Asset management is a best practice that refers to a system where valuable things such as items or other kinds of entities are monitored for maintenance. Asset management is a best practice that can be applicable to both tangible and intangible assets.
Another way of defining asset management is that it is a best practice that involves monitoring operating, maintenance and upgrades of the asset in a cost effective way. It is considered to be a managing practice with the objective to provide the best services for users of that particular asset at the lowest possible cost.
Compliance with asset management plan is also a recommended best practice for maximizing assets. It is defined as a strategic plan that is meant for managing the infrastructure of an organization. Characteristically, an Asset Management Plan covers more than one asset, and takes a systematic approach. This is specifically required when many assets work together as co-dependent assets to deliver the expected standards.
Benefits of Asset Management
There are some very essential benefits of asset management, and these include the following best practices:
- Life span of the asset increases with maintenance, repairs, replacements and rehabilitation
- Meeting customer demands becomes sustainable
- Based on the good condition of assets, rates for products and services can be done with effective financial planning best practices
- Budgeting based on critical sustainable performance is possible with asset management
- Asset management makes it possible to meet service expectations and standard requirements
- It improves capacity of responding to emergencies with best practices
- Security and safety also improves when assets are in good condition
Challenges with Asset Management
There are some challenges that come with the best practice of asset management.
- Determining the right time for performing maintenance, repair and replacement
- As demand increases, maintenance of the asset becomes tougher
- Sometimes it becomes difficult to overcome resistance to increase in rates
- Assets are predisposed to diminishing resources
- Meeting the raising expectations of customers becomes difficult
- Meeting the strict requirements for standards becomes difficult with time
- Protecting the asset from failure is almost impossible
Implementing Compliance with Asset Management
The best practice of implementing compliance with asset management in organization is not easy. It requires a strategic approach and easy transformation process. There are some key question managers and CEOs must ask themselves.
- What are the current assets of the company
- What is the level of service required to be met by the asset or assets
- What are the critical assets
- What will be the minimum life cycle cost of the asset
- What is the long term funding plan for asset management
Recommended Best Practices
Managers ensuring compliance with asset management must make the following best practices part of their routine:
- Prepare a system map and asset inventory
- Prepare a rating and assessment system to evaluate the assets
- Evaluate the residual useful life of the asset
- Determine the value of the asset in relation to replacement cost
Compliance with asset management is a crucial best practice.