WHAT IS ASSET MANAGEMENT?
In this post i am going to discuss asset management topics i have discussed are what is asset management types of asset management development of a strategic asset management plan importance of asset management benefits of automating asset management and popular asset management tools let’s read this post asset management remains to be one of the primary concerns of organizations all over the world because assets drive business modern businesses rely heavily on physical assets to sustain effectively asset management process also helps businesses derive more value from an asset and achieve business goals so what is asset management asset management refers to the process of developing operating maintaining and selling assets in a cost effective manner
Every company needs to keep track of its assets that way its stakeholders will know which assets are available to be employed to provide optimal returns the assets owned by any business fall into two main categories fixed assets and current assets, fixed or non current assets refer to assets acquired for long term use while current assets are those that can be converted into cash within a short amount of time. types of asset management we can vastly classify it into three types physical asset management financial asset management and contractual asset management.
1: Physical asset management stands for the process of handling things like fixed asset management inventory management infrastructure and public asset management.
2: Financial asset management refers to the process of managing procurement development an investment strategy controlling budget and costs handling cash bonds and stocks.
3: Contractual compliance streamlines processes like it asset management digital asset management contractual maintenance and management of intangible assets.
Now come to development of strategic asset management plan to manage the assets effectively a firm owner needs to develop a strategic plan
Step 1: complete an asset inventory first an owner needs to take count of all the assets that he owns if he is not aware of the exact number of assets in his inventory then he won’t manage them effectively when preparing an inventory of company assets the following should be included total number of assets the value of each asset when the assets were boyght and the expected life cycles of the assets.
Step 2: compute lifecycle costs, if a business owner wants his assets management plan to be correct then he should calculate the entire lifecycle costs of each asset many company owners make the mistake of calculating only the initial purchase costs during the assets life cycle additional costs are likely to come up such as maintenance expenses condition and performance modeling as well as disposal costs.
Step 3: set levels of service after computing lifecycle costs next step is to set levels of service it means describing the overall quality capacity and role of the different services that the assets provide in doing so a firms owner can then determine the operating maintenance and renewal activities needed the assets in healthy condition.
Step 4: exercise long term financial planning ideally the asset management process that a firm owner adapts should easily translate into long term financial plans with a good financial plan in place the owner can then assess which objectives are workable and which ones need to be prioritized.
IMPORTANCE OF ASSET MANAGEMENT
1: enables a firm to account for all of its assets the process makes it easy for organizations to keep track of their assets whether liquid asset or fixed firm owners will know where assets are located how they are being put to use and whether there have been changes made to them.
2: helps identify and manage risks asset management involves the identification and management of risks that arise from the utilization and ownership of certain assets it means that a firm will always be prepared to manage any risk that comes its way.
3: removes ghost assets in the company inventory with a strategic asset management plan the firm’s owner will be aware of the assets that have been lost damaged or stolen and will eliminate them from the books.
