Asset management

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Asset management is a systematic approach to the governance and realization of all value for which a group or entity is responsible. It may apply both to tangible assets (physical objects such as complex process or manufacturing plants, infrastructure, buildings or equipment) and to intangible assets (such as intellectual property, goodwill or financial assets). Asset management is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-effective manner (including all costs, risks, and performance attributes). [1]

Contents

Theory of asset management primarily deals with the periodic matter of improving, maintaining or in other circumstances assuring the economic and capital value of an asset over time. [2] The term is commonly used in engineering, the business world, and public infrastructure sectors to ensure a coordinated approach to the optimization of costs, risks, service/performance, and sustainability. The term has traditionally been used in the financial sector to describe people and companies who manage investments on behalf of others. Those include, for example, investment managers who manage the assets of a pension fund.

The ISO 55000 series of standards, developed by ISO TC 251, are the international standards for Asset Management. ISO 55000 provides an introduction and requirements specification for a management system for asset management. The ISO 55000 standard defines an asset as an "item, thing or entity that has potential or actual value to an organization". ISO 55001 specifies requirements for an asset management system within the context of the organization, and ISO 55002 gives guidelines for the application of an asset management system, in accordance with the requirements of ISO 55001.

By industry

Financial asset management

The most frequent usage of the term portfolio manager (asset manager) refers to investment management, the sector of the financial services industry that manages investment funds and segregated client accounts. Asset management is part of a financial company that employs experts who manage money and handle the investments of clients. This is done either actively or passively.

Physical and Infrastructure asset management

Physical and Infrastructure asset management is the combination of management, financial, economic, engineering, and other practices applied to physical assets to provide the best value level of service for the costs involved. It includes the management of the entire life cycle—including design, construction, commissioning, operating, maintaining, repairing, modifying, replacing, and decommissioning/disposal—of physical and infrastructure assets. [3] Operation and maintenance of assets in a constrained budget environment require a prioritization scheme. As a way of illustration, the recent development of renewable energy has seen the rise of effective asset managers involved in the management of solar systems (solar parks, rooftops, and windmills). These teams often collaborate with financial asset managers in order to offer turnkey solutions to investors.

Infrastructure asset management became very important in most of the developed countries in the 21st century, since their infrastructure network was almost completed in the 20th century and they have to manage to operate and maintain them cost-effectively. [4]

Physical, or Infrastructure Asset Management is a growing specialist engineering discipline, with many international technical societies now established to advance knowledge in this area, including the Engineers Australia technical society of the Asset Management Council (AMC), [5] the World Partners in Asset Management (WPiAM), [6] Society for Maintenance and Reliability Professionals (SMRP), [7] the Institute of Asset Management (IAM), [8] the International Society of Engineering Asset Management (ISEAM), [9] and the Global Forum on Maintenance and Asset Management (GFMAM). [10]

Engineering asset management

Engineering asset management [11] is a more recent term that is used to describe the management of complex physical assets, a specific engineering practice that is concerned with optimizing assets, in the context of the organizations goals and objectives, through using multidiscipline engineering methodologies, and Terotechnology (which includes management, engineering, and financial expertise), to balance cost, risk, and performance. Engineering asset management includes multiple engineering disciplines, including but not limited to Maintenance engineering, Systems engineering, Reliability engineering, Process safety management, Industrial engineering, and Risk analysis (engineering). Engineering asset management is a term synonymous with physical and infrastructure asset management, it is used to describe management of more complex physical assets which require the application of specialist asset management engineering methods over their life-cycles in order to maximize value for their owners, whilst keeping risk to an acceptable level.

Software asset management

Software asset management is one kind of infrastructure asset management.

International Standard series on Asset Management

The International Organization for Standardization published its management system standard for asset management in 2014. [12] The ISO 55000 series provides terminology, requirements, and guidance for implementing, maintaining and improving an effective asset management system. The key to forming a structure of this sort is directly connected to local governance.

Enterprise asset management

Enterprise asset management (EAM) systems are asset information systems that support the management of an organization's assets. An EAM includes an asset registry (inventory of assets and their attributes) combined with a computerized maintenance management system (CMMS) and other modules (such as inventory or materials management). Assets that are geographically distributed, interconnected or networked, are often also represented through the use of geographic information systems (GIS).

GIS-centric asset registry standardizes data and improves interoperability, providing users the capability to reuse, coordinate, and share information efficiently and effectively. A GIS platform combined with information of both the "hard" and "soft" assets helps to remove the traditional silos of departmental functions. While the hard assets are the typical physical assets or infrastructure assets, the soft assets might include permits, licenses, brands, patents, right-of-ways, and other entitlements or valued items.

