What is Asset Management? | A to Z Guide of Asset Management [Wiki] (2023)

Introduction about Asset Management [Wiki]

Asset Managementcontinues to be one of the primary concerns of organizations all over the world. Why? Assets drive businesses. Modern businesses rely heavily on physical assets to sustain effectively. Asset management process also helps businesses derive more value from an asset and achieve business goals.

While the concept of asset management has been in existence over several decades, it continues to be an ever-evolving domain. So, it is critical to keep pace with the evolution and adapt to changes on the fly. How well firms embrace change will determine which prosper in the years ahead.

What is Asset Management? | A to Z Guide of Asset Management [Wiki] (1)

This guide takes a closer look at the asset management definition, the current state, why you should invest in it, the deliverables it offers, and even a forecast into how it might evolve in the coming years.

What is asset management?

Asset management is the process of planning and controlling the acquisition, operation, maintenance, renewal, and disposal of organizational assets. This process improves the delivery potential of assets and minimizes the costs and risks involved. Adequate maintenance and proper deployment of systems, people, and processes ensure a positive enhancement of capital over the asset lifecycle.

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What is asset lifecycle?

Asset lifecycle is the number of stages that an organization’s asset goes through during the lifespan of an asset’s ownership. It is the period that an organization can effectively and efficiently utilize an asset to accomplish its business goals. An asset lifecycle typically covers all phases of an asset’s life from acquisition through maintenance and eventual disposal.

Types of asset management

While the definition of asset management may differ from one organization to another, they can be vastly classified into three types: physical, financial, and contractual.

  1. Physical asset managementstands for the process of handling things like fixed asset management, inventory management, infrastructure, and public asset management.
  2. Financial asset managementrefers to the process of managing procurement, developing an investment strategy, controlling budget and costs, handling cash, bonds, and stocks.
  3. Contractual compliancestreamlines processes like IT asset management, digital asset management, contractual maintenance, and management of intangible assets.

Pain points in managing company assets

Some of the biggest issues facing asset management is the hurdle with monitoring and managing existing assets manually. When your assets have been on the grid for years, it can end up as loss or worse, compromised.

In addition to this dilemma, manual asset management is subject to the pain points that are listed below:

  • Manual data entry, error-ridden processes, and inaccurate data
  • The unstructured asset management process
  • Lack of authority to enforce asset management policies
  • Poor or non-existent change management
  • Little to no tracking and reporting of real-time asset value and location
  • Inability to assess the potential data risk or prevent it

Seven best practices for effective asset management

An effective asset management process helps businesses monitor and manage their assets using a systematized approach. With a solid process, organizations can improve productivity and efficiency of an asset thus enhancing the return on improvement.

Key components of an effective asset management process include:

  1. Preparing an asset register: An inventory list of available assets
  2. Identify asset conditions and rating system
  3. Track asset depreciation accurately at timely intervals
  4. Determine the value of assets and their replacement cost
  5. Move away from reactive to predictive asset maintenance
  6. Focus more on change management to ensure database integrity
  7. Eliminate paperwork and automate tasks like data collection, asset reporting, and more

How to improve asset management

Implementing an asset management system will not deliver results, if the process itself is mediocre at best. So, before looking for ways to automate the process, it is critical to streamline their existing asset management practices.

Here are seven factors an organization need to focus on in order to bring asset management into the future:

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1. Understand the reason behind asset’s existence

  • What purpose does this asset serve?
  • Why was it procured?

2. Gain knowledge about the asset’s condition

  • What is the asset’s current condition?
  • How well does it fulfill its purpose?
  • Is it reliable?

3. See how effectively the asset is being utilized

  • What value is the asset delivering currently?
  • Is it fulfilling the existing expectations?

4. Identify future demands

  • Will there be a change of service expectations?
  • Is the asset robust enough to deliver future demands?

5. Assess the existing maintenance program

  • What is being done to maintain and improve the asset’s lifecycle?
  • How effective is the current asset maintenance program?
  • Is the estimate for maintenance costs accurate?

6. Predict depreciation rate and associated risks

  • Is the useful life of the asset reviewed periodically?
  • Are the expectations significantly different from previous estimates?
  • Is the depreciation charge for future periods adjusted accordingly?
  • What is the impact of this depreciation?

7. Forecast asset disposal

  • When is the asset expected to be permanently withdrawn from use?
  • Is the gain or loss from the disposal of the asset noted in the financial statement?

