Structured processes that enhance clarity of information and enable the right actions at the right time are crucial for business growth—and asset management is one of those vital processes.
Asset management comprises aspects such as assigning custodians and locations, checking assets in/out, and reserving assets. It also involves the timely purchase, maintenance, and disposal of assets. Basically, the process helps manage the asset lifecycle from procurement to disposal to ensure optimal allocation and use of resources.
Many large organizations may have some sort of asset management practices in place—even if they are archaic manual methods. However, a staggering number of small businesses use manual methods of tracking or do not track assets at all.
In this article, we’ll emphasize why asset management is important and how you can use an automated asset management system to better organize and expedite your workflows. We will then talk about what an asset management system entails and the benefits of using one for your organization.
Why is asset management important?
Asset management is a fundamental process that helps businesses in sustaining operations. Whether a business owns 10 assets or perhaps 10,000, managing them on a daily basis can become challenging.
Without an accurate record of assets, a business or organization cannot allocate resources efficiently. The business or organization may tend to overstock or understock. It may also miss out on performing necessary maintenance to keep assets in optimal condition. Resultantly, a business or organization will not have the necessary information to make essential decisions along the lifecycle of an asset. This may mean that the business isn’t equipped to ensure the asset provides the highest possible return on investment.
For example, a university has 500 projectors for its campus. If the university lacks accurate records of all its projectors, along with information regarding their allocated locations, responsible parties, and maintenance schedules, it is likely to incur significant losses. The university may have high maintenance costs, experience productivity issues, and expend considerable time and effort in attempting to use the projectors optimally.
All of this would be much easier, if the university had an asset management process in place.
The importance of asset management in business or in an organization cannot be overstated, as it can profoundly help in various ways, such as:
- Better resource allocation – Information on where an asset is, who it is assigned to, and when it is due back in enables resources to be allocated efficiently, where they are needed most.
- Enhanced productivity – When assets are in the right place at the right time and are in optimal condition, this enhances productivity and prevents a halt in operations.
- Improving compliance and accountability – Recording asset details including depreciation, keeping maintenance records, and tracking the asset lifecycle can help meet industry and governmental regulations and promote accountability.
- Reducing costs – You can reduce costs related to over-purchasing, lost or stolen assets, and frequent asset breakdowns, which would lead to better financial performance overall.
- Enabling stronger, data-driven decisions – With clear asset information and streamlined workflows, businesses can obtain data regarding asset usage and lifecycle in order to make well-informed, data-driven decisions.
Now, let’s discuss how to accelerate and organize the whole process with an automated asset management system.
What is an asset management system?
Spreadsheets and paper records were great decades ago. Now that information technology has taken over, you can leverage a smarter system for tracking assets – an asset management solution that automates all processes.
According to research, the asset management solutions market is expected to experience a growth of 10.3% from 2023 to 2025. It is expected to exceed 27 billion USD by 2027 as more organizations jump on the bandwagon and seek a faster, more efficient way to track and manage their assets.
The asset management solution acts as a central repository for all your asset information and enables you to perform actions such as check assets in and out, reserve assets, assign locations and custodians, and schedule maintenance. You can also generate purchase orders, put them through an approval process, and set user roles to ensure data security and authorized use. Making essential information available to different stakeholders also enhances collaboration between departments.
Additionally, the asset management solution also provides full-fledged reports regarding asset usage and condition to enable key decision-makers to strategically plan their next move. Moving to an automated system helps businesses save valuable time and money, and increase efficiency in all asset-related processes.
What does an asset management system entail?
Asset management software offers various features that can be beneficial for businesses and organizations. Here are some important ones:
-> Barcode Scanning
Barcode asset tracking requires companies to design and assign asset tags in the form of barcodes that store crucial asset information. This information can include the asset name, location, custodian, depreciation, and other details.
Barcodes act as asset identifiers and can be used to perform quick asset actions. Scanning an asset’s barcode enables instant check in/out, retrieving asset information, and the correct placement of assets. This reduces asset loss and increases accountability.
For example, you can pull up information regarding an asset’s location, assignee, and due date by scanning an asset’s barcode, so you know who the asset belongs to and where to return it.
-> Custodian and Location Tracking
An asset management system enables you to assign assets to locations and custodians for streamlined resource allocation and higher accountability.
