Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible

asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...

s (physical objects such as buildings or equipment) and to intangible assets (such as human capital,

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...

, goodwill or

financial assets A financial asset is a non-physical asset whose value is derived from a contractual claim, such as bank deposits, bonds, and participations in companies' share capital. Financial assets are usually more liquid than other tangible assets, such as ...

). 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). The term is commonly used in the financial sector to describe people and companies who manage investments on behalf of others. Those include, for example,

investment managers Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...

that manage the assets of a pension fund. It is also increasingly used in both the business world and

public infrastructure Public infrastructure is infrastructure owned or available for use by the public (represented by the government). It is distinguishable from generic or private infrastructure in terms of policy, financing, purpose, etc. Public infrastructure is ...

sectors to ensure a coordinated approach to the

optimization Mathematical optimization (alternatively spelled ''optimisation'') or mathematical programming is the selection of a best element, with regard to some criterion, from some set of available alternatives. It is generally divided into two subfi ...

of costs, risks, service/performance, and sustainability.

ISO 55000 ISO 55000 is an international standard covering management of assets of any kind. Before it, a Publicly Available Specification (PAS 55) was published by the British Standards Institution in 2004 for physical assets. The ISO 55000 series of Asset ...

, being developed by ISO TC 251, provides an introduction and requirements specification for a management system for asset management.

By industry

Financial asset management

The most common usage of the term portfolio manager (asset manager) refers to

investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...

, the sector of the

financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...

industry that manages

investment fund An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages inc ...

s and segregated client accounts. Asset management is part of a financial company that employs experts who manage money and handle the investments of clients. This is done either actively or passively. * Active asset management: this involves active tasks such as studying the client's assets to planning and looking after the investments, all things are looked after by the asset managers, and recommendations are provided based on the financial health of each client. Active asset management comes at a higher price to investors because more work is involved. * Passive asset management: assets are allocated to mirror a market or a sector index. Unlike active asset management, passive asset management is a lot less laborious. It is also less tailored, requires less looking after, and consequently is cheaper for investors.

Physical and Infrastructure asset management

Infrastructure asset management is the combination of management, financial, economic, engineering, and other practices applied to physical assets to provide the best value level of service for the costs involved. It includes the management of the entire life cycle—including design, construction, commissioning, operating, maintaining, repairing, modifying, replacing, and decommissioning/disposal—of physical and infrastructure assets. Operation and maintenance of assets in a constrained budget environment require a prioritization scheme. As a way of illustration, the recent development of

renewable energy Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...

has seen the rise of effective asset managers involved in the management of solar systems (solar parks, rooftops, and windmills). These teams often collaborate with financial asset managers in order to offer

turnkey A turnkey, a turnkey project, or a turnkey operation (also spelled turn-key) is a type of project that is constructed so that it can be sold to any buyer as a completed product. This is contrasted with build to order, where the constructor builds ...

solutions to investors. Infrastructure asset management became very important in most of the developed countries in the 21st century, since their infrastructure network was almost completed in the 20th century and they have to manage to operate and maintain them cost-effectively. Software asset management is one kind of infrastructure asset management. The International Organization for

Standardization Standardization or standardisation is the process of implementing and developing technical standards based on the consensus of different parties that include firms, users, interest groups, standards organizations and governments. Standardization ...

published its management system standard for asset management in 2014. The

series provides terminology, requirements, and guidance for implementing, maintaining and improving an effective asset management system. The key to forming a structure of this sort is directly connected to local governance. * Physical asset management: the practice of managing the entire life cycle (design, construction, commissioning, operating, maintaining, repairing, modifying, replacing, and decommissioning/disposal) of physical and infrastructure assets such as structures, production, and service plant, power, water, and waste treatment facilities, distribution networks, transport systems, buildings, and other physical assets. The increasing availability of data from asset systems is allowing the principles of

Total Cost of Ownership Total cost of ownership (TCO) is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or service. It is a management accounting concept that can be used in full cost accounting or even ecolog ...

to be applied to facility management of an individual system, a building, or across a campus. Physical asset management is related to asset health management. *

Infrastructure asset management Infrastructure asset management is the integrated, multidisciplinary set of strategies in sustaining public infrastructure assets such as water treatment facilities, sewer lines, roads, utility grids, bridges, and railways. Generally, the process ...

expands on this theme in relation primarily to the public sector,

utilities A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and r ...

