In an environment where the only constant is change, organisations need to transform the way they manage assets in order to increase return on investment. By focusing on the asset’s lifecycle—from considering whether there’s a need for an asset, to disposing of it once it’s no longer useful—you can optimise your assets and increase their lifespan. But before we discuss asset lifecycles in greater detail, let’s first explore asset management and what it involves.
What is asset management?
Asset management is a system involving processes which maximise the value of assets in the most cost-effective way. Essentially, the performance of assets is balanced against their risk profile. This must be compliant with ISO 55000 Asset Management Standards.
An asset management system helps organisations to look after any assets they may have, including plant assets, infrastructure, equipment, transport, and communications. It’s not designed to run them directly, but instead focuses on value, risk, alignment, leadership, and assurance.
The asset lifecycle
An asset lifecycle is a system which breaks asset management down into stages. This gives organisations a roadmap to help them understand how to manage assets more effectively and efficiently during their lifespan, all while lowering the total cost of ownership.
The stages of the asset lifecycle
Every asset goes through distinct stages during its lifespan. These can be broken down into the following:
Unfortunately, asset lifecycle stages are often managed in silos. In organisations, we tend to focus on each individual stage without considering the impact it may have on other stages. It’s vital that organisations think about an asset’s total cost of ownership during its entire lifecycle, and ensure that any defects don’t destroy asset value.
That’s why it’s necessary to implement intelligent asset management and understand the transformation it must undergo during the asset lifecycle.
SAP has been a market leader in enterprise asset management software systems for quite a while. It helps maximise asset health and performance with three of these key components: processes, technology and data.
By using enterprise resource planning (ERP) as well as other various solutions which look after the asset lifecycle, SAP has developed a set of dynamic processes based on industry best practices and years of experience working on countless projects.
SAP’s products harness technology to create a successful operating model for asset management. In fact, last year SAP announced a strategic alliance with Siemens in support of this. One of the ways they will work together is by combining software solutions for asset lifecycles so that clients can offer innovative and collaborative new business models that will elevate them to the global stage.
Data is the beating heart of all business processes, providing transparency and a solid foundation for improved decision-making. SAP’s solutions harness existing data to offer new expertise, develop predictive models, and create KPI pyramids.
It’s essential that organisations embrace the surge towards an intelligent asset management system. Bearing an asset’s lifecycle in mind and breaking it down into various stages can drastically improve decision-making. If this is done correctly, asset performance can be improved, and total cost of ownership will be reduced during an asset’s lifespan.