Tracking assets is one of the most fundamental processes that every business needs to streamline for sustainable operations. Whether your business owns 20 assets or 2,000 assets, managing them on a day-to-day basis can be a real struggle.
Businesses require strong asset control to elevate their asset management and remain organized. Asset management includes tracking key information about your assets, including their location, custodian, usage patterns, depreciation, and more – a process improved if you are able to control assets better.
This article elaborates on asset control as a practice and ways to select a high-functioning asset control system.
What is asset control?
Imagine, your business has thousands of assets spread across 50 locations. You operate as a construction group and move these assets to different construction sites on a daily basis. Locating them using a manual system can be a grueling task — result: lost, stolen, and misplaced assets.
With asset control, you can track and monitor assets including their quantity, owner, and lifecycle. You can track where, in what condition, and in whose custody your assets are.
An asset control system helps make decisions regarding re-allocating assets that are not being utilized to their full potential. For instance, disposing of obsolete and non-functional assets.
Basically, asset control ensures that all the business assets are well-accounted for and used effectively.
Importance of asset control
One of the several purposes of asset control is to improve the performance of assets, ensuring they are neither underutilized nor overutilized. The end goal is to enhance the performance of assets, improve asset tracking, and put assets to specialized use. Without a good asset control plan, chances are your business will develop unaccounted-for and ill-maintained assets.
Let’s look at some ways, your business can benefit from implementing asset control using an asset control solution:
-> Improved workplace collaboration
Every business has a different operational need that has to be addressed with quality communication and collaboration. All staff must have access to asset data to utilize it to their advantage. To allow this, it is advisable for businesses to have a centralized repository for data to make asset details easily accessible.
This level of accessibility enables cross-collaboration between teams. For example, the Finance manager will require asset data to assess asset depreciation while the Operations manager will require the same information to see if the assets need maintenance or repair.
-> Increased project management
With efficient asset control, you can assess what assets will be required for a project, so you can check their availability and reserve them in advance. Your business can design timely strategies to better execute the projects with excellence. This also helps ensure that you are meeting the particular project needs by ensuring assets are available.
-> Improved decision making
You can significantly strengthen your decision-making regarding assets by extracting data on asset performance and utilization patterns. Reports are a helpful way to ensure this.
You will be well-informed about the condition of your assets so that you can take corrective action if required. For instance, your forklifts might be experiencing consistent breakdowns. By keeping its data updated and conducting regular inspections, you will be aware of the reason behind the asset failure at a glance.
-> Optimal asset use
Asset control helps in effectively allocating resources based on what resources are available and where. By knowing the exact location of assets, you can always put your assets to good use and make sure that they are not sitting idly. Inventory and asset levels will be well-maintained so if an asset is out of stock, your operations team can make new purchases at the earliest. Likewise, orders for new inventory can be placed automatically if certain items fall below a certain threshold.
This helps in optimally utilizing the available resources without procuring new ones.
Here’s an infographic elaborating on the benefits of asset control:
Top 3 challenges in managing assets
Asset control is an important yet increasingly overlooked element of asset management. Businesses are often faced with several challenges when it comes to managing assets. For instance, asset misappropriation accounts for 86% of fraud cases reported at the workplace. This misappropriation can be avoided if businesses have a consolidated asset management system in place.
Here are some common challenges businesses typically face in managing assets effectively:
-> Data accuracy
Asset management is increasingly reliant on accurate and up-to-date data to manage and optimize the use of assets. Without the right data, businesses are prone to misallocating resources. For example, allocating the wrong resources to an unrelated department – leading to unnecessary purchases and high procurement costs.
If you are unable to recognize the asset requirement of each division of your business, chances are you will end up with duplicate assets. The decision to procure new assets relies on forecasting beforehand so the data can be updated timely.
-> Compliance risks
Businesses have to comply with industry standards to ensure that they operate as per the regulations. Different kinds of assets require different regulatory requirements – for instance, physical assets need to be maintained while digital assets might require software updates. Likewise, following the Healthcare Insurance Portability and Accountability Act (HIPPA) regulations is critical for healthcare units and General Data Protection Regulation (GDPR) compliance is important for all organizations. Keeping your assets aligned – throughout their lifecycle – with these ever-evolving requirements can be challenging and time-consuming.
Regular training, deployment of efficient asset management systems, and revisiting regulations and policies every now and then are some ways businesses can overcome compliance risks.
-> Asset obsolescence
Worn-out assets complicate and delay business processes. Sudden breakdowns halt everyday operations, requiring immediate repairs that can be costly. This majorly happens when businesses have a manual or no system to assess their asset performance and condition periodically. Technological and physical obsolescence can render an asset useless. For instance, a vehicle can cost a business considerably if it has depreciated significantly and is not in good working condition.