, property, and transport systems. Additionally, Asset Management can refer to shaping the future interfaces between the human, built, and natural environments through collaborative and evidence-based decision processes *

Fixed assets management Fixed assets management is an accounting process that seeks to track fixed assets for the purposes of financial accounting, preventive maintenance, and theft deterrence. Organizations face a significant challenge to track the location, quantity, co ...

: an accounting process that seeks to track fixed assets for

financial accounting Financial accounting is the field of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. Stockholders, s ...

IT asset management Data center management is the collection of tasks performed by those responsible for managing ongoing operation of a data center This includes ''Business service management'' and planning for the future. Historically, ''data center management'' wa ...

: the set of business practices that join financial, contractual, and inventory functions to support life cycle management and strategic decision making for the IT environment. *

Digital asset management Digital asset management (DAM) and the implementation of its use as a computer application is required in the collection of digital assets to ensure that the owner, and possibly their delegates, can perform operations on the data files. Termi ...

: a form of electronic media

content management Content management (CM) is a set of processes and technologies that supports the collection, managing, and publishing of information in any form or medium. When stored and accessed via computers, this information may be more specifically referre ...

that includes digital assets

Enterprise asset management

Enterprise asset management Enterprise asset management (EAM) involves the management of the maintenance of physical assets of an organization throughout each asset's lifecycle. EAM is used to plan, optimize, execute, and track the needed maintenance activities with the associ ...

(EAM) systems are asset ''information'' systems that support the management of an organization's assets. An EAM includes an asset registry (inventory of assets and their attributes) combined with a

computerized maintenance management system A computerized maintenance management system (CMMS), also known as a computerized maintenance management information system (CMMIS), is any software package that maintains a computer database of information about an organization's maintenance o ...

(CMMS) and other modules (such as inventory or materials management). Assets that are geographically distributed, interconnected or networked, are often also represented through the use of geographic information systems (GIS). GIS-centric asset registry standardizes data and improves interoperability, providing users the capability to reuse, coordinate, and share information efficiently and effectively. A GIS platform combined with information of both the "hard" and "soft" assets helps to remove the traditional silos of departmental functions. While the

hard asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...

s are the typical physical assets or infrastructure assets, the soft assets might include permits, licenses, brands, patents, right-of-ways, and other entitlements or valued items. The EAM system is only one of the 'enables' of good asset management. Asset managers need to make informed decisions to fulfill their organizational goals, this requires good asset information but also leadership, clarity of strategic priorities, competencies, inter-departmental collaboration and communications, workforce, and supply chain engagement, risk and change management systems, performance monitoring, and continual improvement.

Public asset management

Public asset management expands the definition of enterprise asset management (EAM) by incorporating the management of all things of value to a municipal

jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Jur ...

and its citizens' expectations. An example in which public asset management is used is land-use development and planning.

Intellectual and non-physical asset management

Increasingly both consumers and organizations use assets, e.g. software, music, books, etc. where the user's rights are constrained by a license agreement. An asset management system would identify the constraints upon such licenses, e.g. a period. If, for example, one licenses software, often the license is for a given period. Adobe and Microsoft both offer time-based software licenses. In both the corporate and consumer worlds, there is a distinction between software ownership and the updating of software. One may own a version of the software, but not newer versions of the software. Cellular phones are often not updated by vendors, in an attempt to force a purchase of newer hardware. Large companies such as

Oracle An oracle is a person or agency considered to provide wise and insightful counsel or prophetic predictions, most notably including precognition of the future, inspired by deities. As such, it is a form of divination. Description The word '' ...

, that license software to clients distinguish between the right to use and the right to receive maintenance/support.

References

External links

ISO/TC 251 - ISO Asset Management Information

IAM page for an introduction to Asset Management

Stages in IT Asset Lifecycle Management
{{Authority control Management accounting Valuation (finance)