In the corporate equation, assets are particularly crucial components. Even though the term "asset" has a wide definition, it often pertains to everything that can be regulated and utilized to either preserve or generate more wealth. These comprise both the tangible and intangible assets that any business owns. It could seem like a waste of time and resources to invest time and money in maintaining assets that don't bring in any earnings. But when a firm expands and flourishes, asset management becomes increasingly crucial, and neglecting your company's assets can lead to a fiscal disaster. When controlled properly, assets can promote stability, growth, and prosperity for the business. However, poor management techniques can harm your business's performance and perhaps even stifle or eliminate prospects for growth.


What is Asset Management?


Asset management is to increase a financial portfolio's equity over time while keeping risk at a sustainable rate. Although asset management is not a novel or ground-breaking idea, it has significant implications for enterprises. When properly implemented, asset management addresses the most important issues affecting an organization and enables more effective growth.

Asset management is beneficial to businesses in a variety of ways. These advantages are not all directly related to monetary outcomes. With the aid of an appropriate asset management system, asset monitoring generates a continuous flow of data, promotes accountability, and maintains budgeting and asset maintenance on schedule. Asset tracking software available and run by experts often addresses some of the shortcomings of previous measurement techniques, such as relying on inaccurate data and having no way to know how different assets of the organization are operating.



What is the role of the Asset Manager?


A particular group of assets is managed by an asset manager. By monitoring assets, the asset manager hopes to reduce costs. To effectively manage the assets entrusted to them, an asset manager must design and implement an asset management plan.  Researchers are employed by asset managers and oversee monitoring asset performance, giving prudent investment recommendations, and handling other duties that may have an impact on asset effectiveness. Asset managers are the first to hunt for strong investment prospects.



What are the four steps of the Asset lifecycle?


The entire life cycle of an asset, from procurement to management and liquidation, is broken down into many stages. Consequently, each asset's life cycle is divided into four separate stages:

  • Planning – It is the first stage of the asset life cycle. At this phase, the asset requirements are developed and confirmed. An evaluation of existing assets and their capacity to meet customer expectations will help determine asset requirements.
  • Acquisition - The entire process of acquiring an asset and ensuring a cost-effective acquisition is covered by acquisition planning. This involves activities like asset creation and purchasing.
  • Operation - It covers the use and management of an asset, particularly preservation, to deliver active support. To prevent operational changes during this time, the company should concentrate on a single asset for proper inspection, tracking, and prospective improvement. Maintenance and operation encompass improvements, patch fixes, new license acquisitions, assessment processes, and cost-benefit analyses.
  • Disposal - An asset may be considered an overstock or an outperforming asset as it nears its end. The last phase of an asset's lifespan is its replacement or disposal.



Why is it important to manage assets?


The main reasons why assets should be managed are:

  • It allows a business to keep track of its assets. The procedure makes it simple for businesses to maintain an account of all their assets, movable or stationary. Owners of the company will be aware of the location of their assets, their usage, and whether any alterations have been done. As a result, recovering assets is achievable more effectively, producing larger profits.
  • It assists in ensuring the precision of depreciation rates. The method of asset management makes sure that assets are accurately recorded in the accounting records since assets are verified frequently.
  • It aids in recognizing and controlling risks. Asset management requires recognizing and controlling risks associated with the use and possession of assets. It implies that a company will always be equipped to handle any risks that may arise.
  • The portfolio of the business is cleared of any ghost assets. There are cases where assets that have been lost, destroyed, or plundered have been incorrectly documented on the records. The owners of the company will be notified of the misplaced assets using a tactical asset management strategy and will remove them from the books.