What is Asset Management?

Posted in Finance Articles, Total Reads: 655 , Published on 03 February 2016
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Asset management is the process by which a company or an individual manages its own assets in the most optimum way to get the most benefit out of the asset. Assets mentioned here could be of any nature, i.e. they can be tangible assets like buildings, machinery, inventory, etc. or intangible assets like trademarks, copyrights, goodwill, etc. Asset management is a system wherein one monitors and maintains the things that value i.e. an asset. In a nutshell, asset management is a systematic process of upgrading, deploying, maintaining, disposing and operating of assets cost-effectively.


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Usually asset management is done by a financial agency for others. These include for example (e.g.) investment manager who manage the assets of fund. There are many other views on asset management, like in the engineering environment where the practice of optimally managing assets is to achieve the maximum returns particularly used for productive assets like plant, machinery and equipment and it also includes monitoring and maintaining facility system. The main objective is to provide the best service to user.

Asset Management is usually talked about on various bases, one of the base from them is on the basis on industry,


Financial assets management

Usually financial asset management is done for a client and the person who does it is called an asset manager, which is the most common term used in the context of asset management. He manages the investments in the financial sector but managing funds and segregating client accounts. Assets management is an integral part of any financial company which comprises of experts who manage money, funds and handle the investments for the client. It starts right from analysis, planning and looking after the existing investments, this also includes portfolio management by the top reputed firms. This all is taken care by asset managers.


Infrastructure assets management

Infrastructure asset management is an amalgamation of management, economic (both micro and macro), engineering, re-engineering, financial, and other practices which are applicable to physical asset with the sole objective of providing the best quality of service in the most cost-effective manner. Infrastructure asset management also includes the management of entire lifecycle which includes planning, design, analysis, construction, operating, commissioning, maintaining, modifying, replacing, repairing and decommissioning or disposing of any physical and infrastructure assets. A prioritization scheme is required for operating and sustainment of asset in a forced budget environment. For example, with the rise in development activities of renewable energy, we’ve seen the heaviest rise of effective asset managers who are mostly involved in the management of solar-system like solar park, rooftops water heaters, windmills, etc. These people are getting associated with financial asset managers on a growing basis in order to offer turnkey solutions to their investors.


Enterprise assets management

Enterprise assets management is a business process that enables information system which support management of any organization's asset that can be any i.e. physical assets which are tangible and non-physical assets which are intangible asset.

• Physical assets management is the practice of managing an entire lifecycle (planning, design, analysis, construction, operating, commissioning, maintaining, modifying, replacing, repairing and decommissioning or disposing) of physical and infrastructure asset such as structure, productions and service plants, water, power and waste treatment facility, transport system, distribution network, building and other physical asset. It is highly related to asset’s health management.

• Infrastructure assets management includes relations primarily with public sector, its utilities, and properties and transport system. Additionally, Assets Management refers to shaping of many of the future interface(s) among the humans, built, and natural environment through collaborations and evidence based decision process

• Fixed asset management is an accounting process which tracks fixed asset for the purpose of financial accounting which is later utilized at several places such as IT return filing

• IT assets management is the set of many business practices that joins contractual, financial and inventory functions which supports lifecycle management and strategic decisions making of the Information Technology environment. This is one of the major processes that are defined within the IT services management

• Digital assets management is a type of electronic media (e-media) content management which comprises digital assets


Public assets management

This section is highly disputed in terms of neutrality. Many relevant discussions can be found on many forums (talk pages).

Public assets management is also called as corporate assets management. It enlarges the definition of an enterprise assets management which incorporates the administration of all effects of value to any municipal jurisdiction and the expectations of its citizens'.

An EAM (enterprise assets management) initially requires two things, first an asset registry (assets’ inventory and its attributes) which is combined with second thing, which is computerized maintenance management systems (CMMS). All public asset are interconnected and they share nearness, and this connectivity is only possible by using Geographic’s information system (GIS).

GIS centric public assets management normalizes data and allows interoperability which provides users a capability to coordinate, reuse and share information in a manner by building the GIS geo database an asset registry.

In the United States of America, the de-facto GIS standard is an Esri GIS for utility and municipality. The Esri GIS-platform collectively with an overall public assets management umbrella, of both physical i.e. hard asset and soft asset helps to remove traditional silo of structured and unstructured municipal functions. While many hard asset(s) are the typical infrastructure assets or physical assets, the various soft asset(s) of a municipality include license, permits, code enforcement, right of ways and other land focused work activity.

GIS is not a solution; effective asset manager of physical asset such building make informed decision about what to do and what not to do and when to sell their asset in order to optimize resource return on their organizational goal. Occasionally, information exhibited geospatially can help many of those decision. More often, however, deep understanding of engineering system, markets and human interaction enabled with analysis and synthesis of information may lead to these effective decision. The geospatial context is not cent percent the most effective one to understand all of these facets.

Land use development and planning is unified to other local government asset and work activity. Public assets management is the term that includes this subset of land focused assets management, considering the position that public asset affects other public asset and work activity and are imperative source of monetization and are various points of citizen communication.


To conclude, by creative and intelligent thinking about asset management, companies can successfully contain what can be a very serious liability for them. In all modern businesses, an effective asset management is crucial and the spearhead for success in their respective sector.


This article has been authored by Vaibhav Singh from SIBM Pune


References:

http://www.investopedia.com/terms/a/assetmanagement.asp

https://theiam.org/what-asset-management

http://www.investinganswers.com/financial-dictionary/investing/asset-management-2350

http://www.wallstreetoasis.com/finance-dictionary/what-is-asset-management-am

http://www.dtf.vic.gov.au/Investment-Planning-and-Evaluation/Understanding-investment-planning-and-review/What-is-asset-management



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