07 December 2020

What are the Key Stages of Asset Lifecycle Management?

The present world is a technologically advanced one where it is much easier for businesses to operate smoothly. Developments over the years have made business operations a lot more efficient. With this, methods for asset management have also enhanced and are more sophisticated than past techniques. Asset management software is readily available and is being incorporated to ensure an all-inclusive approach to the management framework.

Why is Asset Management Essential?

Asset management is one of the most essentials parts of any business and according to ISO 55000 it is defined as a synchronised activity of any business to comprehend value from their assets. Asset management comprises of balancing costs, opportunities, as well as threats against the anticipated performance level of the assets. It helps in achieving higher returns on investment and allows businesses to attain the goals and objectives of the organisation.

Asset Life Cycle and its Management

Thanks to asset management tools, it has definitely become more convenient for business owners and managers to look after the assets of their company. But for any business to ensure smooth management of their assets, it is important to understand an asset’s life cycle. The life cycle of the asset begins from the day of its acquisition and ends on the day it is disposed of. There are a few key stages in the same and asset management maintenance allows managers and business owners to study and observe the performance of assets at various stages.

Stages of Asset Life Cycle Management

Asset life cycle management is a process that helps in the optimisation of profits generated by assets and is reserved by the company throughout their life cycle. The stages of asset life cycle management include –

1. Acquiring the Asset

Acquisition or procurement is the first stage where the business purchases the asset. There are a lot of options available for the asset that you are looking to buy, and it is important that you make a choice that benefits your company and comes within your budget. For this, business owners need to plan by gathering data and identifying their requirements. Once the requirements have been decided, you need to:

⦁ Create Purchase Orders

⦁ Purchase Order Workflow

⦁ Link to Cost Budgets

⦁ Purchase Order Approval

⦁ Purchase added to the inventory

2. Deploying the Asset

The second stage of asset lifecycle management is the deployment of the asset. Once the purchase is made, the asset is then assembled and primary quality checks are done. Only after the assets pass the quality check, the assets are deployed and transferred from inventory to their place of usage. In addition to this, discovering assets for software and hardware inventory and employing them for the same is also conducted in this stage.

3. Utilising the Asset for your Business

The longest stage of asset life cycle management, utilising the asset for your business is where you record the revenue and returns earned in its capital. Here, patch fixes, compliance audits, cost-benefit analysis, upgrades, and new licenses, to name a few, are a part of this stage. The assets’ performance is continuously checked to ensure a smooth rectification if in case any issues occur. Other than this, the following factors are also a part of the utilisation stage -

⦁ Scheduled scans

⦁ Complete Ownership Tracking

⦁ Software Compliance and License Management

⦁ Asset Depreciation Calculations

4. Asset Maintenance and Management

The fourth stage of life cycle management is the asset’s maintenance. To ensure that your assets are working smoothly and that there is not much wear and tear, frequent maintenance of assets is extremely vital. Maintenance also helps in increasing the productivity and life of assets while ensuring the improvement of the quality of work through modifications and upgrades.

5. Disposal of the Asset

Asset life cycle management comes to an end when you dispose of the asset. Before disposing of it, ensure to check, treat, and process the asset so that it does not harm nature or society. All data in the asset must be deleted. If it is a physical asset, it should be dismantled piece by piece and those parts that are of no use should be sent to scrap.

With the help of asset management software and tools, businesses can keep a better track of their asset’s life cycle. This not only helps in optimising the performance but also allows organisations to stay updated about the operational costs, usage, and so on.