This is the second blog in our series discussing Asset Management and its importance in the modern enterprise. Our first blog focused on Asset Management’s effect on Compliance and Auditing. This week, we turn our attention to how Asset Management plays a role in the financial success of your organization.
Asset Management for Finance
As touched on in our previous blog, Asset Management is the process responsible for managing an organization’s assets throughout their lifecycle. In a Compliance and Auditing sense, it ensures that members of your Compliance team have up-to-date information regarding all assets under your organization’s umbrella, enabling them to avoid compliance lapses or errors. When it comes to Finance, however, Asset Management takes on a different role.
Its function for those in Finance-related roles is one of monitoring and management. Assets in all their forms represent a large financial investment from an organization, so it is no surprise that being able to accurately track, evaluate, and estimate their worth is of vital importance. After all, Asset Management and an organization’s profitability are innately linked.
Here we will take a look at how Asset Management enables Finance and Accounting staff members to accurately monitor an organization’s assets and their past, current, and future value through the lens of two common roles found in most organizations.
Chief Financial Officer (CFO)
A Chief Financial Officer is the senior executive responsible for managing all financial actions of an organization. These typically include:
- Tracking cash flow and financial planning
- Analyzing the company’s financial strengths and weaknesses
- Proposing corrective actions
- Ensuring the organizations’ financial reports are accurate
- Managing the Finance and Accounting departments
With these extensive responsibilities, CFOs must keep their finger on the pulse of their organization’s financial health—including the affect Assets have on it. As such, important concerns they must consider before choosing an Asset Management software include:
- How does our IT asset management solution integrate with our financial software or hardware?
- Will our budget process be negatively or positively impacted by this asset management software?
- Does this solution track all assets —tangible and intangible—throughout their life cycles?
- Will this help improve our existing budgeting and team resource allocation processes?
- How does modernizing our asset management system improve our current process?
A well-developed Asset Management solution will ensure that these key goals are met, all while staying within budget.
A Finance Director is a member of an organization’s senior executive team who works to maintain the company’s financial health. They actively combine operational and strategic roles, manage accounting and financial control functions, and build a financial strategy geared towards the organization’s long-term growth and success. Common responsibilities include:
- The ability to communicate complex financial information to both finance staff and non-specialists
- A high-level understanding of database technologies and software for financial analysis and reporting
- Sorting through real-time reporting from the IT system to better understand hardware and software depreciation
Enter Asset Management. It ensures that your Finance Director has the accurate, comprehensive information they need to make the right choice from a financial or budgetary perspective. By having access to all attributes of pertinent Assets, they can avoid unnecessary spending or a depreciated ROI.
Deploying an asset management solution that integrates with existing enterprise software is a critical component to solving for many challenges faced by financial teams. Equally important is tying the same system used for managing assets to other key organizational services like Incident and Change Management. Through integrated solutions, leaders are provided a holistic view of an asset’s cost, value contribution, and level of effort invested to keep it working.
Modern asset management solutions provide Financial leaders opportunities to partner with their IT teams in developing an enterprise wide view of the organization’s investments. The challenge is to find a single solution that can satisfy the current need, scale to grow with future investments, and do it in a way that adds value exceeding the cost to deploy.
It is time to break free from spreadsheets and stand-alone databases to ‘track’ assets and engage in a mature, data driven effort to ‘manage’ assets.