Extending the usefulness of your assets can be a major cost-saver on replacements, but how do you do it? Asset life cycle management, a form of enterprise asset management, can help you get the most out of your assets before replacing them.
What This Article Covers:
- What Is Asset Life Cycle Management?
- Stages
- What Is IT Asset Life Cycle Management?
- Primary Benefits
- Importance
- Best Practices
- Conclusion
What Is Asset Life Cycle Management?
Asset lifecycle management is a technique of asset management where facility managers maximize the usable life of assets through planning, purchasing, using, maintaining, and disposing of assets. The main aim of asset life cycle management is to reduce costs and increase productivity.
Since tracking assets’ life cycles with the appropriate software enables a constant data supply, organizations invest in asset life cycle management. It improves responsibility while facilitating on-time equipment upkeep and planning.
Stages
The asset life cycle stages typically fit into the categories listed below. Establish the asset’s purpose before the start of the first phase of its life cycle.
The life cycle of an asset has five essential phases.
Planning
When current assets cannot satisfy the needs of your business, planning for new assets is the first stage of its life cycle. Your procurement team may collaborate with several departments to identify unique needs.
When buying an asset, consider budgetary restrictions as the main concern should be whether it will meet the organization’s needs.
Acquiring
The next stage is to purchase the asset after you’ve identified your requirements. This entails doing market research on many suppliers and selecting the one that offers the best equipment at an affordable price.
Deployment involves assembling, testing for any problems and checking for flaws, which are also a part of the acquisition step. After installing the asset, the maintenance team determines whether it requires replacement parts.
The spare parts for the asset should fit within your inventory. Perform additional testing after you deploy the asset to ensure it functions properly. Train your personnel on using and maintaining the asset.
Using
This stage involves the initial use of the asset before any maintenance. During this point, you put the asset to use as intended, anticipating the production to boost your organization’s profitability.
It’s vital to remember that although you should start planning before acquiring an asset, it continues during this phase for the asset’s life cycle and upkeep.
Numerous factors affect how long an object may operate without needing initial maintenance. These factors include the asset’s kind, frequency of usage, complexity, availability of the organization’s maintenance resources and maintenance strategy.
Maintaining
A new asset enters the maintenance stage of its life cycle once it needs its first maintenance task. Preventive and reactive maintenance are the two categories that they fit into.
Corrective Maintenance
You perform corrective maintenance when an asset experiences a problem, and its goal is to fix the issue and restore the asset’s proper operation. This is the most prominently used form of maintenance because you carry out the corrective repair as needed, regardless of how intricate a maintenance team’s plan is.
Emergency Maintenance
When an asset completely breaks down and you must fix the problem immediately, it is called emergency maintenance. A task that is part of emergency maintenance may eliminate a threat to safety or prevent harm to a machine, product or structure.
Preventive Maintenance
Preventive maintenance helps you avoid machine breakdown and production delays. Computerized maintenance management system (CMMS) software eases preventive maintenance scheduling with precision and consistency.
To keep assets in top shape, preventive maintenance programs comprise a list of tasks. A few typical examples include:
- Lubricating machine parts
- Replacing furnace filters
- Changing the oil in a service vehicle
- Painting a building’s wall
Condition-based Maintenance
Many major organizations regularly perform condition-based and predictive maintenance work, albeit not every organization does so. This is only possible if your organization has adequate maintenance resources.
Condition-based maintenance is necessary in response to the actual condition of an asset. With condition-based maintenance, the aim is to avoid doing pointless maintenance procedures.
Disposing
Disposing of the asset represents the final phase of the asset’s life cycle. When a fixed asset reaches the end of its useful life, disposal occurs as part of the asset’s life cycle. The type of asset and the material it is made of will determine whether it should be recycled or discarded.
Before you dispose of an asset, you may be able to repurpose it in several sectors. Repurposing of production assets doesn’t take place very frequently, however.
When you replace an asset, the life cycle restarts with the new asset. Determining whether your company can upgrade to a better product while reducing costs is always a good idea at this point.
What Is IT Asset Life Cycle Management?
Maintaining track of all the devices inside a business would be difficult without IT asset documentation and management. IT asset life cycle management involves keeping track of a resource from when you acquire it to when you retire it.
This entails monitoring and keeping track of the item and making sure employees use, secure and dispose of it when it is no longer required. It can also assist in lowering the cost of maintaining and upgrading assets.
Primary Benefits
IT asset lifecycle management offers many benefits, such as helping organizations make informed decisions, increased efficiency and productivity, and reduced costs.
