Top 6 Reasons To Invest in Asset Management Software
Whether you’re the owner of a small business or asset manager in a large enterprise, the effective management of assets is critical to generating revenue.
In this guide, we’ll cover these 6 key reasons for investing in Asset Management Software:
1. Improve the Accuracy of Asset Register, Asset Discover, and Asset Inventory
Knowing how many assets you have and where they are is almost the biggest reason why most companies buy Asset Management Software. Because everything else that you want from an Asset Management Software depends on knowing the location and quantity of assets you own.
Most people within the asset management industry term this requirement as Asset Register, Asset Discovery or Asset Inventory.
But, why is it important to know where your assets are and how many of them have you got? By having the data available to you, you can:
- Know if your assets have been lost or stolen
- Understand which of your assets require servicing/replacement
- Undertake successful asset audits
- Control the cost of assets
- Gain a competitive advantage from an asset management/operational perspective
The list is really long but the fundamental premise is we cannot control our assets if we don’t know where the assets are.
What About Using Spreadsheets?
Yes, Asset Register or Asset Inventory can also be created using spreadsheets. However, the trade-in of using spreadsheets is time.
Whilst, using spreadsheets you can list the location and quantity of your assets. It becomes a tedious and extremely time-consuming process as your assets grow and/or the configuration of your assets is complex (Sometimes an asset is made-up of multiple assets).
The process is even more time consuming and error prone if you want to easily and instantly run reports on your assets. i.e. reports like assets that have been lost, require replacement, require servicing etc.
If you have the time to maintain the spreadsheets then it may be a good starting point. Most businesses start off using spreadsheets and soon realise that spreadsheets are a good starting point but for quick, comprehensive and profitable management of assets, asset management software is more suitable.
2. Control Costs and Asset Accounting
We nearly numbered this reason as the number 1 reason but without listing your assets you cannot execute cost control and account for your assets hence this reason came in at number 2.
Asset Accounting mostly involves:
- Recording purchase costs when you buy assets
- Calculating asset depreciation costs as you use your assets
- Recordingrunning costs of your assets such as maintenance costs, servicing costs, and consumables costs
- Disposal costs of your assets
Hidden Benefits of Asset Accounting
Whilst most companies undertake asset accounting for balance sheets and tax reasons, one hidden benefit (that in some cases is overlooked) is to use the asset accounting information to strengthen your relationship with your customers.
For example; using quantitative information surrounding asset depreciation, servicing costs and maintenance costs you will have a clear idea of how many times your assets are being serviced during their lifecycle. This information can be shared with your customers/prospects which will give them additional confidence in your company. There is every chance that your company will come across as a well-run company, and who does not want to deal with well-run companies.
Asset Accounting Information Can Get You Better Deals
For example; if you have 50 assets coming-up for replacement this year and 50 after 2 years. Then your purchasing power over 3 years is 100% more than the current year. There is a good chance you will get better quotes from your suppliers for 100 assets delivered over 3 years. Depending on your supplier and your industry the difference between buying 50 assets and 100 assets can be sometimes as high as 10 – 15% which means your company will be able to get better deals because of the asset accounting information.
3. To Ensure Compliance
Most companies looking for an Asset Management Software also use it to make it easier to comply with their External and Internal Compliance policies.
Asset Management Software enables you to generate reports that make it easier for you and your auditors to monitor your compliance levels.
Software license compliance, Service Level Compliance for customers (In some industries there are service level agreements which require the agreed service levels to be maintained/validated), Tax Compliance, PAS55 Compliance (Asset Management Compliance), Health and Safety are some examples of External Compliance Policies.
Internal compliance mostly includes Service Compliance and Usage Compliance.
Another innovative way to strengthen your relationship with your customers is to share your compliance reports (if possible).
4. Track Assets in Real-Time
Asset Tracking has 2 facets, one is physical location tracking mostly used for mobile assets. Modern technologies use tools to track the physical location of assets such as GPS (Global Positioning System), Barcode and RFID (Radio Frequency Identification) systems.
Physical tracking is done to ensure timely delivery of goods, route planning and for monitoring movable assets.
The second facet of tracking is identifying the stage at which the asset is during its lifecycle.
For example; assets at servicing stage, assets at replacement stage, assets at the disposal stage, assets inside/outside the premises etc. This second facet is more applicable to companies who have thousands of assets or have high-value assets.
Asset Lifecycle stage tracking is a powerful report used to calculate overall performance of assets, total downtimes of assets and most importantly you can build trends with such reports. For example; asset servicing vs production overload reports or asset servicing vs customer complaint reports etc.
5. Build an Effective Maintenance Plan
There are 2 key areas of Asset Maintenance:
- Servicing or Maintenance of your Assets
- Helping customers maintain their assets or assets that you have leased/rented/sold
Maintaining assets has many benefits – you increase the asset life, your assets perform as they should, asset maintenance certainly helps asset depreciation or appreciation, asset maintenance ensures adherence to health and safety as well as compliance policies. Recording maintenance dates/tenures help asset managers to use the information to optimise downtime and/or operational efficiency.
The biggest advantage of using asset management software (with maintenance module) is it will inform you with a couple of clicks that when and where your assets were serviced and how much it costed you. In most cases, it is also very easy for the software to inform you of future maintenance schedules.
Using asset management software for customer service or help desk software has two main advantages:
- It will be easier for customer service/help desk agents to log calls/support procedure against an asset as well as against a customer. So, at any point you can run a report for a customer and see how many assets they have and how many times they required your support services.
- It will be easy to identify support levels required for different assets – this information can be used for warranty contracts, product development, support costs, support team skills and many more areas.
6. To Generate More Revenue
Asset Management Software is a great resource of information and a framework to develop an advantage over the competition and be more profitable.
Even if we say each of the above 5 Reasons contribute 2% to your bottom line then in total asset management software along with good asset management strategy could add 10% to your bottom line.
If you are £500,000 Company, 10% benefit equates to £50,000. Across 5 years – the figure will be even bigger. It’s up to you whether you would like to pass on the benefits of adopting a great asset management software/strategy to your customers or to keep the benefits to you.
In either case, the numbers really add up to make some significant difference.