What is the Purpose of an Asset Management Program?
An asset management program is a plan of action undertaken by an organization to ensure that its infrastructure and other allied assets are employed to deliver a desired standard of service. Such systems are normally employed where the available assets are co-dependent in nature and are as such meant to work cohesively for the achievement of optimal results.
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Purpose
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The main purpose of an asset management program is to clarify how a given standard of service will be provided using designated assets in a manner that is both optimal and justifiable. The term "optimal" attempts to describe a scenario where a superior standard of service can be best achieved at a minimal overall cost. Justifiability, on the other hand, has to do with a full presentation of all the costs and benefits for scrutiny purposes so as to gauge the activity's effectiveness and efficiency.
Basics
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An organization undertakes an asset management program to have a workable system that looks into the three major facets of physical assets management: maintenance, upgrading and operation. Once the framework for these three tasks is set, it becomes easier for an organization to fully understand the nature of its capital assets and respective values. An organization also becomes better placed to make sound investment decisions.
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Planning
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One of the most relevant purposes of an asset management program is to help an organization make informed planning decisions. A sound asset management program provides a useful framework that helps measure overall performance and provides vital information to help in internal short- and long-term planning.
Framework
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For the intended purpose of an asset management program to be realized, the program must contain a few fundamental elements. These include integrated asset databases, asset monitoring and evaluation, economic/engineering optimization tools and internal strategic investment analysis. These components are relevant in establishing organizational data accessibility, providing compatibility and integrity, clarifying the available asset inventories and their valuations, providing a means for trend predictors and indicators, gauging cost estimates and expected impacts, allocating resources and informing required risk management practices.
Benefits
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An asset management program is successful when the desired standard of service translates into measurable benefits that can be monetary, environmental or social. While it may be difficult to quantify some of these benefits, it is essential to provide some kind of assessment that will indicate if the asset management program is worth the ongoing costs with respect to the benefits accrued.
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