Transforming Asset Management: What Companies Can Do to Make It Easier
The term ‘Enterprise Asset Management’ (EAM) is one that companies have come to understand well. While investment assets are a familiar topic here at MarketWatch, other types of assets are important too. For companies, the physical assets and other asset types do matter because they show up on the Balance Sheet and investors can see that information too. Therefore, it’s beneficial to track investment assets but also physical ones to create a complete picture of what the company’s assets are.
How can companies make EAM easier compared to how assets were managed in the past?
Understanding the Full Asset Cycle Better
Every asset that a company owns and uses goes through an asset lifecycle. With investment assets, they may be purchased to buy and hold forever or for specific durations. For instance, five-year treasuries need to be reinvested once their term is over unless the investment is through a treasury bond mutual fund or ETF. Similarly, other investable assets may be relevant over specific timelines but not beyond that point. For computer assets, it’s a shorter one compared to fixed assets like commercial buildings that might be reasonably expected to be useful for decades. While all physical assets should be tagged and tracked, knowing their expected useful life provides some much-needed perspective.
Purchasing management is necessary to know what’s being acquired. This applies whether it’s a physical asset like machinery or the finance department has just made a new investment using company funds. Both require a reliable way to track them, so a clear picture is available of the business assets in all forms. Software is better utilized to achieve this.
Tracking Across All Sites and Different Providers
It doesn’t matter whether assets are tangible and need to be tracked across multiple buildings and locations, or they’re investment assets with several different investment houses and brokerages being used. It all needs tracking! For instance, when managing investment assets, ensuring the right payments are made and everything is in order, companies do best to use enterprise software to do it. Ensuring providers are paid the correct investment fees, and regulations are adhered to, is most necessary. Software providers offer solutions to enable companies to manage their investment assets and avoid problems that derive from their management. Even smaller companies can do so.
Enterprise Software Tools are Evolving Too
Where once assets were tracked on a spreadsheet and maybe a tag was stuck on the side of each physical item, it’s far more sophisticated now.
As the software tools evolve, Enterprise asset management can cover all facets of asset management including investment assets and complicated fee structures, physical assets owned by the business, and everything in between. This avoids things going missing or being missed off the next annual report too.
EAM is now a much larger field. It now includes all assets including investable ones to provide a complete picture. Not only does this assist with the management of the business, but it ensures investors can see what’s going on too. Also, it prevents mistakes on the financials, having to re-state the financial results and the resulting bad press that can come from doing that.