Asset Management: The Ultimate Guide

“Asset management is preserving the value of what you own over time … through generating revenue and capital appreciation.” Those are the words of Sabine Saadeh, a financial trading and asset management expert and author of the book Trading Love — so she really knows her stuff. But what forms can “what you own” take? Can anything be a business asset that’s managed?

There are numerous types of asset management, each with unique characteristics depending on the industry you’re in. But regardless of the vertical, it requires careful oversight of each element throughout the life cycle. Only then can you ensure the asset performs as expected.

Using the right software and having an organizational process for asset management is key. In this chapter, we’ll look at some of the different types of asset management and what each of them involve.

Fixed asset management

Fixed asset management can be part of any industry or business. As the name suggests, a fixed asset does not — and cannot — move. Think things like appliances, plumbing, and large-scale fixed machinery. These types of assets are sometimes called PP&E, or property, plant, and equipment.

As you can imagine, fixed assets like these are your company’s long-term investments — the ones you make and hold for several years. Typically, they also depreciate over time, and that’s where proper asset management comes in.

It’s important to ensure your organization squeezes every ounce of value out of your fixed assets, particularly the value you expected to get from them when you acquired them. By overseeing and tracking fixed assets, you can figure out ways to extend their value over a longer period. That might mean controlling the conditions around it, like temperature and usage.

IT asset management

IT asset management relates to company-owned hardware and software like

• Computers
• Laptops
• Phones
• Cords
• Routers
• Software subscriptions
• Digital files
• Patents

IT asset managers need to carefully track, monitor, update, store and organize these assets to optimize their usage. Part of this involves eliminating viruses and ensuring network security.

Closely related to IT asset management is remote asset management, which is how organizations monitor assets across various locations. This area will be especially crucial for you if you have a remote workforce and need to track each employee’s hardware and software.

Manufacturing asset management

Asset management in the manufacturing industry is sometimes referred to as plant asset management. It involves overseeing manufacturing plants — including the buildings, equipment, and technology — across the entire life cycle. It also has links with human resources management and financial asset management.

If this type is relevant to you, you’ll typically create policies around how to use assets, whether to invest in or divest them, and how to achieve their maximum value. You’ll also need to ensure they meet compliance, safety, and environmental regulations.

Digital and media asset management

Digital asset management or media asset management is all about organizing, processing, storing, sharing, and overseeing digital content — from photos and videos to timecards and instruction manuals. This area is constantly changing as content creation and sharing technology evolves.

Organizations need to maintain the security of their digital and media assets and create policies around who has access to specific content. Digital and media asset management is a core part of that, but it also involves optimizing how you search for content, figuring out ways to repurpose content, and ensuring all digital content is consistent with your brand’s image and values.

Laurits Just, cofounder of BitsForDigits (now Flippa), a private equity marketplace that brings together investors and founders, notes another digital asset management area: digital real estate. This includes things like websites and online businesses. Investors or organizations that own some or parts of these digital assets can earn a dividend or profit based on their agreement with the founder of the digital asset.

Healthcare asset management

Healthcare asset management, aka hospital asset management, involves overseeing the physical infrastructure of a medical facility, including all its equipment and technology. Its closest sibling is probably facility asset management, which includes everything within a building, from the heating and air conditioning to the plumbing and ventilation systems.

When they have good asset management, healthcare organizations will track each asset from the moment they acquire it. Along the way, they’ll optimize its operation to maximize value as well as consider how to maintain it across its life cycle. They also need to determine the right time to retire or divest the asset and acquire a new one.

Construction asset management

Construction asset management is usually split into two different areas: asset procurement, and asset tracking and maintenance. The first involves deciding to invest in or obtain an asset, which typically includes equipment and machinery. The second is about ensuring your company sees the most value from that asset through the way you track, use, and maintain it.

Many construction companies will use construction asset management software to oversee an asset’s life cycle. To track equipment, it’s best practice to use materials list templates, bill of materials templates, and construction estimate templates. Using these will mean you standardize the way you gather, store, and organize data.

Real estate asset management

Real estate asset management also involves two areas: looking at potential real estate investment opportunities, and maximizing the value of existing real estate investments. Deciding which properties to invest in, when, and for how long is a key part of this asset management type — as is developing a process for properly maintaining existing properties that you own. Matt Picheny, an experienced real estate asset manager, investor, and author, says that “frequent and dedicated attention paid to your assets can allow you to foresee any pitfalls that may be coming up.”

Property asset management software and real estate asset management software can help organizations track each asset across its life cycle and manage the company’s entire portfolio. You can also use workflow templates, such as an HOA approval process form or maintenance request form, to streamline communications with those who rent or lease your properties.

Now that we’ve got a primer for the many different types of asset management, it’s time to understand why it’s important and how it can help an organization like yours.

