An asset management policy is a document that outlines the process for managing an organization's assets. It can be applied to physical, financial, and human resources. Organizational goals are often aligned with the content of this document. There are many reasons to have an asset management policy in place. You can protect your company's assets by ensuring they are not abandoned or misused with the right policies. Companies have many different types of investments, ranging from cash on hand to intangible things like intellectual property. They develop and maintain appropriate plans for the renewal, purchase, construction, and decommissioning of assets. Here are a few reasons why asset management is essential:
1) It allows companies to track how well they are doing financially.
2) It helps them make better decisions about where they should invest money or time to get the best return on investment possible.
3) Asset management can help prevent fraud or theft by ensuring that someone does not steal an asset without permission and then sell it for profit behind your back.
4) Creating an asset management policy is the first step towards creating a documented asset management system. This policy provides procedures and protocols supporting effective organizational asset management specifically focused on electronic devices and information assets.
Benefits of Asset management
There are many reasons that your company can benefit from when it comes to having a solid asset management strategy in place.
- One of the most important is that it allows you to manage your assets more effectively, saving you money in the long run. For example, suppose you need a new piece of machinery for your company and two different models are available. In that case, an asset management policy will allow you to choose between them based on their cost-effectiveness and other factors.
- The most crucial benefit is that it helps to reduce the risk of a substantial loss due to damage or theft. For example, if any equipment is stolen, you will know right away instead of spending hours to figure out where it went. This makes it critical for companies with assets worth more than $100,000 (or equivalent) to implement these policies to protect themselves from costly losses.
- An asset management policy highlights the best practices to handle your assets. When your assets are correctly identified and taken care, it will increase productivity as less time is spent on maintenance
- Everyone in the organization has an impact on the assets with the decisions they make. It can be executives, department managers, engineers, and technicians. A representative will help communicate the company's commitment to managing the assets to external stakeholders and clients. This will gain confidence amongst investors and business partners that the company follows a strict policy approach to handle its assets
Types of Asset management
- Digital asset management- Digital asset management is the process of organizing, storing, and retrieving digital files. It can be used for various purposes, including media and marketing agencies, video production companies, photography studios, businesses that need to store large quantities of data or want an organized file system. They allow you to reduce costs by using fewer resources, make it easier for employees in different departments to collaborate, and improve efficiency by automating repetitive tasks.
- Enterprise asset management- EAM systems allow businesses to manage their assets from one central location - including everything from physical assets like company cars and computers to intangible assets like intellectual property and customer lists. It helps them effectively coordinate different departments within the company, as well as communicate with outside vendor.
- Fixed asset management- Fixed asset management is a process by which companies manage their fixed investment. This process aims to make sure that they have the right amount of equipment and facilities needed for efficient production or operation while not overspending on unnecessary items. Smaller companies can also benefit from the management and tracking of fixed assets
- IT asset management- IT asset management is a business process involving proactive and reactive maintenance of IT assets. IT assets refer to all hardware, software, facilities, networks, data centers, and other physical or virtual resources managed by an organization. With an ITAM system, you can ensure that the hardware and software your company uses are up to date and secure, manage licenses for the entire organization's needs, track warranties, organize hardware by type or by function
- Infrastructure asset management- Infrastructure asset management is the process of assessing, repairing, and replacing equipment to ensure they continue to serve their function at an optimum level with limited risk. Infrastructure asset management is an essential aspect of any business. It doesn't matter if you're a construction company, an IT firm, or a restaurant; without the proper infrastructure in place, your business will struggle to operate at its best.
- Financial asset management - Financial asset management is a term that refers to the process of managing various financial assets. It involves assessing and monitoring all investment opportunities and choosing which ones are most appropriate for an individual's unique situation. Financial advisors play a significant role in this process, helping individuals determine their risk tolerance and when best to sell off certain investments or purchase new ones.
Best Practices to implement Asset Management Policy
- Purpose- State the purpose of your policy and what goals you are trying to achieve. Tie your organization's goals with the asset management policy and make sure everyone understands its importance.
- Responsibilities- Assign certain employees responsible for allocating assets, approval, management, and policy implementation.
- Principles- Layout certain principles and guidelines to help make decision-making and implement the policy. Make sure the principles are adopted in the changing business environment.
- Checklist - The first thing you need is a detailed list of all assets that your company owns, including their value and condition. Further, develop a plan on how to maintain or handle any loss or damage of these items.
- Review with stakeholders- Creating such a policy is time-consuming which requires a lot of brainstorming. Therefore, it is critical to collaborate with stakeholders and business leaders from different units to review and make changes wherever applicable. Ensure to make it clear and concise so that it doesn't take much time to update it even after getting published.