The term “Asset Management Software” paints with a wide brush. Two primary interests are served by a wide variety of asset management software “packages” – 1. Asset Accounting and 2. Asset Stewardship.
Asset Management Software – for Asset Accounting
Accounting requirements for assets are significant and potentially complex. Organizations are required to report assets on their balance sheets, at their current value, in accordance with generally accepted accounting principles.
From the date an asset is purchased until the date the asset is disposed, its value can be changing. Its value gets eroded over time through depreciation. Its value may spike due to a field upgrade or through costly preventive maintenance. Systems that support asset accounting must stay continually aware of the events that change an asset’s ‘book’ value.
In general, systems that support asset accounting, though essential, do not make organizations any money or create asset-related value. They exist to support accurate asset value reporting and comply with accounting-related regulatory requirements.
The user communities for these systems might never see or touch the assets for which they account.
Asset Management Software – for Asset Stewardship
Asset management software, for asset stewardship, answers to a mandate to extract greatest value from asset investments. Software is but a small part of the “solution”. The packages ought to spawn lively discussions from asset stakeholders.
Asset life cycles are examined and improved. Acquisition, placement into and out of service, maintenance, and disposal are ripe for discussion; particularly when cross-functional teams are involved.
Asset failure modes are identified and monitored. In more sophisticated settings, Failure Mode Effects Analysis (FMEA) is brought to bear on observed failures to set priorities for preventive and corrective action.
The results generated by Asset management software, for asset stewardship, ought to include…
- extended asset service life
- increased asset availability
- reduced asset failure risk.
The user communities for these systems are in constant contact with the assets with which they serve as stewards.
Asset Management Software – Implementation Guidance
Software for accounting may have step-by-step instructions or online help or chat to assist with setup and operation.
Software for stewardship ought to be bundled with guidance on process. In the course of implementing stewardship software, a team should be formed. The team ought to convene regularly, particularly at the start, to address specific topics. Team get-togethers will spawn actionable discussion. And that’s when value starts to get created. Software guidance should propose meeting agendas, prescribe team actions, and show teams ways to assess their impact on asset value extraction. So, while businesses may seek software to help manage their assets, it’s the team processes, conversations, and actions that actually help the business – with mere support from the software to keep track, reveal opportunities for corrective and preventive action, and objectively depict progress.
Asset Management Software – Shopping for Asset Management Software?
You’ll likely find asset accounting support in most ERP packages and in general accounting packages as Fixed Asset Accounting modules. The package you select will be based more on buy-in for the overall package rather than its specific features for asset accounting.
Support for asset stewardship is more purposefully delivered in standalone packages. The package you select can be based specifically on ways it can help your business extract greatest value from its tangible assets. These packages target teams that acquire, manage, and dispose of tangible assets.
It’s not redundant to have assets represented in an accounting package and also represented in a stewardship solution. The user communities have substantially different requirements and are even likely to describe assets differently to suit the distinctive contexts.
The different user communities speak different languages, have different motivations, and have very different requirements. Get a handle on your asset management requirements, and your anticipated user community, when you shop for asset management software.