When it comes to running a business, asset management is important. Today, we highlight the crucial components of this process according to Jack Rubinger and Robby Slaughter.
On the DuraNews blog, asset management is defined as follows:
. . . the formal process of operating, maintaining, upgrading, and disposing of goods and services cost effectively.
If and when you begin this in-depth process, it’s important to keep the above definition handy as it helps determine exactly what portions of the business need to be analyzed and included in your assessment. The piece, titled Asset Management: Orange is the New Challenge, suggests monitoring investments, company inventory, and accounts receivable. Armed with this knowledge, you can determine how well and how fast your company can pay off its debts.
According to Jack Rubinger, author of the post, keeping track of inventory and expenses can be as simple as saving receipts and recording financial plans and activity. But, he also admits that it’s not always about money and equipment. Most companies possess certain “intangible” assets in addition to money and hardware. Intellectual capital in the form of plans, documents, designs, and the like must also be calculated in any good asset management plan. After all, they were created using hours upon hours of time, so there was a financial investment in their creation. An effective asset management plan must determine which, among all these intangible items, is still of ongoing value to the organization. It’s not different than making decisions about computer hardware. The organization invested in it. The asset management plan must determine if it’s still functional or has become obsolete.
Of course the greatest asset any organization has is its people. They are the ones who drive the day-to-day progress. Any asset management plan must include careful evaluation of human resources:
Two of the most important assets in an organization are the knowledge of how the business is run, and the people who execute their work every day using that knowledge. The saying “people are our greatest asset” may seem trite, but it’s true. And in most organizations, people are the most expensive asset to replace and their knowledge incredibly difficult to capture.
To Rubinger’s point, we couldn’t agree more. In fact, Robby Slaughter, a principal of AccelaWork, contributes to his view by expanding upon the importance for recognizing valuable talent among employees. Below is Slaughter’s excerpt from the post:
. . . asset management is much more difficult when you can’t put your hands on what’s valuable. “Experienced team members know how to solve obscure problems and how to conduct routine tasks,” he explains. “We usually don’t realize just how much someone knows about our business until they are gone.”
Asset management isn’t just the responsibility of management either. According to Rubinger, everyone in the organization has a stake in protecting what is valuable.
We need to take care of the equipment we have, maintaining it and keeping it running. We need to be good stewards of financial assets for our business, helping to confirm that customers are paying on time and that money we do spend is used wisely.
When it comes time to document your company’s assets, remember that paying attention to both tangible and intangible factors is key in determining their overall value to your business. So keep track of finances, take care of your products and equipment, document processes, and invest time in maintaining employee satisfaction.
Assets must be managed, or they–like unhappy employees–will find a way to leave your firm. Build a plan and keep it running!