Strategic Asset Management- The Benefits Revealed
by Expert Peripheral Designs Ltd

Executive Summary:
All companies rely upon their assets to facilitate their business drivers. All industries face accountability& transparency pressures on a day-to-day basis having to prove ROI & maximise shareholder profits whilst delivering service excellence & reliability.

Whilst ERP and Supply Chain Management systems have enabled many organisations to get a better view of their business processes, many companies are struggling to keep tabs on the management & tracking of the assets they own. A recent survey by WhereNet Corp has revealed that 70% of companies rely on manual techniques to locate & track assets and 100% link the latency of their current systems to the inaccuracy of their data (WhereNet Corp Survey October 2003).

The legal requirement of auditing becomes problematic: knowing the physical location of an asset still on the books, estimating its true intrinsic worth, disposing of surplus and idle assets judiciously and timely. CFO Enterprises highlights the number 1 reason for unplanned write offs as their inability to physically locate an asset during an audit. Corporations carry “phantom assets” on their books and worry that unplanned, expensive write-offs from their balance sheet obviously adversely affect earnings (“Unlocking the Hidden Value in Fixed Assets” CFO Enterprises Research Services Group 2000). Asset-i enables proactive management of this challenge particularly in asset-intensive industries like finance, energy, utilities, legal & healthcare.

A strategic asset management system focuses upon collecting & maintaining data from purchase point of an item right though to its disposal. To leverage the cost savings available a truly integrated & intuitive system is essential.

Asset Management Analysed

Asset Management reduces process inefficiencies and thereby creates a strong foundation for sustained growth. Strategic asset management arms managers and decision makers with the information they need to accommodate changes and deploy new items quickly. Asset repositories allow business to make informed decisions regarding the financial and technical feasibility of upgrades or changes. With immediate access to information necessary for budgeting and planning, managers are well suited for proactive planning.

Using a windows based system with common features such as drag & drop integrated with bar code terminals for a full register of company assets; which is fully customisable to suit your organisations requirements. Information such as location, procurement details, fault and maintenance history, current value and depreciation should be held to make tracking as easy as possible. Real-time management reports can be extracted from this sort of system to assist with ongoing monitoring.

Asset management addresses the most daunting financial challenges faced by the finance, IT, accounting, and contracts and departments – lease management, contract management, inventory management and depreciation.  With a fully integrated extensive and centralised data repository, all the necessary information needed to make intelligent decisions in these areas is provided.

By redistributing and/or eliminating unused software licences, furniture, fleet, telecoms & components, lowering maintenance renewal costs, IT equipment, and more accurately determining future needs ROI is instantly visible.

A recent study by CFO Enterprises clearly illustrates dissatisfaction with current processes and solutions across the useful life of an asset from its procurement to its disposal. In addition, more than 50 percent of those surveyed said their inability to physically locate an asset during an audit process is the number 1 reason for unplanned write-offs (CFO Research Services, Boston, MA.  2000). Most of these respondents clearly communicate a need for a system that could help them proactively manage asset visibility and help them exert better control over their assets.

Industry Comments & Statistics
MRO White Paper report 2003

  • Periodically reviewing & preventative maintenance saves 4 hours a week with a workforce of 500 this equates to US$6 million over 1 year.

Aberdeen Group Asset Management Benchmark Report Sept 2003

  • Businesses that use enterprise-wide Asset Management solutions benefit from higher returns on their asset management activities than companies that don’t (including asset utilisation, budgeting, planning & inventory cycles)
    ExPD would recommend that asset management & maintenance of your database is an ongoing task rather than executing ad hoc audits. In the longer term the financial saving will be significant.

Gartner Inc Using IT Asset Management to Ensure Software Compliance July 2002

  • Businesses that manage the lifecycle of their IT assets reduce their cost per asset by 30% in the first year & 5-10% annually during the next 5 years.
  • A true asset management system focuses upon collecting & maintaining data from purchase point of an item right though to its disposal.
    Asset-I enables businesses to leverage the cost savings available from a truly integrated & intuitive system.  For example 200 PC’s costing £600 each would result in a per piece saving of £180 & first year saving of £36,000

International Data Corporation (IDC) investigation found that companies that carry out asset management of IT equipment reported savings of 13% per year on staffing costs, which equates to a £387 saving per pc.
Again if your company has as few as 50 PC’s that is still a substantial saving of £19,350.

WhereNet Corp Survey October 2003

  • Highlight shortcomings of current asset management techniques still employed by many organisations.
  • Additionally a further 64% reported that their businesses are forced to conduct manual searches at least once a day to locate inventory or assets. With 27% reporting more than 10 searches per day.
  • 64% searches take longer than 30mins.
  • 47% said it often takes up to 1 hour to complete a search.
  • 33% spend more than £27,337 annually in labour costs alone to locate lost assets
  • 73% respondents highlighted that the ideal tracking system would enable their business to: Have real-time visibility of all critical assets/inventory in their premises to reduce the amount of inventory in their supply chain which in turn reduces overstocking & reduce labour costs associated with managing inventory, transportation & auditing.
  • 10% of respondents say their businesses write-off in excess of £271,000 in annual losses as a result of lost assets & inventory.
  • 49% of respondents identify the lack of connectivity between their inventory/assets and the people & information systems that manage those assets as the most significant obstruction to the streamlining of their supply chain.
    In short the ongoing cost savings leveraged through integrated asset tracking is striking.

Tighter Controls

Asset Management, when implemented appropriately, helps organisations reduce costs in many ways:

  • Control: Strategic asset information delivers maximum control over asset numbers as well as tight control of license & maintenance agreements resulting in better service & contract compliance.
  • Accountability: Knowing exactly where they are and who is responsible avoiding costly losses & write-offs.
  • -Reduction of maintenance costs: True visibility of all assets eliminates maintenance fees on retired assets.
  • -Instant Information: all the management information required is instantly and easily accessible from a single point.
  • Time saving: Auditing becomes a much quicker, easier and accurate process.
  • Fast payback: Immediate cost savings from time saved searching for assets. Through the optimisation of asset value coupled with low entry-cost advanced asset management pays for itself very quickly.
  • Accuracy: easy to use terminal and window-based software leads to greater accuracy resulting in more accurate management and financial information.
  • Cost control: Reduced cost over runs (no over ordering or under utilisation of assets) coupled with savings made from undetected losses streamlines planning & budgeting processes.
  • Decision-making: By having a full item history available suitable maintenance, repair or replacement decisions can be made. The IT department can be more productive knowing what hardware/ software is on each desktop/ laptop in each location without having to physically visit the machine.
  • Risk management: A full audit trail is available for planning of disaster recovery programs.
  • Centralisation of information: All information is held centrally aiding cost control, avoiding maverick buying & confusion particularly in multi-site companies.
  • Ease of movement: The complex task of recording & managing assets after an office move, personnel replacement or merger becomes simple.