The EAM system is only one of the 'enablers' of good asset management. Asset managers need to make informed decisions to fulfill their organizational goals, this requires good asset information but also leadership, clarity of strategic priorities, competencies, inter-departmental collaboration and communications, workforce, and supply chain engagement, risk and change management systems, performance monitoring, and continual improvement.

Public asset management

Public asset management expands the definition of enterprise asset management (EAM) by incorporating the management of all things of value to a municipal jurisdiction and its citizens' expectations. An example in which public asset management is used is land-use development and planning.

Intellectual and non-physical asset management

Increasingly both consumers and organizations use assets, e.g. software, music, books, etc. where the user's rights are constrained by a license agreement. An asset management system would identify the constraints upon such licenses, e.g. a period. If, for example, one licenses software, often the license is for a given period. Adobe and Microsoft both offer time-based software licenses. In both the corporate and consumer worlds, there is a distinction between software ownership and the updating of software. One may own a version of the software, but not newer versions of the software. Cellular phones are often not updated by vendors, in an attempt to force a purchase of newer hardware. Large companies such as Oracle, that license software to clients distinguish between the right to use and the right to receive maintenance/support. [13]

See also

Related Research Articles

Professional certification, trade certification, or professional designation, often called simply certification or qualification, is a designation earned by a person to assure qualification to perform a job or task. Not all certifications that use post-nominal letters are an acknowledgement of educational achievement, or an agency appointed to safeguard the public interest.

Project management is the process of leading the work of a team to achieve all project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. The primary constraints are scope, time, and budget. The secondary challenge is to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives.

<span class="mw-page-title-main">Risk management</span> Identification, evaluation and control of risks

Risk management is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.

<span class="mw-page-title-main">Configuration management</span> Process for maintaining consistency of a product attributes with its design

Configuration management (CM) is a systems engineering process for establishing and maintaining consistency of a product's performance, functional, and physical attributes with its requirements, design, and operational information throughout its life. The CM process is widely used by military engineering organizations to manage changes throughout the system lifecycle of complex systems, such as weapon systems, military vehicles, and information systems. Outside the military, the CM process is also used with IT service management as defined by ITIL, and with other domain models in the civil engineering and other industrial engineering segments such as roads, bridges, canals, dams, and buildings.

<span class="mw-page-title-main">Infrastructure</span> Facilities and systems serving society

Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and private physical structures such as roads, railways, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications. In general, infrastructure has been defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions" and maintain the surrounding environment.

<span class="mw-page-title-main">Project manager</span> Professional in the field of project management

A project manager is a professional in the field of project management. Project managers have the responsibility of the planning, procurement and execution of a project, in any undertaking that has a defined scope, defined start and a defined finish; regardless of industry. Project managers are first point of contact for any issues or discrepancies arising from within the heads of various departments in an organization before the problem escalates to higher authorities, as project representative.

<span class="mw-page-title-main">Public–private partnership</span> Government/private company partnership

A public–private partnership is a long-term arrangement between a government and private sector institutions. Typically, it involves private capital financing government projects and services up-front, and then drawing revenues from taxpayers and/or users for profit over the course of the PPP contract. Public–private partnerships have been implemented in multiple countries and are primarily used for infrastructure projects. Although they are not necessary, PPPs have been employed for building, equipping, operating and maintaining schools, hospitals, transport systems, and water and sewerage systems.

Facility management or facilities management (FM) is a professional management discipline focused on the efficient and effective delivery of logistics and other support services related to real property and buildings. It encompasses multiple disciplines to ensure functionality, comfort, safety and efficiency of the built environment by integrating people, place, process and technology, as defined by the International Organization for Standardization (ISO). The profession is certified through Global Facility Management Association member organizations.

In the context of software engineering, software quality refers to two related but distinct notions:

Enterprise asset management (EAM) involves the management of the maintenance of physical assets of an organization throughout each asset's lifecycle. EAM is used to plan, optimize, execute, and track the needed maintenance activities with the associated priorities, skills, materials, tools, and information. This covers the design, construction, commissioning, operations, maintenance and decommissioning or replacement of plant, equipment and facilities.

Fixed assets management is an accounting process that seeks to track fixed assets for the purposes of financial accounting, preventive maintenance, and theft deterrence.

Information security standards or cyber security standards are techniques generally outlined in published materials that attempt to protect the cyber environment of a user or organization. This environment includes users themselves, networks, devices, all software, processes, information in storage or transit, applications, services, and systems that can be connected directly or indirectly to networks.