Benefits of automating asset management

Smart businesses don’t waste time trying to complete basis and repetitive asset management tasks manually by using the same outdated process over and over again. Investing in asset management software allows businesses to automate tedious and time-consuming asset management activities offering administration team to focus more on value-added activities.

However, implementing an asset management system is a huge decision, so it is better to be sure of the tangible benefits before you take the leap. Ideally, asset management software:

  • Prolongs the life of your assets
  • Aids in rehabilitating, repairing, and replacing assets efficiently
  • Meets consumer demands with a focus on system sustainability
  • Helps focus on activities that are critical to sustained performance
  • Enables businesses to meet service expectations and regulatory requirements
  • Improves responses to emergencies or unexpected risks

Now that you’ve understood the benefits of implementing an asset management solution, it is time to pick the right one. There’s no such thing as the perfect asset management software—so you need to pick the right asset management tool according to your unique needs.

Listed below are five popular asset management tools in the industry which is a good place to start your search.

1. ServiceNow

Designed specifically for enterprises, ServiceNow offers a range of asset management services including the likes of inventory management, financial and contractual information management, resource tracking, and more. With a comprehensive asset management tool like ServiceNow, businesses won’t have to switch between niche software solutions for each specific HR function.

Pros:Easy to use, consolidated asset database, and customizable reports

Cons:The process of matching all asset entitlements and contracts initially is quite arduous and time consuming.

2. Kissflow Finance and Operations Cloud

This isn’t a strictly administration-automation tool, but a finance cloud that you can use to manage basic operation tasks like asset management, facility management, and more. Kissflow is a simple and powerful finance and operations cloud for organizations of all sizes.

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Pros:User-friendly, flexible, and consistent user experience across devices

Cons:Simplistic workflow layouts, lack of pre-defined templates, and dashboards

3. SAP ERP Suite

Initially, SAP did not focus much on enterprise asset management, as a result, the product had several functionality gaps. But, now it has evolved to a complete suite of enterprise asset management tools that are relevant for all industries. SAP’s major advantage is the convenience of managing everything from materials to assets and costing in a single place.

Pros:Rich functionality, strong service expertise, and powerful user community

Cons: The maintenance scheduling tool is neither flexible nor conducive to industry standards

4. IBM Maximo

Maximo is an end-to-end asset management solution with a detailed maintenance module as the main functionality with other complementary tools for procurement and inventory management. The integration framework of the product is effective and it encourages and well connected asset management platform.

Pros: Product functionality, product roadmap, and future vision

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Cons:Clunky UI, bugs in spatial add-in, issues with mobile apps

5. Oracle E-Business Suite

Oracle E-Business Suite offers an all-in-one solution to manage asset management. The application provides a visually rich reporting functionality which stakeholders can use to create a customized analysis report. Organizations can integrate with an array of applications using REST API or SOAP connectors.

Pros:User-friendly, flexible, and consistent user experience across devices

Cons:Cost of maintenance is way too high


Successful asset management is essential to any organization’s success specifically as infrastructural assets with a long life span and substantial capital outlay will provide a foundation of economic activity. The more complex the organization, the more vital it is to have a solid asset management process in place.

While manual asset management practices can get the work done, employees will have to manually wrinkle and iron out a lot of details to ensure their organization makes the most of the available assets. By implementing an asset management tool businesses can manage assets and implement their asset management plans effortlessly.

If you’re on the hunt for the perfect asset management software, then go for a solution that not only helps you manage assets but also prolongs their life ensuring they operate efficiently and economically.Kissflow Finance and Operations Cloudenables an organization to acquire, manage, and maintain an asset throughout its lifecycle.

Sign up for a free demo today and see how Kissflow Finance and Operations Cloud can help your company’s assets run smoothly.

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What asset management means? ›

The term asset management is synonymous with wealth management. As a financial service provider, an asset manager manages the assets of his or her clients. The task includes not only providing advice, but also making investment decisions based on the client's investment strategy, risk tolerance and financial situation.

What is asset management wiki? ›

Asset management is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-effective manner (including all costs, risks, and performance attributes).

What are the 3 main asset management types? ›

What Are the Most Popular Asset Classes? Historically, the three main asset classes have been equities (stocks), fixed income (bonds), and cash equivalent or money market instruments.

