The purpose of asset management in an organization is to provide resources and expertise to support the acquisition, support, and disposal of physical assets required by an organization (Hastings, 2009). An asset management team is required at the organizational level to provide inputs to asset planning, acquisitions, and developments and providing facilities needed to support assets throughout their life span. Asset management activities and responsibilities impact a wide range of roles within an organization that is not confined to specific departments. Conversely, in large organizations; effective asset management will benefit from the existence of asset management personnel with expertise in specific areas. They may be formed into different groups depending on the company’s structure (Hastings, 2009).
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An asset management group consists of asset managers with appropriate technical backgrounds, and personnel in accounting and finance, legal, contracting procurement, and engineering roles. The financial, legal and engineering staff will be co-located to asset management groups from their professional area. Specific projects teams will be formed with personnel numbers and skills depending on the content and size of the project. Asset management groups are the basis from which these teams can be formed. Physical asset management groups have key roles in acquisition and development decisions, acquisition and development projects, and in creating and managing systems for equipment support for new and existing assets (Hastings, 2009).
Assets management groups have primary responsibility for projects of a wide range of types. For any type of project, a project team will be created drawing on the most closely related asset management group augmented by financial, contract, and engineering specialists as required. Depending on the amount of work required; these specialized groups may be involved in a particular project on a part-time or full-time basis. Where multiple technologies are involved, project teams may bring in staff members from other teams. Integrated project teams are formed for major projects which may be led by the business development group which will include representatives from key stakeholders (Hastings, 2009).
The management of assets depends on the knowledge about the organization’s assets, in terms of current equipment, the business role of assets, and prospects. Asset managers need to have a reliable practical working knowledge of the major assets at a management level to be able to make reliable decisions. Managers need to be aware of assets with elements in any given capability. Configuration management will keep track of any changes to equipment configurations, such as technical upgrades and regulatory capabilities. For items that require future capital decisions, it is advisable to list the date and type of decisions that will be needed (Hastings, 2009). “For example for a truck fleet, you need knowledge of the years of remaining effective life of vehicles, and of the lead time for acquisition of replacements so that you can plan for replacement strategy in sufficiently in advance (Hastings, 2009, P. 16)”.
Monetary assets comprise property equipment and goods owned by the organization that has monetary value. Financial activities include all monetary transactions that enter or exit an organization. Accountants keep track of all monetary assets in an organization. Keeping track of all monetary transactions helps determine the efficiency of an organization in four very important ways. That is measuring success, pointing out weaknesses, indicate areas that need improvement, and can help to anticipate crises (Scott, 1998). The monetary asset or the financial budget of an organization is very important because it provides the means for an organization to purchase and make use of their resources such as machines. The monetary aspect of an organization is also important for the maintenance of equipment. In an example of a health care center, it must be able to manage and allocate its monetary assets for the benefit of the center. With these monetary allocations, an organization can be able to acquire the equipment, materials, and resources they need to serve their customers. In this way, an organization can have a smooth-running, implement new projects, and provide efficient and proper services (Idanan, 2009).
Budgetary control is one of the most widely recognized and used methods of managerial control. “Budgetary control is the process of finding out of what is being done and comparing the outcome with the corresponding budget data to verify accomplishments or remedy differences (Snell & Bateman, 2009, P 584)”. A primary consideration of budgetary control is the duration of the budget. Management audits have been developed as a means of determining the effectiveness and efficiency of organizations. Management audits may be internal or external. Managers can conduct internal audits of their organizations or external audits of other organizations (Snell & Bateman, 2009). A company can perform an external audit of competitors for its own strategic decision-making purposes.
An organization can be evaluated on several factors including financial stability. Management audit compiles a list of desired qualifications. Conversely, among other undesirable practices uncovered by management audit is uneconomical use of equipment and machines (Snell & Bateman, 2009).
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Hastings, N. (2009). Physical Asset Management. New York, NY: Springer.
Scott, J. (1998). Fundamentals of Leisure Business Success: A manager’s Guide to Achieving Success in the Leisure and Recreation Industry. New York, NY: Routledge.
Snell, S. & Bateman, T. (2009). Management: Leading Collaborating in a Competitive World (8th ed). New York, NY: McGraw-Hill/Irwin.
Idanan, J. (2009). Thinking Made Easy: Evaluating The Organizing Function as It Relates to Physical Assets, Monetary, Human Resources, Knowledge, Technology. Web.