Software asset management (SAM) is a business practice that involves managing and optimizing the purchase, deployment, maintenance, utilization, and disposal of software applications within an organization. According to ITIL, SAM is defined as “…all of the infrastructure and processes necessary for the effective management, control, and protection of the software assets…throughout all stages of their lifecycle.” Fundamentally intended to be part of an organization's information technology business strategy, the goals of SAM are to reduce information technology (IT) costs and limit business and legal risk related to the ownership and use of software, while maximizing IT responsiveness and end-user productivity. SAM is particularly important for large corporations regarding redistribution of licenses and managing legal risks associated with software ownership and expiration. SAM technologies track license expiration, thus allowing the company to function ethically and within software compliance regulations. This can be important for both eliminating legal costs associated with license agreement violations and as part of a company's reputation management strategy. Both are important forms of risk management and are critical for large corporations' long-term business strategies.

International standards in the ISO/IEC 19770 family of standards for IT asset management address both the processes and technology for managing software assets and related IT assets. Broadly speaking, the standard family belongs to the set of Software Asset Management standards and is integrated with other Management System Standards.

Information technology risk, IT risk, IT-related risk, or cyber risk is any risk relating to information technology. While information has long been appreciated as a valuable and important asset, the rise of the knowledge economy and the Digital Revolution has led to organizations becoming increasingly dependent on information, information processing and especially IT. Various events or incidents that compromise IT in some way can therefore cause adverse impacts on the organization's business processes or mission, ranging from inconsequential to catastrophic in scale.

ISO 55000 is an international standard covering management of assets of any kind. Before it, a Publicly Available Specification was published by the British Standards Institution in 2004 for physical assets. The ISO 55000 series of Asset Management standards was launched in January 2014.

Mobile enterprise asset management refers to the mobile extension of work processes for maintenance, operations, and repair of corporate or public-entity physical assets, equipment, buildings, and grounds. It involves the management of work orders via communication between a mobilized workforce and computer systems to maintain an organization's facilities, structures, and other assets.

<span class="mw-page-title-main">Infrastructure asset management</span> Maintenance of public infrastructure assets

Infrastructure asset management is the integrated, multidisciplinary set of strategies in sustaining public infrastructure assets such as water treatment facilities, sewer lines, roads, utility grids, bridges, and railways. Generally, the process focuses on the later stages of a facility's life cycle, specifically maintenance, rehabilitation, and replacement. Asset management specifically uses software tools to organize and implement these strategies with the fundamental goal to preserve and extend the service life of long-term infrastructure assets which are vital underlying components in maintaining the quality of life in society and efficiency in the economy. In the 21st century, climate change adaptation has become an important part of infrastructure asset management competence.

<span class="mw-page-title-main">IT risk management</span>

IT risk management is the application of risk management methods to information technology in order to manage IT risk, i.e.:

Data center management is the collection of tasks performed by those responsible for managing ongoing operation of a data center. This includes Business service management and planning for the future.

References

  1. Vanier, D. J. "Dana" (2001). "Why Industry Needs Asset Management Tools". Journal of Computing in Civil Engineering. American Society of Civil Engineers. 15: 35–43. doi:10.1061/(ASCE)0887-3801(2001)15:1(35). S2CID   110643751.
  2. Schneider, Joachim; Gaul, Armin J.; Neumann, Claus; Hogräfer, Jürgen; Wellßow, Wolfram; Schwan, Michael; Schnettler, Armin (2006). "Asset management techniques" (PDF). International Journal of Electrical Power & Energy Systems. 28 (9): 643–654. doi:10.1016/j.ijepes.2006.03.007 . Retrieved 15 March 2023.
  3. "What is Asset Management". amcouncil.com.au.
  4. Vanier, D. (2001) Why Industry Needs Asset Management Tools. ASCE Journal of Computing in Civil Engineering. Vol 15(1)
  5. "The Asset Management Council". amcouncil.com.au.
  6. "World Partners in Asset Management". wpiam.com.
  7. "Society for Maintenance and Reliability Professionals". smrp.org.
  8. "The Institute of Asset Management". theiam.org.
  9. "The International Society on Engineering Asset Management". iseam.org.
  10. "Global Forum on Maintenance and Asset Management". gfmam.org.
  11. "World Congress on Engineering Asset Management". wceam.com.
  12. "ISO 55000:2014 – Asset management — Overview, principles, and Terminology". International Organization for Standardization. Retrieved August 21, 2019.
  13. "The Best Asset Management Software of 2018". pcmag.com.

Further reading