the area of facilities of an Organization
1. Strategy and Planning
For the facilities in an organization, the objectives to manage them have to be put in place… To achieve the objectives, the asset management activities have to be executed in line with the organization’s priorities and goals.
This also leads the organization to be firmly rooted to reach the desired bottom line inconsistency with plans, funding, etc.
The asset management framework is therefore very important for any facility.
2. Better Decision Making
Any process or system implementation requires focused formalization and documentation to structure a standard decision-making process.
Business decisions are always made by considering the life-cycle of an asset and the underlying capital investment. The point of consideration of an asset’s life-cycle is its total value after the completion of its shelf life. This depends on the asset’s operation, maintenance plan, and resourcing.
This enables to take better decision on the asset’s balanced costs, risks, opportunities, and its performance.
3. Life-cycle Delivery
Life-cycle delivery is the formal process of evaluating the total costs of an asset. This includes all items from its procurement until its disposal.
The life cycle of an asset includes the depreciation adjustments, its repair, and the upgrades carried out on the asset.
Many accounting issues arise throughout the life of an asset based on the needs of the accountant to make decisions regarding financial reporting on the asset’s value.
Asset life cycle management is the process by which maximization of profit generated by the assets is accounted for by the organization throughout their life cycle.
The services of any organization tend to address all the stages of an asset’s life cycle irrespective of their scope, opportunity, scale, or industry.
4. Accurate information
Accurate information characterizes the objective and strategy of the asset management system. The system delivers exact information about the status of all the business assets.
Authentic asset data facilitates an organization to maintain accurate records to align with the purpose and consistency of facility asset management standards.
Risk management is an essential part of the asset management system. Organizations need to embed risk management processes in their asset management system to evaluate benefits, risks, and opportunities and implement improvement processes.
The asset management system is essential for your organization. It helps in managing all assets effectively. A facility management system with an asset tracking system enables to achieve business results.