What about those fryers, coffee machines and refrigerators you paid so much for? Or the POS units, computers and other tech that your customers and workers rely on? Or how about the safety-critical fire extinguishers and smoke alarms spread across your estate?
Are they all accounted for, fit for purpose and compliant?
How much have they cost you to acquire and maintain - and when will they cost more to maintain than they will to replace?
Across your real estate, there are thousands of assets your business depends on to deliver services, maintain productivity and keep workers and visitors safe. And they all cost you money to manage, maintain and insure.
But research says that most businesses do not have centralised control over their assets:
But the process of digitising and automating your asset management to bring them under control can seem daunting.
FM teams often struggle to win budget from the C-Suite to digitise their asset management operations. But as companies move into an era of digital transformation they’re now on the back foot when it comes to internal reporting and compliance.
This guide will show you why and how your business needs to urgently plug asset data and process gaps - and start managing your assets strategically.
Public sector companies who are coming to the end of long-term PFI contracts are often searching for a new level of asset control to ensure they have more visibility over costs and contractors in any of their future relationships.
Private companies who are feeling the effect of more compliance demands and tighter budgets also need to increase visibility, with many wishing to escape the grip of inflexible TFM models.
Mark Whittaker – General Manager, Thomson FM consultancy & Chair of the Institute of Workplace and Facilities Management (IWFM)
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As FM budgets tighten, compliance gets tougher, and ESG requirements ramp up - the gaps in your asset data and control may become more and more obvious.
But the cost to your bottom line may still be difficult to quantify.
Without the digital tools to capture the extent of the problem, it’s hard to make a business case to the C-Suite for the money to fund asset management software. But if you can’t see exact losses - it doesn't mean they aren’t real.
Non-complianceWithout central control over assets and their compliance status - audits can be unpredictable.
Struggling to locate assets or compliance paperwork means risking failed inspections, H&S lapses and large potential fines.
DowntimePoorly maintained assets are likely to fail persistently and unpredictably. The cost to your business from repeat and avoidable episodes of downtime may be draining your maintenance budget.
Underusing assetsIf you don’t know what assets you own and how they are being used, you can’t optimise or redeploy them for new projects or to furnish new spaces. You may be wasting money on buying new assets you don’t need.
Ghost and zombie assetsWithout systematic record keeping you may not know when assets have been disposed, been moved or are now used for other purposes. You may be paying to insure assets that no longer exist!
Servicing warrantyWithout the right documentation, properly stored and easily available, you may be paying for servicing and repair of equipment that’s still under warranty.
Budget overspendWhen you can’t manage PPM effectively or model future maintenance and replacement needs, you can be caught out by urgent repair and replacement bills you haven’t budgeted for.
Over-maintenanceNot every asset needs the same level of attention. How much are you spending on servicing assets when it simply isn’t necessary?
Under-maintenanceInsufficient maintenance may lead to persistent breakdowns. Without oversight, you may never be able to see trends across assets and groups of assets that you could easily fix.
ESG controlYou may not realise when assets are performing inefficiently, nor be able to manage effective disposal and replacement to meet your environmental goals.
Under-experienceHow are customers and workers impacted by failing assets? Are they walking away from your business because of a glitchy facilities experience? What’s the uncounted cost to your reputation?
Strategic costFailing, lost and underperforming assets can have a massive impact on your P&L, reputation and CAPEX planning.
And without access to digital asset management tools, it’s hard to make the right strategic business decisions to turn this around.
Source: IAM
Every asset you own can add or destroy value for your customers and your business. From the EPOS systems that collect revenue to the chairs your workers sit on and the HVAC systems that keep them warm - the condition of assets can make or break a company’s ability to function.
But if you are able to control your assets, prevent their failure and optimise their performance, your business can keep serving customers more efficiently and more profitably.
Unmanaged assets can be unpredictable and prone to failure, but assets that are maintained systematically and in a targeted way can support the performance of your whole business.
The aim of your strategic asset management plan, then, is to give your teams the data and tools they need to control assets to meet business objectives.
But to do that you need a centralised digital asset management system that can power all of your asset decision-making.