Running and managing all the different aspects of a business requires strategy, planning, and putting the right resources in the right places. So, why on earth would we want to add one more thing into the (already quite full) mix?

There are many benefits of asset management that can improve your bottom line in the long term. And when you’re in a stronger financial position, your company can more easily reach its objectives.

Let’s take a look at some of the reasons why asset management is a no-brainer.

Growing the value of your business

Asset management is particularly ideal for organizations looking to expand — whether they’re large enterprises with established asset management divisions or small businesses that want to better acquire, maintain, operate, and retire their assets.

As your company increases its volume of operations, it also increases the number of assets it owns. You can grow the value of your business by properly looking after each of your assets across its life cycle.

Say your company’s assets include production equipment. Asset management processes can ensure you service the machinery properly each quarter. This attention can increase the machinery’s lifespan, so your business gets several more years of value out of it. As Sabine Saadeh explains, “Another form of asset management is increasing total wealth by engaging in investments like stocks.”

Optimizing your resources

One of the major reasons companies focus on asset management is to make sure they’re using all their resources. Without properly tracking your assets, you might find yourself not getting the most (or indeed any) value out of a piece of equipment or property. Not only is this a waste of money, but it takes funds away from other potential investments that your company could make.

For example, if you’ve got several computers and laptops, IT asset management can determine the optimal number of years that each piece of technology should be used. You can also ensure you have the machines properly serviced through tracking and maintenance so that users don’t experience issues — and downtime. Finally, when the machines no longer provide value, you can retire them. No more laptops clogging up a storage room or computers that lack the proper security software and updates.

Keeping accurate records

By its nature, asset management requires you to keep detailed records of each asset throughout its entire life cycle — from the moment you acquire it, through its operation and maintenance, and to the point when you retire or divest it. This accurate and well-organized record-keeping is an excellent way to maximize its value.

Imagine you purchase an appliance with a five-year warranty for your facility, for example. With proper asset management, you can easily access the warranty records when it breaks down or needs a new part. If you lose the record or don’t have a way to search for them (we’ve all been there), you might not be able to prove the appliance is under warranty — and that means footing the repair bill.

Removing ghost assets

Life happens, and sometimes your organization’s assets are stolen, lost, damaged, or otherwise unavailable. How often have your records still shown these “ghost assets” (so called because they don’t actually exist) as active? Well, with good asset management, you can easily remove them to reflect your company’s true financial position.

While it may not seem like a major inconvenience, having ghost assets on your financial records can be problematic — especially when you’re looking for funding or investment. It’s also important that you have accurate asset valuations based on what the market is willing to pay for them. Records of ghost assets and inaccurate valuations can artificially inflate your company’s value.

Mitigating risks

Acquiring and using any asset comes with inherent risks. The asset can be irreparably damaged, for one. It can also injure an employee, be lost, or completely lose its value. If this happens, your company stands to lose a large amount of money and may need to stop operations completely.

Asset management involves identifying possible risks related to any of your assets and putting plans in place to mitigate and manage them if they arise — like how you’ll deter theft or reduce injuries. As part of this, you’ll also carefully track key KPIs to understand your assets’ performance and reliably predict their future direction. As Matt Picheny puts it, “Asset managers need to compile data to make decisions about current and future assets.”

Figuring out strategies to minimize the occurrence of risky situations is key, but so is understanding what risks are plausible and possible in the first place. “Asset management is very important as it reflects the proactive yet prudent approach to maximizing value while managing risk,” adds Saadeh. “As a writer, for example, my assets are my ideas. If I didn’t copyright my book, which is a form of asset management, my idea would have been worthless, and I wouldn’t have been able to generate revenue from it.”

This chapter covered why asset management is important and why your organization should consider focusing on it. Convinced? Great. Next, let’s look at the different stages of asset management throughout an asset’s life cycle.

If you’ve been researching asset management for a while now, you’ll no doubt have come across the term “asset life cycle.” It can be a little unclear what it actually means, though. Some people mistakenly think it’s just about tracking and maintenance, but in reality it involves much more than that — at both ends of an asset’s life.

It’s critical to understand what an asset life cycle is to properly manage the asset across the various stages. So, without further ado…

What is an asset life cycle?

As you’ve probably gathered by now, an asset life cycle includes every aspect of its life — from when you think about acquiring it to when you dispose of or divest it. So far, so good.

In the context of asset management, businesses will take a strategic and analytical approach that considers the stage of the asset within this cycle. For example, suppose an asset needs costly repairs but is nearing the end of its life. In that case, you might choose to retire the asset early instead of investing more money into it.

And this is where asset management software comes in particularly handy. Tools like these must properly follow the asset throughout its life cycle because companies need to collect, store, and organize large amounts of data for each stage.