Managing such assets can be a real struggle because it is difficult to predict when and how much value an asset will lose overtime. Similarly, replacing obsolete assets can incur hefty costs for businesses, and if the assets are used despite extensive wear and tear, they become non-compliant – leading to legal fines. Overall, asset obsolescence is a financial, operational and regulatory risk for businesses requiring careful planning and forecasting.
Factors to look for in an asset control management system
Considering the challenges listed above, the question arises, how to avoid these problems? The answer is simple: use an asset control system! Such a system comes equipped with capabilities that enable efficient asset management control.
You manage your assets better by leveraging an automated asset control system. It can be a cloud-based system allowing you to store large amounts of asset data with the ability to conduct various actions, such as checking where and in what condition an asset is located.
Leading world organizations are already shifting to cloud-based platforms. According to the International Data Corporation, the spending on public cloud services is likely to experience a compound annual growth rate (CAGR) of 19.9% from 2023-2027 with software being one of the largest sectors accounting for $326 billion in cloud spending.
There are some factors that you should consider when looking to adopt a system to control and manage your assets. Factors include:
1. Flexibility
Businesses scale with time which necessitates the management of a wide variety and high volume of assets. The system should be compatible with the growing needs of your business and allow you to identify and categorize vast amounts of data. For instance, create groups for different types of assets and inventory items based on the business type.
Additionally, a system that offers customizations to personalize the interface experience helps businesses optimize their operations better. This includes creating custom fields to enter specific data, so users can add all the essential information into the system regarding an asset. Customizability allows businesses to achieve higher levels of compliance by catering to their particular needs.
One of the major reasons why a large number of businesses are adopting cloud-based systems is the sheer freedom to scale up and down without significantly investing in in-house infrastructures. In-house systems can be less flexible and more costly curbing a business’s ability to tailor their operations when needed. So, a flexible system is the best solution to streamline your daily operations.
2. Loss prevention
Data loss is a contributing factor to deciding where and how to store your asset data. Storing data in office computers means it is susceptible to loss and theft. As per a 2021 data risk report, 33% of office folders are accessible to all employees. This means office systems have weak access controls making unauthorized access convenient and undetectable.
Asset data is highly sensitive and if in the wrong hands can be severely misused. Consider how 1000 employees working in your business can access and possibly change your equipment data on a daily basis creating confusion in daily operations.
Investment in a system that is based on the cloud but offers a consolidated platform to store all asset data is a viable solution to this security conundrum. Such systems normally have embedded security features, such as OTP-based sign-in, password protection, and GDPR regulations to prevent data theft and loss. Access controls are granted to the administrators which can be role-based so only authorized personnel can access the data.
This way, data breaches can be avoided and all data can be kept safe.
3. Cost-effectiveness
Cost is one the most critical determining factors of asset management as it directly impacts the ROI of businesses. Assessing different types of costs helps businesses decide what asset control system would suit their needs the best. Costs are associated with setting up the system and upgrading in case a business expands.
Several available systems offer different packages based on the feature complexity and the number of assets you want to track. You can choose a package that is in accordance with your workload, asset count, and operational needs. You can even request custom features at an additional cost.
A system that falls within your budget and meets your day-to-day asset management needs would be the best choice.
4. Advanced reporting
Most cloud-based systems offer reporting capabilities that allow you to visually present and understand your data. You can easily consolidate large volumes of asset data into comprehensive reports that can be used to guide critical decisions. These real-time reports can include a variety of details, such as available assets, consumed inventory, depreciation and more.
You can also customize reports to cater to a specific need and/or goal. These reports can be tailored to account for different aspects of asset management. Graphs, charts, and other visual aids can be created that help improve presentation of data for stakeholders.
These reports allow businesses to assess their performance against the set Key Performance Indicators (KPIs). Trends can be used to forecast future performance and corrective action can be taken if particular assets are not performing well.
Advanced reporting not only allows businesses to analyze trends and stay updated with asset performance but also helps businesses generate meaningful insights that support decision-making.
Conclusion
Effective asset control serves as a foundational stone to streamlined business operations. An asset control system that prevents asset loss, provides maximum flexibility, and optimizes asset performance is likely to be efficient and productive.
You can save time and significantly reduce costs if you improve your asset control practices. Stay updated with the dynamic business environment and make informed decisions using an asset control software!
Frequently Asked Questions (FAQs)
1. What is an asset control software?
Asset control software also referred to as asset management software allows businesses to manage and control assets efficiently. It helps consolidate data into a centralized platform to track and monitor all types of assets.
2. What are asset control techniques?
There are multiple asset control techniques that help businesses optimize the lifecycle of their assets. Techniques include asset tagging, asset tracking, user access control, lifecycle management, and regular audits.
3. What is the purpose of asset control software?
Asset control software helps businesses plan, monitor, track, and dispose of assets in a manner that maximizes productivity. Asset control provides a systematic approach to handling a wide variety of assets and strategically planning their management for improved efficiency.