Below are some of the benefits of performing IT asset life cycle management.
Improve Business Outcomes
IT personnel will have better visibility over all IT assets and their return on investment with an effective IT asset management (IT asset management ) life cycle strategy in place. To improve business outcomes, IT teams can ensure that the organization’s technology aligns with its strategic objectives.
Increase Efficiency
Creating a strategic asset management life cycle plan can also improve the efficiency of your IT department. IT personnel can save time by automating crucial procedures like software upgrades and asset management so that they can focus on more important responsibilities.
Reduce Costs
Cost savings are another vital advantage of good IT asset lifecycle management. IT professionals may make more informed judgments about when to upgrade or replace assets since they have better insight into their equipment. As a result, your company can spend less on unneeded upgrades and asset replacement.
Raise Productivity
Productivity gains are another benefit of efficient IT asset management. When manufacturers correctly design assets and you properly maintain them, they can function smoothly and increase user productivity.
On the other hand, old or malfunctioning assets might cause annoyance and wasted time. Additionally, your organization can prevent disruptions from broken or old equipment by routinely maintaining your assets.
Minimize Risk
Managing IT assets’ life cycles can also help lower risk. You can prevent the loss or theft of expensive equipment by keeping track of assets and knowing where they are.
Additionally, by keeping up with asset maintenance, you can lower the chance of data breaches and other security issues.
Enhance Decision-making
A successful IT asset life cycle management strategy also results in better decision-making. You can choose which assets to invest in and how to use them most effectively by having visibility into all assets and their ROI. This results in enhanced resource management and general improvement in outcomes.
Maintain Compliance
Effective IT asset management life cycle implementation also improves your ability to adhere to legal requirements. For instance, laws and regulations govern data management and storage protocols in many different businesses. By monitoring assets and being aware of where they are, you may ensure that you’re abiding by these requirements.
Importance
IT asset lifecycle management involves more than just compiling an asset inventory. The advantages come from continuously collecting asset information to boost operational value, reduce risk and optimize returns. IT administrators can reduce expenses by using their existing resources judiciously, avoiding money wastage and increasing productivity.
Additionally, effective IT asset management practices can assist your firm in avoiding frequent asset management errors. When protocols are lacking, businesses frequently overlook important life cycle phases.
Proper asset life cycle management helps you avoid costly errors and reap huge benefits. With that in mind, let’s get into some best practices so you can extend asset life cycles to their full potential.
Best Practices
The International Association of Information Technology Asset Managers defines 12 key areas for IT asset management. Read them below:
Program Process: All life cycle stages should include coordinated and documented IT asset management. You must maintain a documented record to build plans and support ongoing IT activities.
Program Management: Organize asset management processes to follow all industry standards. Developing an IT asset management strategy is easier for firms to navigate when they follow a pre-established structure.
Policy Management: Clearly outline and follow all IT assets and IT asset management policies. Policies must be easy to understand for employees and important stakeholders.
Communication and Education Management: Your organization must have a culture that promotes continual IT asset management policy training, education and awareness.
Project Management: To ensure that efforts are well-organized, IT asset management needs effective leadership. Enterprises with efficient project management can maintain IT assets easily.
Documentation Management: For the IT asset’s life cycle, all related documentation, such as purchase receipts, software licenses and authenticity certificates must be kept up to date.
Financial Management: This involves all activities involved in managing finances like:
- Budgeting
- Chargeback
- Financial audit planning
- Invoice reconciliation
- Forecasting
- Billing
Compliance and Legislation: IT asset management initiatives should emphasize reducing risk and maintaining audit compliance.
Vendor Management: IT asset management relies heavily on third-party vendors. It is important to establish clear communication channels with these vendors.
Acquisition Management: Before acquisition or deployment, establish needs for assets in the early stages of the life cycle. Develop a thorough awareness of all applicable laws, regulations and life cycle procedures.
Asset Identification: It is necessary to identify and catalog each unique IT asset to simplify identification.
Disposal Management: Make a plan for asset disposal after their useful lives are up and determine replacement requirements.
Conclusion
Asset life cycles impact all company areas, not simply the IT division. Critical assets play an important part from acquiring them until you dispose of them.
The return on investment from IT assets can be even higher when they are carefully chosen, set up and maintained while reducing unforeseen problems. These assets may lead to losses if you don’t address life cycle activities properly.
Understanding asset life cycles is a key component of a preventative maintenance approach if your organization is sincere about deploying an IT asset management solution.
What benefits have you received from asset lifecycle management? Let us know in the comments!