What are the Elements of the Asset Management System?

Asset management is a process that helps you in tracking your property and maximize the return on those assets. The asset may include equipment, tools, vehicles, etc.

The asset management system nowadays allows businesses to streamline all their operations by storing all the asset information in the central database, enabling them to view trends as a big picture in the account.

Principles of Asset Management System

The principles of the asset management system will concern all the classes of assets:

• Passive Assets - Buildings and Infrastructure
  
  
• Static Assets - Land
  
  
• Active Assets - Mechanical, Electrical, Office equipment, Software, etc.

The principles are necessary for asset management software to be able to provide the required outputs across the asset life cycle.

• The Value-Added Principle - Asset delivers service that is valued by the customer, there is a minimum level of service below which the given service does not discern as added value.
  
  
• The Life Cycle Principle - All the goes through a recognizable life cycle, its recognition improves the appropriate management.
  
  
• Failure Management - Failure of an asset occurs when it cannot perform the required work according to its time, usage, and operating environment.
  
  
• The Total Cost of Ownership Principle - There is always a minimum optimal investment over the asset's life cycle to balance its performance and cost to its target level of service.

Elements of an Asset Management System

The asset management system includes a set of interrelated elements in an organization. These interacting elements function to establish an asset management policy and its objectives.

The elements of the asset management system are the set of tools such as policies, plans, business processes, and information systems, these are integrated to assure the delivery of asset management activities.

The asset management system acts as a means of coordination and interaction between the functional units of an organization.

An asset management system is a solution that includes the management of all the stakeholders, external service providers, links and integrations of an organization's activities and function that would rather be managed individually.

The establishing asset management process requires a thorough knowledge of its elements, policies, plans, and procedures that integrates it.

1. Objectives for Implementation

While implementing an asset management system, an organization needs to take care of several contexts. There are many factors that will affect the implementation of an asset management system in an organization.

The influence of stakeholders is the main factor for setting rules and for decision making and also helps in setting the organizational objectives, which will influence the design and scope of its asset management.

The factors other than stakeholders that will influence an organization are social, cultural, economic, financial, physical and many more environments and mission, vision, values, culture, the environment of an organization itself.

2. Key Decision Makers

Top decision-makers in an organization develop the asset management system related policies and objectives. So, the asset management system should align with the existing systems of the organization. Every organization has appointed the decision-makers for all the levels who plan, implement, and operate the asset management system.

The decision-makers and the leaders at all levels are responsible for the availability of the appropriate resources to plan and support the system. These resources will include funding, adequate and competent human resources, and information technology support.

The leaders should recognize and resolve all the conflicts between the environment and culture of the organization and the asset management system.

3. Planning and Targets

The keynote on which an organization tends to implement the asset management system is proper planning and setting targets to set out an asset management policy.

The accurate planning will help the organization in setting the objectives and describing the role of the system in meeting the appropriate targets. It will include the necessary structures, roles, and responsibilities to establish and operate the system efficiently. Its related issues can be continuous improvement, risk management, and stakeholder support.

4. Smooth Integration

On installation, the asset management system smoothly integrates with the existing systems in an organization and starts sharing the resources.

The size of the system can be large according to the size of the organization (quantity of employees and physical assets) and its operational complexity.

There come many difficulties in collecting, verifying, and consolidating asset data to transform it into asset information, and creating, controlling, and documenting this information is an important function of the asset management system. The digital asset management system is easy to implement, maintain, evaluate, and improve.

5. Implementation and Operation

For the implementation and operation of the asset management system, all the functional policies, technical standards, plans, and processes should be efficiently planned before time.

Operations would sometimes require planned changes in asset management procedures so that to introduce new risks. The operating will involve risk management and control in the context of managing overall changes.

6. Performance Evaluation

Evaluation of assets is a necessary part of any organization. The performance of an asset can be evaluated on any grounds direct, indirect, financial or non-financial.

The key to evaluating the performance of assets is the effective asset data management and the transformation of data to information. Monitoring, analyzing, evaluating asset information is a continuous process.

The evaluation of an asset should be done based on its overall performance rather than only according to asset management objectives. For an asset, its overall usage should be the parameter to analyze its performance.

7. Continuous Improvement

An asset management system is complex and continuously evolving (in terms of its context and objectives) process. Continuous improvement is a natural necessity despite living, object or mechanism.

Therefore, time to time improvement is also required by the asset management system as well. It is applicable to assets, asset management activities, and asset management systems with an asset's performance (its activities and processes).

All the asset-related incidents, unanticipated events, and emergency situations should be inspected and reviewed, to check on improvement, if needed by asset management system so that to prevent recurrence and reduce its effectiveness.

Also Read: Major Advantages & Importance of Fixed Asset Tracking Software

Conclusion:

The asset management system is needed because it helps an organization to monitor and manage their assets using a systematic approach.

The key elements of the asset management system help the system to work in synchronized form and efficiently.

As when the asset management system is managed efficiently, it will benefit in productivity and efficiency to place a business in a better position and get increased return on investment.