Of course it is, right? It seems like a foolish question, but it’s one left unanswered in many organizations – particularly when it comes to your fixed assets.
Fixed assets typically represent the largest single investment of most organizations. In today’s world where we’re growing more towards service-based businesses, this percentage of value should grow even larger. While the largest expenditure in most non-manufacturing businesses is labor, asset acquisitions usually are a close second.
Fixed asset operations usually come under scrutiny during budget reviews or if an asset isn’t available where/when it’s needed. The budget review process becomes even more tedious if the organization is undergoing current revenue or funding issues at that time. Postponement of asset acquisition is one of the few immediate areas where capital can be saved. The challenge, from the budget review perspective, is to effectively define which assets to keep buying and which ones to freeze.
The second challenge is effectively responding to unavailability of needed assets during an event or crisis. The focal point for this response surrounds defining the critical assets, what is the volume on hand that is needed and what is the lead time to get it in if it comes up short.
In either challenge, these real life scenarios require attention. But managing issues through a buy or freeze response isn’t necessarily the best organizational strategy for fixed assets.
As in most investments in life, our education, health, personal relationships – the best path is continuous investment in their establishment, health and growth. That generally comes from a consistent regular set of practices that provide compounding benefits over time. Anyone who tried to do 500 sit-ups to get ready for their reunion the following night knows what I’m talking about – you just don’t get the preferred results. Your organization can take advantage of this same type of continuous strategic investment for maximizing their fixed asset’s health and return.
Starting with a simple goal of “maximizing our existing investment” and “minimizing our acquisition costs” can produce significant short and long term gains. Anytime we’re dealing with tangible items, the first requirement is to validate what you have and where is it. This is generally accomplished with a physical inventory.
The next goal is then working to have the right item in the best location for its use or consumption. That usually surfaces from a strategy and planned execution.
Automating your asset inventory process is a great step in addressing your goals. First, it improves the time, effort and accuracy required to understand everything you have and where it is.
Second, during the initial field event, you have the ability to clean up asset information and records at the same time as you’re counting them. Additionally, you can put the procedures in place (tags, good locations, etc.) to improve the time, effort and accuracy of the activities in future events.
Third, with reliable and timely information you know can do better planning for asset use and budgeting for only those items that are necessary.
These are the benefits we drive for with our assetsPLUS clients on their implementations. The core application provides the primary capabilities which we then can tailor to your specific organizational requirements.
The motivation for moving forward with an assetsPLUS decision is, for most organizations, that for less than 1¢ per $100 in asset value investment annually, you can drive significant financial savings with less “unavailability” when the need arises. Just think of the impact for organizations with millions if not billions of dollars invested in fixed assets.
Everyone has the need to manage their fixed assets. And with a little focused attention and effort, you can start harvesting the benefit. Rarely can you implement an automated solution that has a positive return in less than a year. But when it comes to your fixed assets, we can.
Let’s talk about how we can impact your organization, your assets and your Benjamins.