What is Asset Management and what are its functions?
Assets are broadly classified as liquid assets and fixed assets. Examples of liquid assets are currency, bank deposits, bonds and stocks to name a few. These have an advantage of being liquidated easily when in need. Fixed assets are land and building, plant and
machinery that is immovable. It takes some time to convert them into cash when
necessary, and it is not so simple to do this.
Asset management is basically taking care of all the assets, making proper use of them
thereby gaining financial benefit out of them. What is Asset management can be better understood as per the definition “Systematic and coordinated activities and practices through which an organization optimally manages its physical assets and their associated performance, risks and expenditures over their lifecycles for the purpose of achieving its organizational strategic plot.”
Asset management is a vast subject and a lot of study has been done and is still being done to improve on it and to make the most of it, for instance how do we determine what is optimal, how do we improve the skills and how do we make the tools work better for us, so on and so forth. Excellent asset management teaches one how to sustain in this environment and be the leaders.
The essence of Asset management is the emergence of a whole new mix of responsibilities at the higher level like ‘Asset Owners’, ‘Asset Managers’ and ‘Service Deliverers’. All these functions require a lot of thinking as to what to invest in, how much to invest and for what period to invest, etc.
Now, all may not be equipped with the necessary expertise in the field of asset management and for such people there are a lot of excellent asset managers to help and take care of the assets and provide professional advice wherever necessary. These people are well trained in this field and have vast knowledge to help you make the right decisions.
Property Managers have become well loved these days and management of properties personal, commercial and business related are included. It involves functions like acquisition, proper documentation and paper work, maintenance, protection, utilization and disposal of the properties and other mandatory issues like paying of property tax, etc.
Similarly asset managers of a company are responsible for proper accounting of the assets, maintenance and repairs to the plant and machinery and replacing them when necessary. It is also their responsibility to identify the areas that need concentration to ensure that excellent returns are ensured. In the matter of human resources, they advice on the training to be imparted to the employees to improve their work, and also suggest how to keep the workers pleased and contended so that their turn out improves and simultaneously the profits too go up.
This is in a nutshell an answer to the question ‘What is Asset Management’.