4 stages of an asset life cycle

1. Planning or creation

The first stage of the asset life cycle is planning or creation. It’s here where you’re considering the need to add a particular asset to your company’s portfolio. You might evaluate your existing assets, analyze asset-specific market trends, and look at data to determine a good time to acquire a new asset. And you may also look at the various ways the asset can add value to your business.

Different stakeholders who take part in this life cycle planning phase include the financial and operations teams. They need to determine how quickly the asset can help your company generate revenue and the risks you may incur by procuring it. If there are any miscalculations during this phase, organizations can feel the financial consequences for years to come. “If a client wants to build a portfolio to preserve his/her wealth,” says Sabine Saadeh, “the first question an asset manager would gauge is the client’s tolerance for risk.”

2. Acquisition or procurement

Once you’ve done your due diligence and decided to acquire an asset, it’s time to make the purchase.

Typically, you would’ve determined the budget for the initial purchase plus any maintenance costs for the asset during the planning phase. In this stage, your organization will consider different asset options and ensure it can stay within the identified budget. Laurits Just emphasizes the importance of this when acquiring an asset: “Look at the financials and do a fundamental analysis.”

3. Operations and maintenance

The operations and maintenance phase is often the longest phase of the asset life cycle, lasting anywhere from a few months to several decades. It involves regularly monitoring the asset’s performance, determining when it requires repair or maintenance, and then ensuring that maintenance takes place.

After all, the asset is meant to help your company generate revenue while being used as efficiently as possible — and if it’s not fixed in place, you need to track it at all times to prevent theft, damage, or loss. Taking proper care of the asset also prolongs its life and provides additional value to the business. “Consistent communication and thorough reporting are key so that you are able to delve in and see where there are opportunities to tighten things up,” saysMatt Picheny.

Your organization might use a combination of maintenance strategies here, both proactive and reactive, so the asset can function as intended. But it’s crucial to get right. “This is one of the most important stages because economic environments go through expansions and contractions, and being proactive with the securities in a portfolio is key to the continuous success of asset management,” says Saadeh.

4. Disposal

Once the asset has stopped providing value to your business, it reaches the end of its life cycle. Depending on the type of asset, it can be thrown away, sold, dismantled, reused, or repurposed. 

You should take a strategic approach to deciding when an asset reaches the end of its life as you must consider both financial and operational implications. Can the asset be repaired and provide value for an additional five years? Will the cost of the repairs be worth the value the asset provides? These are the types of questions to ask yourself.

Retiring an asset too early could cost you potential revenue. Retiring it too late may mean mounting repair costs only to decide to dispose of it soon after. Figuring out the right time to end an asset’s life is a balancing act, for sure.

Now that you know what an asset life cycle is and the different phases, let’s look at a specific type of asset management common throughout various industries: IT asset management.

Regardless of their industry, every business today uses information technology in one form or another. Desktops, laptops, mobile phones, software, licenses — these items are all vital to keeping you ticking along.

Through IT asset management, your organization can strategically plan for the use of these resources and get the very most value out of them. Here’s how.

What is IT asset management?

IT asset management encompasses both tangible (hardware asset management) and intangible (software asset management) elements and ensures a company properly tracks, manages, and optimizes them throughout the asset life cycle. Your organization needs to have a strategic plan for upgrading a software license or disposing of a laptop, for example — otherwise, your IT systems might not work effectively and cause operational problems.

Any IT asset, either hardware or software, has a limited lifespan. After that point, it no longer does the job you need it to do. The IT asset management process encompasses the four stages of the asset life cycle — planning or creation, acquisition or procurement, operations and maintenance, and disposal. By sticking to a few best practices along the way, this process enables you to properly manage the way you use an asset so you have a clear understanding of its total cost of ownership, as well as how to get the most value from the investment.

IT asset management best practices

1. Create a single source of truth

Rather than having bits of information spread across various departments and business units, use IT asset management to bring together everything you have on all the IT assets your company owns. With a centralized system that tracks and manages hardware and software, your organization can more effectively utilize its assets, reduce inaccuracies, minimize redundant purchases, and gain more value from its IT investments. “Use one source of truth to integrate the investment book of records with the account book of records to optimize the flow of information in the most accurate and optimal way possible,” says Laurits Just.

2. Increase access and reliability

When something goes wrong with an IT asset, your team needs to know who to turn to for help. With IT asset management, you can create a process for increasing access to and troubleshooting assets. This increases productivity throughout your organization as employees can get the reliable tools they need to get the job done. IT asset management can also be central to your business continuity and disaster recovery plans.

3. Dispose of assets carefully

IT asset disposal is a necessary part of operations. Sometimes, the hardware can’t be fixed no matter what you do to repair it, or the software’s no longer compatible with your devices. If this is the case and you need to dispose of the asset, be sure to permanently remove any sensitive business data from it. Even if you know the asset is going to be stripped for parts, you can’t risk leaking proprietary information outside of your organization. IT asset disposal should be done properly to avoid any vulnerabilities.