With this information, you will always know where your assets are, who is using them, and until when they will be in use. With full information regarding asset availability and placement, you can ensure you achieve the highest productivity levels and prevent disruptions in activity.
-> Check-Ins and Checkouts
The asset management system provides real-time visibility of assets through records of check-ins and checkouts. It enables businesses to hold employees accountable for asset usage and provides precise information regarding availability.
Basically, the check-in and check-out feature provides you with a clear view of who is using your assets and when they are due. Accordingly, this also enables companies to see when their assets will be unavailable so that they can make conflict-free reservations.
-> Inventory Management
Effective inventory management of supplies is about finding the right balance between meeting operational needs and minimizing costs. An asset management system ensures that an organization holds optimal stock levels at all times by enabling users to set high and low stock thresholds and get notifications whenever they are overstocking or understocking.
Users can send purchase orders to vendors and the system will automatically update inventory levels once you mark those orders as filled. They can also allocate inventory items to maintenance orders and generate reports regarding inventory usage.
-> Integrations
Users can integrate asset management systems with other software such as help desk solutions, data security and identity management solutions, and customer relationship management tools.
These integrations enable you to centralize all your data and prevent going through the tedious process of entering it into a new system. For example, by syncing a service desk software, you can create tickets for maintenance in your asset management system and have them automatically reflected in the service desk software to organize and expedite maintenance processes.
Benefits of an Asset Management System
It has been established that asset management is an important process and asset management systems have several features which help improve the process in comparison to using manual methods.
Here are some of the benefits of using an asset management system:
1. Real-time asset visibility
Businesses can get real-time visibility into the location, status, quantity, and custodianship of their assets instantaneously. Tracking technology such as barcodes, RFID, and QR codes enable businesses to label and scan different items in order to populate the asset database. They can then scan to perform actions and retrieve information when required.
Real-time asset visibility provides clear asset information at all times in order to facilitate strategic decisions.
2. Enhanced collaboration
An asset management system provides centralized information about assets that all team members can access instantly. For example, production teams can easily see asset availability and condition, while managers can make decisions regarding asset allocation.
The system also optimizes cross-functional collaboration where different teams, like procurement and finance, can align their strategies with information on asset lifecycles and purchase requests.
3. Custom insights
You can also run custom reports according to the requirements of your business. For example, if you want to analyze the performance of an excavator over the past year, you can simply run a report to do so.
The report will give you accurate insights on critical metrics like service costs, depreciation, and repairs. These reports can be used to make business decisions to upgrade or replace assets.
4. User accountability
An asset management system helps ensure user accountability by limiting user access to asset information and permissions to take action on assets. This ensures that only authorized personnel can take certain actions on assets and view specific information.
Additionally, asset management systems record all user actions to avoid issues related to asset use. Asset custodians can also be held accountable for returning assets timely and the after-use condition of assets.
Asset Management for Your Business
Whether in manufacturing, finance, healthcare, or any other sector, the meticulous oversight and strategic optimization of assets contribute directly to organizational success. As businesses navigate the complexities of today’s global markets, the ability to make informed decisions about acquisitions, maintenance, and disposal of assets becomes a competitive advantage. Therefore, every organization and business should have effective asset management processes in place.
EZOfficeInventory provides a robust platform for asset tracking, maintenance, and inventory management–helping you reduce business costs and optimize processes for a higher ROI.
Frequently Asked Questions (FAQs)
1. How can we improve asset management?
To improve asset management, it is important to understand why the asset is used, what condition it is in, and how it is being utilized. You should also identify when the asset needs to be used and devise a maintenance routine accordingly to ensure that production is not halted due to the asset’s unavailability and the asset is generating the highest possible ROI. You should also calculate an asset’s depreciation and determine when it is time to dispose of the asset. An asset management solution can help you organize all of this information and make these decisions in a timely manner.
2. What is the main purpose of asset management?
The main purpose of asset management is to enable clear visibility into all asset-related information, reduce costs and the time and effort spent on the allocation of resources, and ensure the optimal use of assets throughout their lifecycle.
3. What are the advantages of asset management?
Asset management has multiple advantages. It helps in optimizing resource allocation, ensures compliance, prevents loss and theft, and prolongs the lifespan of assets.
