How Enterprise Asset Management Works
To establish the worth of your company, you must first consider what you possess. Assets are the key measure of a company’s worth; thus, they must be managed thoroughly.
This necessitates Enterprise Asset Management (EAM). EAM is described as a method of managing assets across IT, network, and software, throughout their lifespan, from purchase through disposal. EAM attempts to maximise asset utilisation and optimise asset lifecycle management through policies, methods, and resources that maintain and regulate operational assets and equipment.
Without such a structure, you risk losing assets, incurring cost overruns, inefficient utilisation, and even facing security concerns.
Let us now look at key terms in Telecom Enterprise Asset Management like asset, asset lifecycle, and what to look for in an EAM solution
What is an asset?
An asset, according to a conventional asset management definition, is an object, thing, or entity that has prospective or existing value to an organisation. Value is mostly viewed from a monetary standpoint (we may make/save money from it, i.e., ROI). However, non-financial factors such as brand, comfort, the convenience of use, and competitive advantage are also important.
The standard also divides assets into two categories:
- Physical Assets: Those that can be touched, such as network equipment, inventory, IT assets, and real estate
- Intangible assets: Leases, brands, digital assets, usage rights, software licences, intellectual property rights, reputation, and agreements are examples of immaterial assets.
What is Enterprise Asset Management?
Asset management is the coordinated effort of an organisation to extract value from assets. The term “activity” is used widely here since it can refer to:
- The strategy
- The preparation
- The plans and their execution
So, asset management is more than just keeping track of what you possess. A more accurate definition is:
Asset management is a rigorous discipline that explores how to measure, appraise, manage, and maximise the quality and dependability of assets.
Enterprise Asset Management Lifecycle
To guarantee that value is gained or kept, the path of an asset through the EAM lifecycle must be controlled at every stage. Let’s go over the key stages of the lifecycle:
- Planning & Budgeting
Understanding your company strategy, including which assets are necessary to fulfil your goals, is required. Planning also entails:
- Creating precise timelines
- Budget allocation
In this case, the choice is between outright purchase and leasing. As the asset is delivered to the company and safely held pending deployment, your enterprise’s procurement processes come into action. Physical assets would be tracked in tracking systems and labelled with suitable identifying labels.
The supplier’s obligations, including maintenance, are often defined in acquisition contracts.
An assignment is initiated by either a user request or project-based timetables. Policies governing assignment and usage would apply, with some assignments needing approval or monetary commitment. The assignee’s records would be entered into tracking systems and fixed asset registries as needed.
- Training users would be part of the assignment process for some assets.
- During the assignment process, digital assets may require configuration and customisation, as well as security.
- Utilization & Optimization
In this case, the asset is used to deliver actual value in order to accomplish the strategic objectives. When an asset reaches the Utilization phase, you will conduct routine tasks such as:
- Asset usage (and misuse) is monitored using suitable tools such as technology systems and audits.
- Auditing finances on a yearly basis to track the worth of assets as their bought value depreciates over time.
Repairs, servicing, and upgrades may all be included in optimization to ensure that assets continue to serve the organisation for as long as feasible.
This entails reversing the asset’s assignment and removing it from usage. Decommissioning can be triggered by:
- Lease term expiration
- Breakdown to the point that repair is unlikely to be beneficial
You will carry out the following tasks during decommissioning:
- Update the asset’s records Determine the asset’s ultimate financial worth
- Transfer the item to a secure location for disposal or return.
You’ll need to transmit or archive any digital assets before performing security checks for confirmation.
Enterprise policies usually govern how you dispose of retired equipment.
- Some assets can be sold to a willing buyer for a profit.
- Other assets can be given to charity, destroyed, or wasted, eventually ending up in a landfill.
- If the lease contract specifies it, leased items will be returned to their owner.
Manual EAM operations are only practicable in small businesses and organisations in today’s digital world. Middle- and large-sized businesses demand powerful systems that can track hundreds, if not millions, of assets on a worldwide scale, especially in the age of IoT and mobile devices.
As a result, according to a recent forecast, the EAM solutions market will grow at a powerful 17.0% CAGR, rising from $5.5 billion in 2019 to $25.9 billion by 2030.
Modern EAM systems are often cloud-based and enable automated functionality across the whole lifecycle, allowing your organisation to:
- Have a complete picture of all your assets across multiple functions, specifically the Financial and Technical organization.
- Maximize the total cost of ownership (TCO) of each asset during its lifetime.
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