4. Develop a detailed BYOD policy

Many organizations have a bring-your-own-device (BYOD) policy where employees can use their personal laptops, phones, or software licenses for business purposes. In some cases, it’s the best option — it’s more cost-effective for you, and it’s more convenient for them. However, you still need a policy to ensure proper usage, covering everything from the implications of security to data privacy and digital citizenship.

5. Focus on compliance

Still using cloud subscriptions that you’re not paying for anymore? Or got an old laptop that can’t support certain security features? IT asset management pushes you to prioritize industry compliance regulations to ensure you’re not violating any rules.

Now that we’ve explored what IT asset management is and the best practices to follow, let’s head into our final chapter of this guide. Let’s look at the kinds of features you need in an asset management tool to reach your goals.

Half-heartedly carrying out asset management without the right tools is a poor use of your time and resources. Manually tracking assets can lead to human error or missed schedules, while figuring out the total cost of ownership by hand can lead to inaccuracies and confusion.

Using asset management tools ensures that your organization has clear insight into its assets at each stage of their life cycles. Laurits Just’s advice? “Look for a system with an easy-to-learn user interface for all stakeholders to unite around and communicate through.”

But with so many asset management software options out there claiming to be user-friendly, how do you know which ones to choose? Here are the key factors to consider.

A central place for all assets

Disparate information in different spreadsheets or applications can mean redundant line entries or missed inventory items. That’s why it’s important that your asset management software enables you to record all assets in one centralized location.

Jotform Tables is a low-code database that can keep track of all major company assets. Whether it’s equipment, buildings, vehicles, hardware, licenses, or another type of asset, you can record important details like the item’s

• Name
• Description
• Location
• Original value
• Current value
• Depreciation rate 

Use the free asset inventory template to monitor your investments at each stage of the asset life cycle.

Optimized approval schedules

If one of your team members needs to borrow an asset for a specific task or replace something because it no longer works as intended, they’ll have to get approval from their manager or a department head. Often, these approvals can take days or weeks — especially without an automated workflow in place.

With Jotform Workflows, your organization can set up a customized asset management workflow depending on the types of common approvals employees require. There are ready-made templates for you to pick up and run with, such as an equipment purchase request workflow template or an equipment replacement approval workflow template. With Jotform, asset-related requests are approved faster with less manual intervention, increasing productivity.

Insightful reporting

How many new assets did your organization purchase this year compared to last year? Which departments request the most assets? How many assets are currently unused? These kinds of questions are critical to answer when you’re strategically conducting asset management. According to Sabine Saadeh, asset management software should include “reliable real-time information and transparency because asset managers have a responsibility and should make decisions on behalf of their clients in good faith.” Yet not all asset management tools offer this kind of in-depth reporting capability.

With Jotform Report Builder, your organization turns asset-related form data into exhaustive reports and visual insights. It serves as a live dashboard of findings and is updated automatically as it receives new form submissions. It can even help you manage your year-end budgets and make future financial plans.

Start your asset management journey

Asset management is a strategic way to maximize the value of your organization’s investments — anything from its property or heavy machinery right down to its software licenses. There are some types of asset management that are based on a particular industry or purpose, but the goal of each type is always to get the most value from an asset across each phase of its life cycle.

From planning or creation to disposal, you can rely on this framework to figure out the best way to use your assets to reach your goals. Growing the value of the business, optimizing resources, keeping accurate records, and mitigating risks are just some of the reasons to implement asset management — but whatever you use it for, be sure to also use the right kind of asset management software to reduce human error, streamline processes, and improve workflows.

We’ll leave you with some final thoughts from Matt Picheny: “Ensure there is consistent communication and constant contact with the people who are helping manage the asset and overseeing it. Certain things can get overlooked, so having another eye on the ball is always helpful.”

Meet your asset management guides

Laurits Just

Laurits Just is the cofounder ofBitsForDigits (now Flippa), a private equity marketplace for internet SMBs. He was formerly with BlackRock and Rocket Internet.

Matt Picheny

Matt Picheny is focused on developing passive income streams that enable investors to write their own story and choose how they want to spend their time. He revitalizes and elevates communities through real estate investment, community enrichment, climate sensitivity, and the arts. Picheny is currently the asset manager of a real estate portfolio totaling more than 2,000 apartment units valued at over $200 million.

Sabine Saadeh

Sabine Saadeh is a financial trading and asset management expert. She recently published a novel, Trading Love, that introduces financial literacy through the concept of relationships. She’s also a contributing author for the anthology Women Who Lead in Finance.

Photo by Thirdman