Organisations need to keep track of their assets and find ways to maximise their performance to save money. Proper management of assets also assures that stakeholders of their business get the best returns and stay with them in the long run. Also, importantly, it helps in asset recovery. Businesses of all types or sizes have vast assets including liquid assets, digital assets, and fixed or physical assets. Risks such as loss, destruction, or operational failures are common for the assets. Hence, the benefits of asset management also include the prevention of risks or vulnerabilities to the valuable assets of the business.
Arguably, a key reason to have a systematic framework for managing the assets of organisations is investment planning. It helps them with cost-effective solutions to determine the best performance level of the assets during their entire life cycle while ensuring minimal risks. As a business owner, having a dedicated strategy for managing assets can give you a higher ROI (Return on Investment), but what happens in the absence of such a strategy or framework? The absence of asset management practices can put your business through several risks. Some of the common risks are:
• Equipment failure or breakdown
• Unexpected downtime
• Misplaced inventory
• Failure to comply with regulatory standards
• Environmental consequences and occupational hazards
• Information security breaches
Emergence of any of these risks would firstly result in loss of productivity. Other serious impacts include financial costs for replacing or repairing of assets, paying fines for breaches or noncompliance, and compensating the clients for poor or delayed services. Therefore, a well-structured system is required to manage your assets and to ensure that they perform consistently and give the expected results or returns to your business. The following section describes the benefits of managing assets.
When you regularly assess your assets and review their conditions to reduce/eliminate any risk, it avoids impromptu operational failures in your organisation. It thus prevents any need for sudden repairing or purchasing of new assets. It also ensures that you never fail at providing the services or products to the customers on time. Assessment of risks which is a crucial part of the asset management hence makes your business reliable to the customers, employees, suppliers, and other stakeholders. It helps at prioritising the assets based on their functions in the business and eliminating all kinds of risks.
Loss is not only associated with damage, failure, or theft of assets. It can happen due to many other reasons. For instance, if your business deals in food products or perishable items, your inventory will expire within a short time. If you do not have any practice for tracking the inventory and rotating the stock at given intervals, you are going to waste a lot of your inventory and consequently, lose their sales value. Hence, to prevent such waste, asset tracking and management must be a necessary practice in your organisation.
When you are able to keep track of the conditions of your assets, it helps you at budgeting and deciding for future investments. When you have a clear idea of the assets’ lifecycle, it becomes easier to determine their efficiency for present as well as future operations. In short, enhanced visibility of assets helps you in long term planning. The decision-makers of your organisation always have the right facts to determine the efficiency and sustainability of the assets. Therefore, it enables them to estimate a budget required for repairing, servicing, and replacing assets.
Assets are dynamic in a business. They multiply, reduce, and even move across the organisation. This makes it necessary for you to track all your assets in real-time. It enables you to easily locate an asset when you are in need. It is not possible for the managers or employees to keep track of all assets and their history, regardless the size of your business. Therefore, a documented system is required in which the whereabouts of assets would be recorded. The system should be made accessible to every reliable member of the organisation. This ensures that no assets go missing or are failed to be put into use because you simply have forgotten about them.
This benefit has two levels. The first one is that your organisation can easily ensure its compliance with necessary regulations and applicable standards when it has a dedicated asset management framework. The second benefit that comes along with it is improved corporate reputation. Organisations that can prove compliance are considered first by the customers, suppliers, and tender providers. Hence, your organisation gets a strategic advantage to expand its business by partnering with better suppliers, winning better tenders, and increasing the customer base.
These are the undeniable benefits of asset management that your business can realise. Managing your assets through an effective framework not only enhances your operational efficiency and curtails losses but also helps with optimising your future investments. All these eventually trickle down to level up your bottom line or profits. Hence, make sure to implement a powerful management framework for the assets of your organisation if you still haven’t. It can help you derive maximum value from your assets by resolving any issue, be it damage or theft, loss or misplacement, noncompliance, or inefficiency.
Need help with the implementation of your asset management system? Compliancehelp can assist you! We have a team of compliance experts with years of experience in ISO management standards. We can hence guide you to implement a suitable ISO management system for overseeing your assets and optimising their returns. Feel free to get in touch with our expert team.
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