Small to medium sized enterprises (SMEs) have historically been slow to take up asset management systems, and automated asset management has, understandably perhaps, been low on the list of priorities of the average SME manager.
However, new technology is changing asset management dramatically, and SME managers who want to continue to be highly competitive should now consider an electronic asset control system as the most effective way to make their enterprises more profitable and efficient.
For SMEs, maintenance and servicing is typically viewed as a cost centre and the potential for improvement to the bottom line through efficient asset management has not been clear. Alison Barnes, of asset management software vendor PSDI, said: "One widespread perception is that SMEs do not have the resources available for investment in an asset management solution, but the fact is that asset management solutions are affordable by any size of organisation, and the benefits can be equally, if not more, dramatic in an SME."
Barnes claims that PSDI's Maximo asset management software is fully scalable to meet the needs of any size of organisation. "It is also possible for SMEs to take the ASP [application service provider] route, removing the need for significant capital outlay and further breaking down the barriers to improved asset management with all the financial and process benefits that it brings," she said.
The priority for all SME managers must be to develop a coherent and workable enterprise-wide automated asset management system which links all departments with the internet for efficient business functionality. For a small business in particular, the benefit of not having to think when a piece of equipment requires servicing or a component will soon need replacing can be quite dramatic. It frees up busy managers to think about other things.
The new systems have intelligent status monitoring links with all pieces of equipment or plant so that the item itself will alert the system when it thinks that a service will soon be required or a consumable or component will shortly need replacing. And other benefits are equally worthy in terms of profitability.
John King, managing director at asset management software specialist Indus International, said: "SME markets have always been harshly competitive and only with good asset management can organisations deliver reduced internal costs to the business and improve their revenue streams through previously untapped assets."
He argues that without preventative maintenance and anticipating asset service needs, an SME will fail its customers and have problems with customer retention. "Asset management solutions can schedule service works, ensure that all assets are properly maintained and that all consumables are in stock when they are needed."
It is not long before assets will have intelligence through embedded chips and will take it on themselves to initiate service procedures, book service engineers and order consumables and new parts before the need is essential. "To be successful, SMEs need reliable equipment and to know where everything is, including remote and mobile kit," said King. So the tools and equipment used by service engineers, for example, will be tracked and logged by the asset management solution.
Bar coding will evolve into labels which contain several megabytes of information, and cookies placed on the machines will activate actions over the internet like calling service engineers or ordering new consumables. Paul Vogt, marketing manager at Zebra Technologies, said: "Bar coding has always had a useful role to play in asset management but the new systems will be robust, cheap and very powerful."
"The internet is a very important part of the new systems," explained King. "There are still a few standards to be resolved, but eventually manufacturers will sell equipment with embedded chips which will log on to the SME's system. They will alert the financial system, report to the profit and loss account, work out their own depreciation and arrange for themselves to be sold for the optimum price when they get to the end of their lifecycle."
"Asset management systems can ensure that breakdowns of key equipment are minimised, if not eliminated altogether, and the loss of equipment through theft or 'employee borrowing' is slashed," added King. "Marking an item as 'security tagged' will take on a whole new meaning."
Stock-taking exercises will be simplified, and a company's principals will know at any time exactly what the organisation is worth in terms of its assets. "Any SME which is looking for a merger or acquisition needs to be exactly and reliably aware of the value of its fixed assets, including those which are off-site, and the value and range of its intellectual assets," said King.
Many SMEs are not even aware that they have intellectual assets, let alone that they should be charging for them. "Asset management software can manage licences and fees for the use of digital assets as well as enable a manager to negotiate far more sharply if a company makes an offer for the business," explained King. SME managers will either tag their assets themselves or manufacturers will offer tagging and barcoding as an optional or standard feature.
Richard Simpson, vice president of sales and marketing at Enterprise Asset Management (EAM), said: "SMEs who implement the new generation of asset management solutions will find that they have far more flexibility because they know more about their enterprise. The quality of information they have about their assets empowers them to run their businesses more efficiently."
Location, status and value
Traditional asset management is either time-consuming, when a person has to go around with a clipboard and record the location and status of everything at least once a year, or inadequate. Today's asset management systems can deliver far more information that just the location, status and value of assets.
Simpson believes that an upheaval is imminent. "The asset management world is set for a major shift of emphasis which will raise the level of its importance to SMEs," he said. "This is because asset management was previously something that happened because the finance department requested it. But in future, all managers, including sales staff, marketing personnel and service and support staff, will want to know more about the status of an enterprise's assets, including the digital ones."
When a holistic view towards assets is taken, the enterprise becomes far more efficient, according to Simpson. "SME managers and owners will feel more in control and more able to deliver what their customers want, when they want it. Internal costs will be reduced, sometimes dramatically, and the business will run more efficiently," he said.
He believes that a "full-view, cross functional" asset management system will soon be accepted as one of the most valuable tools that the SME manager can invest in. "No SME manager would leave £10,000 lying idle in the bank. They'd want it working for them. And similarly, physical, human and digital assets should be cherished, safeguarded, protected and exploited where possible," he said. "Every asset should work as hard as possible for the enterprise. In fact, a new technology asset management system becomes an asset in itself."
The ASP model
SMEs will also benefit from outsourcing asset management by using the ASP model. Simpson believes that for SMEs the cost and time involved in tailoring and implementing a new technology-based asset management system can be very off-putting.
"We've addressed this problem by developing the ASP Asset Management model that allows us to deliver the service over the internet," he explained. "SMEs don't have to acquire more assets in order to manage the assets they already have. For a small charge per month, SMEs are able to remove the headache of asset management, ensure continual functionality of their assets and equipment, be sure that their assets are generating maximum revenue, and be sure that they are controlling every aspect of the asset lifecycle." This includes the ability to sell off and replace assets in good time so that best prices are achieved.
EAM has devised a simple five-point plan of objectives to assist SMEs in the decision to design an effective and integrated asset management solution. "First, they should focus on how the company wins business. Second, they should look at the assets it needs to acquire in order to support the competitive thrust. Third, they should look at the ideal life cycle of assets already within the business and judge whether they are being fully exploited. Fourth, they should always be in a position of knowing the exact status of the business as reflected by its assets. The final objective is not to allow the new system to become an asset," said Simpson.
The benefits of having assets that can act intelligently is outlined by David McKenzie, director of pervasive computing at IBM. "The economies and efficiencies achieved by utilising wireless systems, the internet and intelligent asset management programs are not restricted to large global corporates. SMEs too can benefit, although the ASP route may be the easiest and most efficient," he said.
McKenzie predicts a time when plant and equipment will routinely be sold with embedded technology for its lifetime management by a central server, and when digital assets are automatically logged and managed and can initiate their own usage charges.
"These things sound futuristic and SME managers might think that they are way beyond their means, but that is not so," he said. "In fact, the reverse is true. Success will come to those SME managers who recognise the value of pervasive integrated wireless and intelligent systems as the way to let the business run itself while they focus on other tasks. It is the way of the future, for SMEs as much as for large corporate enterprises."
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