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Asset management refers to 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
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 (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 most well-known types are copyright ...
, goodwill or
financial assets A financial asset is a non-physical 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 positiv ...
). 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 that manage the assets of a
pension fund A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides pension, retirement income. Pension funds typically have large amounts of money to invest and are the major investors in listed and ...
. It is also increasingly used in both the business world and
public infrastructure Public infrastructure is infrastructure Infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms. Serving a country, city, or other area, including the services and facilitie ...
sectors to ensure a coordinated approach to the optimization of costs, risks, service/performance and sustainability. The International Standard,
ISO 55000 ISO 55000 is an international standard are technical standards developed by international organizations (intergovernmental organizations), such as Codex Alimentarius in food, the World Health Organization Guidelines in health, or International Tele ...
, 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 "asset manager" refers to
investment management Investment management is the professional asset management of various securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument Finance is the study of financial institutions, fin ...
, the sector of the
financial services Financial services are the economic services provided by the finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of mone ...
industry that manages
investment fund Image:Financial info.jpg, The values and performance of collective funds are listed in newspapers. An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as p ...
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 with the objective of providing 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 resource File:Global Vegetation.jpg, Global vegetation A renewable resource, also known as a flow resource, is a natural resource which will replenish to replace the portion resour ...
has seen the rise of effective asset managers involved in the management of solar systems (solar park, 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 managementSoftware asset management (SAM) is a business practice that involves managing and optimizing the purchase, deployment, maintenance, utilization, and disposal of software applications within an organization. According to ITIL ITIL (formerly Inform ...
is one kind of infrastructure asset management. The International Organization for Standardization published its management system standard for asset management in 2014. The
ISO 55000 ISO 55000 is an international standard are technical standards developed by international organizations (intergovernmental organizations), such as Codex Alimentarius in food, the World Health Organization Guidelines in health, or International Tele ...
series provides terminology, requirements, and guidance for implementing, maintaining and improving an effective asset management system. * 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 Indirect costs are costs that are not directly accountable to a cost object (such as a particular project, facility, fu ...
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 Water treatment is any process that improves the quality of water Water is an In ...
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 State ownership, publi ...

utilities
, 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 managementFixed assets management is an accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporations. Account ...
: an accounting process that seeks to track fixed assets for the purposes of
financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporatio ...
* IT asset management: 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 Operations on a collection of digital assets require the use of a computer application implementing Digital Asset Management (DAM) to ensure that the owner, and possibly their delegates, can perform operations on the data files. Management operat ...
: 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 referred to ...
that includes digital assets


Enterprise asset management

Enterprise asset managementEnterprise 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 associa ...
(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 Computerized maintenance management system (CMMS), also known as computerized maintenance management information system (CMMIS), is a software package that maintains a computer database of information about an organization's maintenance operations. ...
(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 in an efficient and effective manner. 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 assetIn finance, a "hard asset" may be real estate, commodities, or energy.Assaf Razin, Understanding Global Crises: An Emerging Paradigm' (MIT Press, 2014), at 1.1. For example, Gold as an investment, gold and Silver as an investment, silver are regarded ...
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' to good asset management. Asset managers need to make informed decisions in order 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 Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the power of the ...
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 time period. If, for example, one licenses software, often the license is for a given period of time. 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 Agency may refer to: * a governmental or other institution Institutions, according to Samuel P. Huntington, are "stable, valued, recurring patterns of behavior". Institutions can refer to mechanisms which go ...
, that license software to clients distinguish between the right to use and the right to receive maintenance/support.


See also

*
Asset management firm An asset management company (AMC) is an asset management / investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other asset In financial accountancy, fina ...
* IT asset management *
List of asset management firms An asset management company (AMC) is an asset management / investment management company/firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives. For a fee, the company/firm provides more D ...
* P2P asset management *
Robo-advisorRobo-advisors or robo-advisers are a class of financial adviser A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must co ...
*
Software asset managementSoftware asset management (SAM) is a business practice that involves managing and optimizing the purchase, deployment, maintenance, utilization, and disposal of software applications within an organization. According to ITIL ITIL (formerly Inform ...
*
ISO 55000 ISO 55000 is an international standard are technical standards developed by international organizations (intergovernmental organizations), such as Codex Alimentarius in food, the World Health Organization Guidelines in health, or International Tele ...


References


Further reading

* Baird, G. "Defining Public Asset Management for Municipal Water Utilities". ''Journal American Water Works Association'' May 2011, 103:5:30, www.awwa.org


External links


ISO/TC 251 - ISO Asset Management Information



IAM page for introduction to Asset Management

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