The Institute of Asset Management has been researching and supporting asset management best practice for 30 years. Their PAS guidelines became the basis for ISO 55000:2014, the asset management standard that sets the bar for strategic asset management systems across the globe. It’s a standard that businesses can gain to prove their commitment to ensuring quality and asset performance for clients.
Not every business needs to formalise its asset management abilities by gaining ISO 55000, though it may help others gain ISO 9001, ISO 13485, or implement CGC compliance.
IAM and ISO 55000 start from the premise that asset management is a strategic process. They understand that proper management of assets can add value and competitive advantage to your business by helping you serve customers more seamlessly and cost-effectively.
ISO 50000 sets out 7 steps a company should take to implement an asset management strategy - that can be summarised as follows:
The IAM are clear that you can’t do this without integrating operational and financial asset data - or by managing different assets and their budgets in isolation.
Only when you have a complete overview of your assets and control over every part of the asset lifecycle, can you decide how to balance risk and spend to optimise commercial and compliance performance.
But that’s easier said than done.
The IAM point out that asset management should be powered by a clear line of sight, between the organisation’s strategic plan and the asset management activities delivered by your workers.
This entails having a dynamic record of your assets that engineers and FM can maintain in real-time according to your business priorities. At the same time, data from these records must feed into analytics and planning tools that can power your ‘big picture’ decision-making.
To open up this line of sight - you need an asset register that’s accessible and dynamic, fully integrated with a CAFM system that controls your reporting, process and strategy.
At the heart of this strategy - should be your digital asset register.
An asset register is a list of all the equipment that your business currently owns. It can be put together as part of a survey in which your FM team walks your sites, recording the status and location of all your fixed assets as they go.
This list-building process can give you an initial valuation and compliance assessment for insurance and planning purposes. But it won’t help with strategic asset management unless you make it digital and dynamic.
A survey is only the first step in building a digital asset register that can dynamically track the service history, value, location and condition of all your equipment.
And only when the register is integrated into a wider CAFM system will it be able to help you control costs and minimise the risk of asset loss and failure.
The right digital asset register should support you in making critical business decisions around maintenance, compliance and Capex.
Your digital asset management system should be capable of showing you the current value of each asset, plus the Total Cost of Ownership, so that you always have the right data to make strategic repair and replacement decisions.
A chosen CAFM system should be capable of dynamically calculating ownership costs using the following data:
Purchase costsThis is the amount of your initial investment.
Maintenance costsThis covers all the costs incurred by your business in ensuring that the asset continues to perform functionally. Depending on the asset, it may include annual check-ups, maintenance fees, specialist professional services, etc.
Operational costscharges incurred with running the asset itself. This includes items like energy/fuel/water usage, IT services, taxes, and so on.
Financing costsIf you purchased an asset using financing, you’ll also need to take into consideration any interest fees that you paid throughout the course of the asset’s life.
Depreciation costsIt’s also important to consider the extent to which the asset’s value depreciates over its usable life to determine the total cost of the asset.
End-of-life costsFinally, you should think about end-of-life costs, also known as disposal or demolition costs, which may include the charges associated with removal or scrapping.
Tracking the depreciation and Total Cost of Ownership of all assets, individually and by group is one of the most important functions of any piece of strategic asset management software.
Your software should help you identify trends in downtime and maintenance requests that indicate which assets or groups of assets have recurring problems that may indicate they are reaching their end of life.
Building an asset management system using Excel is a risky strategy.
The sheer size of your required spreadsheets and the organisational challenge of keeping them up-to-date is likely to overwhelm your team.
Excel can’t help you build the automated workflows you’ll need to support and record maintenance tasks and costs associated with each asset. It also won’t help you trigger notifications and reminders that ensure tasks are done and data is recorded correctly.
With a spreadsheet, the danger of data being lost, incorrectly captured and badly maintained is always present.
Using an Excel sheet as an asset register can quickly become an incomplete and unreliable record of the status of your assets.
It can introduce errors in your record keeping that end up in compliance and audit failures that can cost you serious time, money and resources to correct later down the line.
Fiona Happiness - Head of Facilities Management, UKTV
It should be easy to set up your digital asset register.