How will you explain in simple words the concept of IT asset management? ›

“IT asset management maintains and develops standards, policies, processes, measurements and systems which enable the organization to properly manage its IT assets with respect to risk, control, governance, costs and business compliance and the performance objectives that have been set by the organization.”

What is asset management and its purpose? ›

Asset management refers to the process of developing, operating, maintaining, and selling assets in a cost-effective manner. Most commonly used in finance, the term is used in reference to individuals or firms that manage assets on behalf of individuals or other entities.

Which is the most common definition of asset management? ›

Financial asset management refers to the process of managing procurement, developing an investment strategy, controlling budget and costs, handling cash, bonds, and stocks.

What is asset management PDF? ›

Asset management is defined as maintaining a desired level of service at the lowest life cycle cost. In simple terms, it provides a means of determining the best way to spend your limited dollars to achieve the maximum impact.

What are the 7 types of assets? ›

What are the Main Types of Assets?
  • Cash and cash equivalents.
  • Accounts Receivable.
  • Inventory.
  • Investments.
  • PPE (Property, Plant, and Equipment)
  • Vehicles.
  • Furniture.
  • Patents (intangible asset)
24 Nov 2022

What are the 5 types of assets? ›

When we speak about assets in accounting, we're generally referring to six different categories: current assets, fixed assets, tangible assets, intangible assets, operating assets, and non-operating assets. Your assets can belong to multiple categories. For example, a building is an example of a fixed, tangible asset.

What are the 4 asset types? ›

Here are the most common asset classes, ranked generally from lower to higher risk:
  • Cash and cash equivalents. Many investors hold cash as a way of maintaining liquid assets or simply providing safety and comfort in volatile times. ...
  • Fixed income (or bonds) ...
  • Real assets. ...
  • Equities (or stocks)

What are the four fundamentals of asset management? ›

Each asset has a life cycle that can be digested into four key stages:
  • Planning.
  • Procurement/Acquisition.
  • Operation and Maintenance.
  • Disposal.

What are the stages of asset management? ›

The asset management lifecycle stages are: planning, acquisition, operation and maintenance, and disposal.

Why asset management is required? ›

If you adopt an asset management plan, you can develop, operate, maintain, upgrade and dispose of your assets cost effectively. This means having your fingers in several pies – administration, finance, capital and operations – and a good grasp of your company's strategic and operational processes.

What is main purpose of asset management and reliability? ›

An Asset Management & Reliability program combines managerial art with engineering science to coordinate all asset management activity within a business enterprise, to realize maximum operational and financial value from the business' critical physical assets.

What are the 6 classes of assets? ›

An asset class is a way to categorize different types of investments with similarities. Types of asset classes include: stocks, bonds, Cash equivalents or money market vehicles, real estate, commodities, and cryptocurrency.

What is asset management life cycle? ›

Asset Lifecycle Management (ALM) is the process of optimizing an asset's reliability and operational performance during its lifespan. Enterprise Asset Management, EAM, is the term which defines the management of the maintenance of physical assets of an organization throughout each asset's life cycle.

What are the two main types of assets? ›

Assets can be grouped into two major classes: tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets. Current assets include cash, inventory, accounts receivable, while fixed assets include land, buildings and equipment.

What is an asset in simple words? ›

Asset FAQs

An asset is anything that has current or future economic value to a business. Essentially, for businesses, assets include everything controlled and owned by the company that's currently valuable or could provide monetary benefit in the future. Examples include patents, machinery, and investments.

What are the pillars of asset management? ›

Here are the 5 Pillars of a Successful Asset Management Strategy:
  • Classification. The foundation of a successful asset management strategy relies on how you first register an asset. ...
  • Centralized Information. ...
  • Indicators. ...
  • Maintenance. ...
  • Calibration.
18 Jun 2018

What are 10 assets? ›

10 income-producing assets to buy
  • Online Business. One of the most popular and profitable ways to invest is to start your own business online. ...
  • Stocks. ...
  • Rental units. ...
  • Recession-proof brick and mortar businesses. ...
  • Certificates of Deposit. ...
  • Real Estate Investment Trusts (REITs) ...
  • Peer to Peer Lending. ...
  • Bonds.
10 Feb 2022

What are the top 5 assets? ›

What are the most profitable assets?
  • Dividend Paying Stocks.
  • Real Estate Crowdfunding.
  • Real Estate Investment Trusts (REITs)
  • Online Businesses.
  • Rental Properties.
  • Peer to Peer Lending (P2P)
18 Jul 2021

