Most businesses rely on the efficient tracking of their in-service equipment and management of their key inventories as a way of enhancing productivity. Although this can be helpful to an extent, it does not fully optimize the potentials in them.
The role of asset management in an oil and gas business cannot be overlooked. Using asset tracking and management system to ensure comprehensive data availability can be used to generate intelligence which can be transformed into efficiency.
Interestingly, the tools are easily available, you only need to make it your priority.
What is Asset Management?
Several people have attempted to define the term “asset management”. Most of these definitions deal with financial management while others tend to focus on some other management structure. (Wikipedia has a broader definition of this)
However, regardless of the event, the major definition of asset management remains “the systematic process of identifying, classifying, monitoring, assessing, maintaining, upgrading, and replacing the physical assets of an establishment in a cost-effective way”.
To be fully effective, all processes must be based on a foundation of widely accepted principles which is backed up by a number of reputable business practices and financial acumen.
Proper asset management can provide an effective tool that can be used to achieve both the short-term and long-term objective of an oil and gas business. Consequently, it is a system all businesses should strive to embrace.
Generally, asset management can be simplified to comprise the following four basic components.
- A tool that generates and maintain critical information for internal use of the company as well as the clients or customers
- A holistic process of acquiring, validating, and assimilating data into corporate information systems
- A flexible system which allows for the manual acquisition and/or digital capture of data
- A program that accurately reports the critical business and operational information.
What are the Signs, Symptoms, and Effects of Poor Asset Management?
Precisely, poor asset management causes poor data quality and poor data quality can have a negative effect on the business over a period of time.
The common causes of poor asset management include lack of business controls for evaluation and/or upgrading of asset data, ineffective management of asset data quality, and inadequate investment in process, people, data, and technology.
The basic signs of poor asset management are quite common. It includes incessant security issues, uncontrollable capital and/or expense budgets, too much network downtimes and poor performance, irrelevant software applications, under or over-use of assets, increased operational cost, and many more.
More so, consistent poor asset management practices can negatively affect the overall business activities. It can degrade the customer delivery, pollute the existing database, and distract sales resources.
Generally, the effect of poor asset management on a business can range from mild to fatal, causing any of the following extreme negative impacts.
Yes, the causes of poor asset management can be many, the symptoms can be ubiquitous, and the outcome can be fatal. However, the good news is that there are effective solutions that can help you and your business to avoid these pitfalls. Contact us today to learn more.