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Regardless of the scale of your business or its industry, efficient asset management practices optimizes the profits and value of your assets. Implementing appropriate strategies to asset management to operate and maintain your assets requires the use of technology solutions like asset lifecycle management software.
Aligning your operational strategy with an asset management system enables your business to improve asset performance and maximize the efficiency and cost-effectiveness of its assets throughout its lifecycle.
This article will define what asset lifecycle management software is and why your organization’s assets should be viewed from a holistic perspective.
What is asset lifecycle management?
Asset lifecycle management is an integrated technological approach to managing assets, optimizing assets throughout their lifecycle to extend their usability and production output without losing functionality. Maximizing the efficiency of assets helps companies to realize the highest return on their investments and achieve sustainable operational performance.
The key stages of an asset’s lifecycle
Without asset management software, understanding where an asset is in its lifecycle becomes an overly complicated task. Asset software helps automate all lifecycle management requirements, from acquisition all the way to decommission.
Assets must be managed across four different stages of its lifecycle:
1. Planning stage
The planning stage identifies the need for assets and establishes the organization’s asset requirements. In this stage, the organization will evaluate its existing assets and determine the most cost-effective means for the purchase of new assets.
Assessment will determine the practical sufficiency of current assets, excess or underperforming assets, and if resources and funding are available for asset acquisition.
2. Purchase stage
After costs and requirements are defined, the organization will have established a business need and the process of acquiring an asset will be performed. As part of the process, assets will be researched based on company requirements and budget.
Comparisons, demos, and trials will also be performed to guarantee that it is fit for business use. Once these requirements are met, the asset is acquired and put to use.
3. Operation and maintenance stage
The operation and maintenance stage is the most prolonged period of any asset lifecycle. This is the stage in which the asset is utilized, helping your business realize returns on capital and earning revenue.
Throughout the operation and maintenance stage, the asset’s performance is continuously monitored for productivity output. Appropriate maintenance must be carried out during the operation stage to address any performance issues and maximize an asset’s lifecycle during the operation stage.
4. Decommission stage
Once an asset’s performance has begun to deteriorate or its efficiency standard has failed, it has become an underperforming asset and must be disposed of. For an asset to be appropriately retired, all data must be wiped, and the asset’s parts are treated according to environmental and compliance laws.
The asset’s status must also change from operational to expired or decommissioned.
Understanding the benefits of asset management software
If your organization sits within an asset-intensive industry, it may be time to use an efficient and cost-effective asset management process. The assets your organization has at its disposal represents a significant capital expenditure.
Knowing how to utilize them best is necessary for delivering sustainable success. To that end, here are five ways that asset lifecycle management software can help your business realize the long-term value and optimal return no matter its stage within its lifecycle.
1. Provides a holistic overview of all assets
Having a real understanding of what assets you have at your disposal is one of the first steps to realizing the business outcomes you set out to achieve.
Establishing an integrated approach to asset management can help your organization better understand where assets are located, how they’re being utilized, and if appropriate maintenance steps need to be applied.
Accessibility is also enhanced, thanks to asset management tools like mobile assets management solutions. A mobile solution enables your organization to determine an asset’s capability in a live environment and in real-time.
2. Improvements in reporting accuracy (increases transparency
Asset software provides your business with access to compelling reports, which are critical to determining the assets’ efficiency. Streamlining your reporting requirements contributes to a better return on investment (ROI) insights, enabling you to make more evidence-based decisions.
By enhancing your ability to capture, analyze, and manage asset data, you ensure the delivery of accurate information to the right department, thereby increasing the usability of your assets and avoiding errors.
3. Gain more value from assets in your organization
Well managed and well-maintained assets result in more excellent production uptime while reducing costs arising from unexpected downtime. Because asset management software provides greater visibility of your asset portfolio, your organization can take a more proactive approach than a reactive one, to maintenance scheduling.
4. Increases accountability
Greater visibility does more than keep assets well maintained to maximize their value for your business. Knowing where assets are located and which stakeholders have permission with regard to equipment maintains accountability and dissuades misuse or theft.
This type of oversight can help reduce your company’s tax and insurance liabilities. Maintaining your asset portfolio through a single registry improves inventory control, mitigating the costs of assets that can’t be accounted for, resulting in replacement purchases.
5. Ensures regulatory compliance
Many asset-intensive industries, like mining, utilities, or manufacturing, are heavily regulated environments. Using advanced asset lifecycle management software enables businesses within these industries to enforce compliance with regulatory requirements while maintaining optimal asset usability.
Standardizing asset management through software maintains higher levels of compliance, satisfying regulatory requirements and the credibility of your organization. When regulatory authorities perform investigations, you’re able to quickly pull detailed, custom compliance reports in no time at all.
Asset-intensive businesses that continue to use outdated manual processes in place of asset lifecycle management software can never fully operate at maximum capacity. Without the right asset management tools, visibility within asset utilization costs over time, and production uptime is significantly reduced.
The more you know about the utilization and quality of your assets, the better your business is able to predict productivity, risk management, cost controls, return on capital, and future business growth. A digital solution like asset lifecycle management software ensures you have a more holistic view of assets within your registry.
Andrew Piechowiak is the General Manager – Asset Management Business at SGE Group International, a multidisciplinary group of companies with core business interests in Asset Lifecycle Management, Land Development and Software. Aladdin is SGE’s proprietary Asset Lifecycle Management software, designed to empower FM, Maintenance and Asset teams across multiple industry sectors.