What are top 10 assets? ›

15 Most Important Assets That Will Increase Your Net Worth
  • Owning Your Primary Residence. Homeownership ranks among the most common ways people gain a substantial increase in net worth. ...
  • Second Home. ...
  • Retirement Savings. ...
  • Education. ...
  • Rental Real Estate. ...
  • Health. ...
  • College Savings. ...
  • Maintain Your Home.
22 Nov 2022

What are your top 3 assets? ›

Your three greatest assets are your time, your mind, and your network. Each day your objective is to protect your time, grow your mind, and nurture your network. Top performing salespeople understand what this means and they don't allow themselves to fall victim to spending time on non-revenue producing activities.

What are the 9 asset classes? ›

There is an array of asset classes the average individual invests in. We discuss nine of them in this article: Stocks, Indexes/ETFs, Mutual Funds, Currencies, Cryptocurrencies, Commodities, Startups, Real Estate and for some people “Personal investments”.

What are the 11 asset classes? ›

Common asset classes include:
  • Equities (stocks)
  • Fixed income (bonds)
  • Cash.
  • Real Estate.
  • Commodities.
  • Cryptocurrencies.
  • Alternative investments.
  • Financial Derivatives.
18 Oct 2022

What are 8 assets? ›

Terms in this set (8)
  • support. having family, friends, and others to help you.
  • empowerment. feeling as if you are valuable member if your family and community.
  • boundaries. ...
  • productive use of time. ...
  • commitment to learning. ...
  • positive values. ...
  • social skills. ...
  • positive identify.

Who is responsible for asset management? ›

The asset management industry is largely governed by two bodies—the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Although they are separate, there is an overlap between these and other agencies.

What is asset management company example? ›

AMCs are colloquially referred to as money managers or money management firms. Those that offer public mutual funds or ETFs are also known as investment companies or mutual fund companies. Such businesses include Vanguard Group, Fidelity Investments, T. Rowe Price, and many others.

What skills do you need for asset management? ›

Asset Manager Qualifications/Skills:
  • Strong analytical skills.
  • Highly skilled in math and finance.
  • Excellent communication skills.
  • Strong time-management skills.
  • Detail oriented and highly organized.
  • Skilled in negotiation and project management.
  • Excellent critical thinking skills.

What is the difference between investment and asset management? ›

Asset managers and investment managers both aim to make decisions that earn their clients the most profit possible. Asset management focuses on handling a client's physical assets, while investment management is a more general term for handling a client's investments.

Where is it asset management is used? ›

IT Asset Management (ITAM) is a system of business practices that seeks to maximize the value of IT equipment within an organization by combining financial, contractual, and inventory data to track the status of IT assets across their lifecycle.

What are the components of asset management? ›

5 Elements of Effective Asset Management Programs
  • Strategy Development. At its foundation, strategy is simple. ...
  • Business Planning. Asset management requires careful planning at the people-systems-processes level. ...
  • Infrastructure Planning and Evaluation. ...
  • Decision Support. ...
  • Business Intelligence and Performance Reporting.
11 Feb 2021

How do you prepare for asset management? ›

How To Prepare For An Asset Management Interview?
  1. Know the markets inside and out. ...
  2. Prepare ~5 stock pitches.
  3. Understand how you would allocate the portfolios for different client archetypes.
  4. Brush up on basic accounting and finance topics, e.g., discounted cash flows; financial statements.
  5. Know your story, including:
6 Apr 2022

What are the 6 types of assets? ›

When we speak about assets in accounting, we're generally referring to six different categories: current assets, fixed assets, tangible assets, intangible assets, operating assets, and non-operating assets.

What are 4 types of investments? ›

There are four main investment types, or asset classes, that you can choose from, each with distinct characteristics, risks and benefits.
  • Growth investments. ...
  • Shares. ...
  • Property. ...
  • Defensive investments. ...
  • Cash. ...
  • Fixed interest.

Is private equity the same as asset management? ›

Both allow investors to make money on their investments in the form of dividends or through the company's eventual sale. The main difference between both firms is that private equity firms are typically buyout investors.

Why do I want to work in asset management? ›

"I enjoy the responsibility that comes with managing others' wealth. The opportunity to earn the trust of my clients and choose the best investment decisions for them based on their unique financial situation is one of my favorite aspects of the position.


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