Asset management is a practice meant to enhance an organization’s efficiency and accountability. It is a broad term, referring to management of all resources owned or controlled by a business to generate cash flows, whether tangible or intangible. It involves assessing assets owned by a business to ascertain whether they are helping the firm achieve its financial goals, determining whether these assets can help the organization reach its future goals, the risks associated with these assets and predicting their lifespan and salvage values. This process occurs in every department, and at every seniority level; from the senior management to the janitorial staff. Asset management practices are beneficial to all businesses, including both large corporations and small-medium enterprises.
Asset classification
The type of asset management protocols used by a business for a certain asset is dependent on the nature of that specific asset. The first differentiation between assets is current and noncurrent assets. Solvable assets that can be easily converted to cash are considered current assets. IT equipment also falls under non-current assets. Conversely, non-current assets refer to long-term goods which are not easily cashable. This includes assets such as real estate, machinery and trademarks.
The distinction between cashable and non-cashable assets is also important because it plays a crucial role in determining a company’s net worth. In financially precarious situations, firms depend on an accurate database to make accurate estimates about their solvency levels. Additionally, when asset stock is classified into operating and non-operating sections, organizations can better predict revenues and productivity levels.
Asset management types
The kind of asset management program a company invests in depends on its needs and the specific nature of the industry it competes in. For example, a company that operates by making deliveries to its customers will have a greater need for an asset management system that includes GPS tracking. Forms of asset management different companies may need include:
1. Digital asset management
Digital asset management (DAM) refers to the efficient organization and storage of digital media content. The purpose of DAM software is to create an enhanced digital library that streamlines all digital assets in a way that enables quick and easy file access, cuts operational costs, improves asset security, and integrates all files with a businesses wider tech system. DAM is most likely to be utilized by businesses in the media, marketing, retail, healthcare, education, manufacturing, technology and public sectors.
2. IT asset management
ITAM is used for the end-to-end tracking and management of IT assets to ensure the proper use, maintenance, upgradation and disposal of IT assets. A properly utilized ITAM solution uses financial, contractual, and inventory information to track and maintain data that can be used to facilitate strategic decision making, and optimize the use of IT assets. According to a 2023 report by Crayon, 90% of businesses consider IT cost optimization a high priority. With technology becoming more ubiquitous in all fields, most businesses are likely to need an ITAM strategy that is designed for their own specific goals. ITAM encompasses several subcategories. These are applied, depending on the type of asset that needs to be managed or the type of value a business is trying to derive from it. They include software asset management, hardware asset management, lifecycle management, financial management, contract management, risk management, compliance management, security management and performance management.
3. Enterprise asset management
Enterprise Asset Management (EAM) manages the lifecycle of tangible, physical assets (such as railroads, pipelines, manufacturing equipment or transport fleets) similarly to how ITAM manages IT assets. EAM helps organizations track, assess, manage and optimize asset quality and reliability. This makes EAM highly useful for firms in the manufacturing, energy, transportation, logistics, healthcare, telecommunication and public sectors.
4. Network asset management
Network Asset Management (NAM) creates and maintains an inventory of all network components. This includes workstations, switches, routers, modems, printers and any device that is attached to a network. Any business that needs to oversee complex network infrastructure can benefit from NAM, including sectors like telecommunications, IT, utilities, finance, healthcare and education sectors.
5. Data center asset management
Data center asset management (DCAM) revolves around the management of assets falling within a company’s data center environment. This includes assets such as servers, storage devices, networking equipment, cooling systems and other devices supporting data center operations. A DCAM strategy includes tasks such as rack positioning, capacity planning, monitoring environmental conditions, and ensuring the efficient use of space and resources. It can be particularly useful for any kind of large corporation that needs a data center to support their IT infrastructure.
6. Cloud asset management
Cloud Asset Management (CAM) focuses on tracking and monitoring resources related to the delivery of cloud services. This can include virtual or physical storage, virtual or physical servers and software licenses. CAM can improve the security of cloud-based assets, save time on asset tracking, improve inventory accuracy, and makes asset data more easily available. CAM can be utilized by any business that is heavily reliant on cloud infrastructure to run their operations, such as organizations in the technology, e-commerce, media, and logistics sectors.
7. Endpoint management
Endpoint management is a policy-based control of networked PCs and other devices. It is meant to maintain functionality and safeguard assets from cyberthreats. Apart from security, endpoint management policies focus on the user experience. A good endpoint management policy minimizes compute-intensive encryption, repeated reboots or other hurdles which could push users to bypass security protocols. Endpoint management is critical for businesses that need to secure, monitor and manage a large number of devices such as the finance, healthcare, retail, education and technology sectors.
