What is Asset Management?

Asset management is a process whereby a business manages assets as a way of maximizing financial return.  In addition to covering a variety of industries, asset management includes various functions, all heading toward the same goal.  For instance, a business involving computers may use this type of management to help keep track of software and hardware assets and monitor performance trends.  Another example would be the financial and investment industries, using asset management to oversee a corporate or individual portfolio.  Even an equipment company would benefit fro

Asset management is a process whereby a business manages assets as a way of maximizing financial return.  In addition to covering a variety of industries, asset management includes various functions, all heading toward the same goal.  For instance, a business involving computers may use this type of management to help keep track of software and hardware assets and monitor performance trends.  Another example would be the financial and investment industries, using asset management to oversee a corporate or individual portfolio.  Even an equipment company would benefit from asset management as a means of monitoring and analyzing the business and inventory.

No matter the industry or sector, the process of management involved includes keeping track of value, depreciation, ownership, and location.  The manager running this type of system would need to know what type of assets a company has, the value of those assets, loss of the assets specific to depreciation, theft, or even damage, and who is the official owner of the assets.  Along with this, the manager would maintain some type of database to keep track of the physical location for assets.  This allows a company to be in full operational mode, meet service and delivery demands, manage costs, and reduce or even eliminate any risk.

As you can see, asset management is critical to a company’s success.  In fact, asset management is regarded a critical component of organizations throughout the world, specifically those dealing with stock portfolios or IT.  Often, companies lose track of assets, which can be devastating to the business from the customer standpoint but also from a profit angle.  For instance, if you company were selling computer parts to large corporations around the world, success of that company would depend heavily on knowing the exact parts needed, whether they were in stock, the current value, and whether they could be found quickly if not within current inventory.

Let us say a company received an order from a customer whereby 1,000 PCB assemblies were needed.  Without having an efficient asset management system in place, the owner of that company might unknowingly sign a contract to deliver the order on a specific date.  However, as workers begin to gather the various items needed to fill the order they find only 800 PCB assemblies are available, there would be serious risk of losing the order but more importantly, the customer and any future business.

Not only would the company fall short of filling the initial order, but more than likely they would lose that customer as well, not to mention risk having their reputation hurt.  For this reason alone, having a good asset management system in place improves performance, enhances customer confidence and satisfaction, reduces risk legally, and allows the company to grow and thrive.  The benefits of using asset management are far too many to list but in general, a company has the opportunity to surpass the competition and come out a viable leader in the respected industry or sector.

The key to good asset management is having a good asset manager, a true professional qualified for and dedicated to the job.  This person would have the ability to manage operations, maintain a budget, oversee costs, conduct analysis, meet compliancy issues, provide a high level of performance, and so on.  In addition, a solid asset manager would be an excellent leader, someone capable of mentoring staff members so everyone communications and places priority where it belongs.