The core questions of asset management:
Asset management is the oversight and management of assets to maximize their value throughout their lifecycle. In this article, we focus on physical assets such as infrastructure and buildings. Owners of these assets can optimize their investment strategy, reduce costs, and improve overall performance by applying asset management principles. A well-designed asset management organization is capable of addressing the following challenges.
Responding to asset obsolescence to generate maximum value throughout the lifecycle
Asset management enables organizations to anticipate the life cycle of the assets in their portfolio and reduce maintenance costs by limiting unexpected expenses. Underinvestment in the asset portfolio leads to a decrease in value and an increase in maintenance costs, partly because corrective expenditures arise. Postponing costs leads to deferrals. And because the condition of assets deteriorates unnoticed, this can suddenly lead to undesirable situations. Asset management therefore plays a crucial role in anticipating asset obsolescence. It helps determine the regular costs (often called standard costs) associated with an adequate maintenance level, as well as estimate the costs associated with renovation and replacement. This makes it possible to compare scenarios and arrive at optimal decision-making.
Balancing available budget and asset performance
Limited financial resources can force organizations to make difficult decisions about which assets to maintain or replace. These decisions can have significant financial consequences and therefore require careful consideration of factors such as the remaining lifespan of assets and the importance of asset performance relative to the organization’s objectives. Asset management enables decision-makers to manage budget constraints to maximize asset performance. By implementing a sound asset management strategy, organizations can allocate their resources effectively and ensure their assets are used in the most efficient and cost-effective way.
Visualizing the asset portfolio and dealing with information overload
With an abundance of asset information, it can be challenging to determine which information is relevant and how to utilize it effectively. Asset management consultants and process modelers can help companies streamline their data collection and analysis procedures, enabling them to make more informed decisions about their assets. In practice, it often proves possible for organizations to extract valuable insights from information, leading to more effective asset management strategies and improved decision-making.
Making the asset portfolio sustainable and contributing to necessary transitions
Organizations are under increasing pressure to address climate change and embrace sustainability. Effective asset management can help organizations identify opportunities for reducing environmental impact and enhancing sustainability. This can, in turn, lead to both cost savings and an improved reputation. Owners of physical assets face significant challenges in transitioning to sustainable energy sources. Implementing an asset management strategy that also includes explicit energy performance objectives often proves effective in addressing this challenge.
In short: Asset management is crucial for companies seeking to optimize their investment strategy, reduce costs, and improve performance. By anticipating asset obsolescence, understanding budgets, making informed choices in the face of information overload, and explicitly setting sustainability targets, organizations can ensure their assets deliver the required performance. Asset management consultants and process modelers can provide valuable support in making informed decisions, navigating the challenges, and developing strategies to maximize asset value.
How do asset management consultants and process modelers help optimize your investment strategy?
Since asset management requires a complex and integrated approach, it’s crucial to have clear and well-defined processes within the organization. Asset management consultants can help define roles, outline responsibilities, and design a suitable organizational structure. With the knowledge and expertise they have gained in the field, they can also assist in creating clear processes for management, monitoring & inspection, scheduling, project execution, the organization of daily management, and supporting processes.
Formulating an investment strategy requires defining key performance indicators (KPIs), identifying risks, and having a clear overall picture of the asset’s condition. Furthermore, a long-term strategy requires that the risk of unforeseen costs is known and, of course, mitigated as much as possible. The goal is to have an overview of the asset portfolio as a whole and formulate a clear long-term strategy that aligns with the organization’s objectives.
After defining the long-term strategy, effective communication with all stakeholders and employees is essential. It’s crucial to understand their wishes and requirements and share the vision with them. This valuable information allows for the formulation of an implementation plan, ensuring the strategy can be put into practice.
Oxand advises on predictive and effective asset management, enabling asset owners and their service providers to optimize their strategies and investments.
For over 20 years, Oxand has been a leading asset management specialist, helping its clients formulate strategies and optimize investment plans. Our extensive expertise and unique software help organizations improve the performance of their assets. We do this with a wide range of services, including consultancy, software (Simeo), education and training (Oxand Academy), and process modeling.
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