Seems to be a BIG terminology / jargon for normal people like us, right? But we do it in our normal life too. For example, my new car has a display, that shows the average fuel efficiency, which I never used to actually care about, I was more concerned about the AC efficiency and cooling, and the power and pickup of the car, but one day one of my friends shared a ride with me and pointed out that the average was ridiculously low and I started to think and act upon it. Eventually, I got it serviced in time, checked the mechanical up keeping as well, apart from cosmetic comfort, I was able to change my driving style to get a better fuel efficiency out of the same car. Now it runs over 565 kilometers in the same amount of fuel, which used to get finished for running 400 kilometers earlier. – That’s one of the crudest example of asset management. Car is the asset that I management well, and had better savings.
The finance school of thought says, asset management is investment management. Or how do you manage the savings? Maximizing the returns on assets / saving / investments, minimizing risk to a better cash flow management. To sum it up, Asset Management is the business of using money to make more money. If your investment portfolio is big, you need asset management to utilize it to the fullest of its potential.
From finance if move the focus to the industry and government, the defining of investment changes from stocks, bonds, debentures to real estate, IT and infrastructure. And so does the concept of asset management. Now the asset management becomes managing the massive infrastructure that has been built for the normal business operations, be it your office building or IT assets or your energy efficiency and so on.
In every office, we have ACs, Lifts, generators / power back provisioning, plumbing & pipes installations, electrical fittings, firefighting installations, internet & IT installations, waste handling and management infrastructure and so on in both home and offices. Each of these contribute towards giving us a comfortable living and working environment and therefore each investment on these is actually an asset. For each of these installations, we have different times of installation, different parameters of efficiency, different vendors for supply & maintenance, different warranties & AMC terms & period and so on. It has started sounding like a herculean task by now. But,you don’t need to be a rocket scientist to fire a rocket. Like you have an army of equipments, but you are not a technician. The present day model is – if it doesn’t work, call the service vendor. The other day, the air-conditioner of my room started some ice deposition and thus cooling stopped. I couldn’t sleep well that night and called the service vendor, but neither I learnt nor studied the AC system. For my home, it was okay, just one sleepless night and one half day at office. But had it had been my office, every hour of downtime would have huge man-hour work losses.
In order to keep our downtime minimal, we need to be proactive. we need to have pre-failure alert and for that we need to have some intelligence in place to consistent monitor the health of equipments and keeping us updated. Translating the same to our army of equipments, what is missing is the intelligence network, the moment we add it, the asset management system starts working as the General and keeps updating you with the routine activity and can escalate when you need to take an action like replacing the equipment / infrastructure. For this intelligence network, we need to put some equipments in place that consistently monitors the health & efficiency and keeps the related departments posted on the service actions to be taken. these are small equipments as I/O, sensors, PLCs, RTUs, DCS, some servers, and a smartphone / tablet to access these reports.
The technology that enables this is IoT. If your asset management is done properly, there’s no downtime, it increases the efficiency, profits and sustainability.