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Asset management is about maximising the return of any particular asset. This could be in the form of capital gains, reduced operating expenditure or extending the life of that asset.
Asset management plans will look different between organisations, regulatory requirements, and the goals of the plan.
Budgetary and compliance-related pressures are not new concepts to facilities managers. Ever-increasing expectations compete with ever-shrinking resource pools, compounding the age old problem of having to do more, with less.
Whether you know it or not, you’re likely engaging in asset management already.
To what degree, however, is a completely different question
As societal and cultural expectations shift to heavily rely on increasingly complex asset systems, asset management is evolving to keep up the pace. Paying attention to asset management is critical to an organisations long-term success.
Asset management in itself, is not enough to ensure compliance with regulatory requirements. However, by observing your relative position on the asset management maturity framework, you can gain greater visibility over adherence to these requirements.
The asset management maturity framework makes adhering to standards that are legislated by governing bodies much easier.
Improved visibility allows you to identify areas where there may be gaps, and conversely can help to prove adherence to compliance requirements when necessary.
The visibility provided by efficient asset management informs decisions that affect how well you meet those compliance requirements. Additionally, that same visibility can become an enabler, and help to identify ways to act more efficiently.
Reducing operational expenditure of assets, and maximising their value, has a clear effect on the bottom line of any business. Efficient management of major assets can have a huge impact on operational and capital expenditure.
One emerging area of focus in asset management is sustainability. Cultural shifts, and commitments to global climate goals, have pushed sustainability into the spotlight.
Effective asset management allows businesses to gain a holistic view of their assets, the relationships between them, and their environmental footprint. This in turn, creates the opportunity to identify areas where improvement is possible, where carbon credits can be gained and lost, and manage asset scores.
Asset disposal, repair and recycling all play a part in the overall environmental impact of a business. Better still, asset management protocols can allow businesses to prove environmental impact, a requirement set to be mandated in the coming years.
Effective asset management can help to mitigate some of the major risks faced by businesses.
Assets allow businesses to continue operating, and the less precise the management of those assets, the more risk is present. For example, if a piece of critical equipment is to suddenly stop working, the business grinds to a halt. Effective asset management reduces the risk of this occurring, therefore reducing overall risk.
There are of course, more obvious risks addressed by asset management. Improving adherence to regulatory requirements, improving health and safety, and brand preservation among them.
Many assets are closely linked to the health and safety of facility users. The more efficiently these are managed, the lower the human risk the business carries.
Additionally, efficient asset management can help to reduce the risk of unexpected downtime, which must be accounted for in a risk assessment.
Better visibility allows businesses to see instances of over or under investment, and identify opportunities to reduce or recoup expenditure.
For example, when it comes to the disposal of certain assets, the asset management plan should stipulate the most efficient way to do this. This might be sending them to a recycling facility, or selling for spare parts, recouping some of the cost.
The asset management plan might also present opportunities to reduce environmental impact, improving the buildings overall rating.
An effective asset management plan may also uncover opportunities for additional revenue streams. For example, universities opening less buildings during holidays, and leasing out spaces they don’t need to utilise during that period.
An efficient asset management plan improves the allocation of funding and resourcing. Whether that is getting rid of redundant equipment, sharing equipment across groups rather than buying new, buying similar products to reduce the risk of spares, or not replacing something solely based on current performance.
An efficient plan will help the business identify the opportunity cost associated with the use of space or funds. This allows informed decisions to be made from data within a database, using risk assessment to divert funds.
By efficiently managing assets, and having a clear picture of how those assets are working for the organisation, you can start to identify opportunities for growth.
It is important to note, that asset management isn’t a point in time project for completion, but rather an ongoing journey of continual improvement.
Getting started on the journey towards advancing your asset management can seem intimidating, but it can be done. At FMI, we’ve been working with our clients for decades, supporting them in their asset management journey
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