Digital tools should be intuitive and work on any device.
The right CAFM package should help you create and maintain a dynamic asset register.
The software should let you ‘walk the floor’ with your mobile phone or tablet, recording the details of your assets as you go. These tools need to help you compile your register quickly and intuitively:
The asset management system should let you set up reactive and planned maintenance workflows for each asset. It should be easy for asset users to raise work requests and for you to automatically triage and prioritise them for FM teams to:
The system must be capable of supporting different PPM (planned preventative maintenance) routines based on best practice guidelines (such as SG20)
Shakeel Jivraj – Head of Operations for Queensway Coffee Houses
A good set of asset management tools will draw on the data in the asset register to compile reports and charts that will give you, at a glance, visuals surrounding:
As well as the powerful strategic tools that can help:
Source: IAM
Accurate and proactive financial planning will allow your business to budget more effectively in the future. No nasty shocks, no begging trips to Finance - just a clear view of what you’ll need and when.
Choose the asset management tools that include:
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The ultimate goal of your asset management software is to give you visibility and control over your entire asset lifecycle.
An asset register integrated into your CAFM reporting system provides a clear ‘line of sight;’ between maintenance activity on the ground and your spending, compliance risk, ESG strategy and future CAPEX decision-making.
Stage 1 - Planning:This stage involves identifying when to acquire new assets or replace existing ones. Successful planning relies on historical service data from management software, which highlights when equipment is failing and likely to need replacement.
Stage 2 - Acquisition:After acquisition assets should be logged and tagged. Your system should let you set up customised maintenance routines, ROI calculations, and lifecycle estimation. Many modern systems may use RFID and QR codes for asset tracking, linking equipment to its service history in the register.
Stage 3 - Utilisation and maintenance:This stage involves balancing reactive and planned maintenance to minimise downtime, fix problems, perform servicing, and meet compliance requirements.
Stage 4 - Disposal:The final stage involves disposing, repurposing, selling, or recycling the asset. Without comprehensive data from a digital asset register, predicting the right time for replacement to extract maximum value from an asset while minimising its environmental impact can be challenging.
Effective lifecycle management is a virtuous circle of process control, data collection, analytics and strategic optimisation that continually improves performance. Your asset management software should help you achieve effective lifecycle management by showing you:
Different FM software solutions can help you digitally track your physical assets in different ways using:
Some options are more expensive and time-consuming to implement than others, but successful lifecycle management depends on being able to control the relationship between physical equipment and digital records.
But whatever happens, ensure your software provider has the tools that can give you the level of control you need to ‘label and link’ as you build your asset register and add more assets over time.
The pressure on businesses to minimise their environmental impact and embrace the circular economy is mounting. But companies can’t begin to optimise their asset procurement, maintenance and disposal processes in environmentally sensitive ways, without the right digital tools in place.
Ellen MacArthur Foundation, 2013
If you are looking to have the kind of oversight necessary to set and report on environmental KPIs, you need the strategic tools to help you:
Businesses urgently need to migrate from Excel spreadsheets but may be intimidated by heavy-duty asset management platforms that require months of planning, integration and internal training to adopt.
But fast-growing businesses don’t need monolithic asset management tools.
They need powerful and agile platforms where they can rapidly upload data, customise workflows and onboard contractors quickly with intuitive software that ‘works anywhere’.
To access the right data to optimise their operations, companies need to build dynamic asset registers fast and start maintaining them in real-time
And they need the process controls and analytics in place to continually improve their performance in a measurable way.
But there isn’t a one-size-fits solution for this. Instead, FM teams need flexible tools to build out the solutions that can work for them.
Mark Whittaker – General Manager, Thomson FM consultancy
Businesses too often face a choice between cheap, off-the-shelf asset management software - with little support - or expensive, monolithic platforms that take months to implement and learn how to use. Either way, FM teams end up with tools that are hard to configure and a long road to ROI.
As you look to digitise and automate your asset management process, it will pay to prioritise the partnership with your software supplier. Finding a flexible, configurable solution, will be key to gaining control of the assets that bring untold value to your business.
Louis Atkins, Facility Manager at Red Engine
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