Asset Management Strategies

Asset management is the maintenance of the desired level of service for your assets at the lowest life-cycle cost, which is the most appropriate cost for the repair, rehabilitation or replacement of an asset. As a business owner, your assets are essentially the building blocks of your business, and it is thus vital to manage them properly to ensure the continued profitability of your business. An effective asset management strategy seeks to effectively manage infrastructure capital assets so as to minimize the overall costs involved in owning and operating them, and at the same time delivering the service levels desired.

Asset management

Developing an asset management strategy

In asset management, we talk of two broad categories of assets, namely tangible and intangible assets. Tangible assets include real estate, plant and equipment, land, stocks, bonds and funds, as well as inventory stocks, cash and cash equivalents. Intangible assets do not have a physical existence, and include intellectual property such as copyrights, trademarks and patents, as well as trade names and goodwill.

An asset management strategy involves you as the business owner in developing a current asset register containing each assets original cost, maintenance costs, annual devaluation, and the expected disposal cost.

You should then determine the assets that require management, depending on the industry you are in. This could include buildings, plant and transportation assets if you are involved in physical production and service delivery. Equipment and hardware would be found in a business dealing with development and production of products and services, while intellectual property should be maintained to ensure continued right of use.

After this, you should come up with separate plans and budgets for the individual steps in the asset management cycle. The cycle includes an organizational asset management plan encompassing the company’s vision and direction with regard to asset management. There is also a facilities management plan that defines the day-to-day management of current facilities, while the maintenance plan gives an outline of how the current assets are to be maintained. Finally, the capital development plan lists the assets that were built using company capital, as well as the supporting infrastructure.

With a good asset management plan, your business stands to reap many benefits, including prolonging asset life, improving asset security and safety, meeting consumer demands and service expectations, as well as reducing the overall cost of operational and capital expenditure.

Consulting a specialist

It is often advisable to contact a specialist in the field, such as Wes Edens, if you are looking to improve your asset management strategy. Wes Edens is the co-founder of Fortress Investment Group. The company specializes in private equity, liquid markets, credit, as well as asset management services. With their vast experience in asset investment and management, the Fortress Investment Group is well placed to help your business develop sound asset management strategies for greater financial efficiency and profitability.

Good asset management strategies are essential for any business to thrive. Every company should seek to develop its own asset management plan, depending on the industry it is in. The company should also seek the services of professional asset management firms to help them come up with the best strategies for profit maximization.

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