8. Configuration management
Configuration management is the management of IT asset configurations throughout their lifecycle. It involves activities such as configuration identification, configuration control, configuration status accounting and configuration audits. Its goal is to ensure the integrity, consistency and traceability of IT configurations, facilitate change management, support incident resolution and enable efficient decision making. Any business that needs to ensure consistency and reliability over their IT infrastructure and services can benefit from configuration management. This could include SaaS providers, telecommunications, e-commerce and the education sectors.
IT asset management vs asset management
ITAM is a subcategory of broader asset management that relates to IT assets being used by an organization. Common examples of IT assets include laptops and PCs, printers, monitors, servers, drives and also non-physical assets such as software licenses. As Asset Management is meant to increase efficiency and accountability, ITAM does this for a company’s IT infrastructure by controlling costs, ensuring license compliance, mitigating cybersecurity concerns and facilitating the delivery of IT services.
ITAM also requires specific components, such as SAM modules, ITSM platforms, and configuration management databases. Asset Management requires a more varied skill set depending on the specific asset being managed. It may utilize Enterprise Asset Management software, Enterprise Resource Planning, financial management software, and other tools. While both ITAM and Asset Management aim to optimize asset utilization, ITAM also has specific objectives related to IT cost control, license compliance and efficient IT service delivery.
Compliance requirements also differ greatly between IT and non-IT assets, creating further distinction between asset management and ITAM. IT assets come with key metrics that businesses have to comply with. When these protocols are violated, the company can be subject to severe penalties and hefty fines from software vendors, along with suffering damage to its reputation. This is why license management is an important part of ITAM. To employ any software, a business has to have legal permission to use it. Hardware devices are required to meet certain certifications. Basic certification symbols tell businesses how an appliance can be used. Legal compliance requirements have to be met by both users and manufacturers of an appliance.
To summarize, ITAM and asset management share some similarities in terms of resource management. What makes them different is scope, the nature of the assets they oversee, and overall objectives.
General asset management vs ITAM use case comparison
Most firms would need to use both general asset management and ITAM to fully optimize their business. As an example, let’s say an IT company needs to manage all of its assets which includes general assets like office furniture, vehicles, patents and real estate along with IT assets such as computers, software licenses and network equipment.
To optimize general asset management, the company would use a general asset management strategy. The process for this would include:
- Inventorying assets in a comprehensive list
- Managing the entire lifecycle of every asset from the acquisition to disposal stage
- Regular maintenance scheduling
- Depreciation tracking for financial reporting and tax purposes
- Ensuring compliance with relevant organizations
- Conducting regular audits
In comparison, the processes for managing IT assets through an ITAM strategy would be different. They would include:
- Inventorying all IT hardware
- Tracking software usage to ensure compliance with licensing agreements
- Create and maintain records of hardware-software configurations to support IT activities and facilitate troubleshooting
- Managing the entire lifecycle of every IT asset from the acquisition to disposal stage
- Implementing security measures to protect IT assets and confidential company data
- Ensure compliance with IT policies and regulations
The differences between ITAM and general asset management are further highlighted in table below:
| General Asset Management | ITAM | |
| Scope | Covers all assets within an organization | Only covers IT assets |
| Objectives | Aims to optimize the use and value of all assets | Supports IT-related objectives and improves IT-service delivery while ensuring security, compliance and efficiency for IT assets |
| Processes | Involves physical maintenance, depreciation tracking and general compliance | Involves more IT-specific processes like software license management, configuration management, and IT security |
Conclusion
Businesses of any size utilize a large number of assets to conduct streamlined operations. Any business entity’s Return on Investment depends on optimized asset utilization, making asset management crucial for expansion.
Firms aiming to achieve higher levels of efficiency and productivity need to optimize both IT and non-IT assets through a precisely designed asset management strategy. Most businesses, whether large or small-medium, can benefit greatly from centralized databases, in-depth analysis reports and performance indicators for their assets. These help identify potentially loss-generating shortcomings and set future goals.
Frequently Asked Questions
What is IT asset lifecycle management?
IT asset lifecycle management is a framework through which an organization’s IT assets are monitored and managed from the point in time when they are acquired until end of service. IT asset lifecycle management leads to optimized costs and efficient asset performance.
What are the three pillars of asset management?
A well-executed asset management policy focuses on inventorying, assessing conditions and hazards, and asset maintenance.
Why is asset management important?
Asset management enables businesses to optimize the utilization and performance of their IT and non-IT assets. This leads to reduced costs, operational efficiency and enhanced decision making.
