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Why good asset management is key to making renewable energy a cost effective alternative to non-renewables.
Successful software integrations can cut costs and save time. Find out how to manage your project effectively from start to finish.
How to avoid the most common mistakes that will derail your project
Sam was enthusiastic and friendly as she told me about her project to look for a new asset management system. Her company had built the current system in-house, but as they grew they realised they needed something a bit more comprehensive. It sounded like a great project, but being new to asset management software I didn’t see the warning signs.
Fast-forward 9 months and Sam sounded a lot less enthusiastic and I felt the same. Despite all the initial enthusiasm, and a lot of work, we were still no closer to deciding if the project would go ahead. Where did it all go so wrong?
Looking back, we made three simple mistakes that can derail any asset management project before it even gets going:
Sam’s title should have been a red flag – “Project Support”. It was not her fault, but she did not have the experience or authority to drive through a project this big. When a project does not have an internal project sponsor or ‘champion’ with the authority to agree or veto changes, they usually just get passed on to the potential supplier as an additional feature request.
The lack of a clear, well thought through and targeted project specification increases the risk of an overly complex solution that is delivered late and over budget. The worst case scenario is that the project gets bogged down through a lack of direction and multiple layers of complexity. It eventually gets shelved without ever being delivered, but still at a significant cost to the client.
George Harrison’s lyrics to ‘Any Road‘ could have been the theme for this project – “If you don’t know where you’re going, any road will take you there”. Asset management systems can cover anything from purchasing through production and sales orders, as well as depreciation, tracking and maintenance.
Typically, asset management projects will involve finance, operations and IT as a minimum, so the potential for scope creep is a big risk. Sam’s task was to find the best system, except no one really knew what that looked like.
When I asked Sam which finance package her company used, she sounded a bit surprised and asked why I needed to know. It had not occurred to her that any asset she managed would need to be loaded from somewhere and its value posted back.
A recent survey by the Access Group estimates that almost half of employees in the UK waste 3 hours a day or more on inefficient systems. A lack of integration can wipe out the savings that your new system is intended to deliver.
For more information on getting asset management systems right, have a read of the 10 Steps Guide to Asset Management.
What every asset manager should learn from Alice
“Begin at the beginning and go on til the end: then stop” Lewis Carroll, Alice in Wonderland
Lewis Carroll’s Alice in Wonderland may seem like a strange place to draw lessons on the best practice of integrated asset management. In truth there are plenty of industry leading companies who could save a lot of time and money by taking a closer look at the crazy world in which Alice finds herself.
Down the rabbit hole
Alice arrives in wonderland by falling down a seemingly never-ending rabbit hole. In practice the same is true of many of our assets. They end up falling down a big black hole somewhere between purchasing and payment; they just disappear. Imagine hiring an employee and paying the monthly salary cost, but never bothering to check if that employee showed up for work. The birth of vast HR programmes and systems is evidence of a responsible attitude to managing employees as valuable assets to the company, so why are fixed assets or equipment any different?
Physical assets need to be managed and supported by intelligent specialist systems in the same way as human resources. A business does not have separate HR systems for each department, but rather one holistic system. In contrast, most companies have little idea of how to implement a holistic asset management system and rely instead on a mix of stand-alone systems which do not talk to each other.
The Mad Hatter’s register
Finance departments will often point to the fixed asset register as a defence, after all it has a list of fixed assets and probably some information about them. A bit like the dormouse at the Mad Hatter’s tea party, who is only vaguely aware of what is happening around him, it is all too easy to get a false sense of security from what is in practice just a list. All too often it isn’t until the auditors start digging that it becomes clear just how out of date and inadequate this list actually is.
What is needed is a way of linking the fixed asset record to the physical asset. Much like joining an employee in HR to a payroll or time and attendance record. It isn’t that the information is not available, but more that it is held tightly by each department, well away from where it is needed. Capital Planners, Finance, IT, Operations, Maintenance, Logistics and Facility Managers are all a rich source of up-to-date information on what is really going on, they just don’t interact often enough, if at all.
A single view of value
Knowing where an item is and what has happened to it is not the only ‘truth’ that a business wants to know about its equipment, stock or assets. Lewis’ Queen of Hearts claimed to have “believed as many as six impossible things before breakfast”, and getting an accurate picture of an asset’s value can be the same. Every department has part of the picture, but not the full one. An item’s real value may be composed of its purchase price, maintenance history, utilisation and lease information, all of which may be collected partly or fully by different people at different times.
Every asset needs a global ID before you can start to get a full picture. It is essential that all equipment or asset items are goods receipted correctly against this ID. All items should be registered with a single asset management system and then passed through to the correct departmental in-tray for additional coding. Begin recording and building a global integrated view at the beginning and then go on til the end: then stop.
Be clear about why
Building a singular view of your company’s assets can be a daunting task. By definition, it requires buy-in from all stakeholders in the business, most of whom will have a deeply ingrained “way of doing things”. You’d be forgiven for echoing Alice’s sentiment that “I don’t want to go among mad people”. Fractured reporting and management is usually an organic problem, it starts from the bottom and moves up. Like any similar problem, it requires strong leadership and clear mandate from senior management to overcome it.
The bigger picture
What organisation does not have an HR Director or Manager? Very few of any real size or complexity. So why not have an Asset Resource Director or Manager? Regardless of the historic valuation, write-off or type of funding, every asset rich business should have an asset resource management function. This function in turn should be built around a core asset resource management system with specialist linked systems covering every aspect of the life-cycle of an asset.
So to begin at the beginning we need the processes, culture and people to avoid the rabbit hole. A Global Asset Manager charged with ensuring correct and efficient protocols is needed for maximising the return on investment of all physical or virtual assets.
Without this beginning the lack of asset management will be “curiouser and curiouser!”
The recent Access Group customer events 2014 for Not For Profit and Supply Chain customers proved a great success for clients and partners.
Purchase Order Processing case study
Exponent: engineering and scientific consulting
Exponent is an international engineering and scientific consulting company with 25 offices worldwide. Their engineers and scientists have worked on many high profile incidents.
Because Exponent staff are involved in a diverse range of projects, they needed a comprehensive but flexible purchase order processing (POP) software system. Their requirements included access to an approval process that allows their requisition orders to be signed off by the appropriate staff in line with their individual approval limits and project association, before the purchase orders are automatically generated.
Deltek Vision integration
Because Exponent already used Deltek Vision, they needed purchase order processing software that linked directly with their existing system. All FMIS products including Purchase Order Processing are designed to integrate directly with the Vision software. FMIS Purchase Order Processing will automatically match purchase orders against the relevant invoice, with any amends flagged for approval before posting to the general ledger in Vision.
When considering suppliers, Exponent wanted to be confident that their chosen provider had the experience and stability to provide the level of service required over the long term. FMIS software is used in over 40 countries worldwide and has been leading the industry for over 30 years, thus Exponent was able to call industry leading clients, such as Transammonia as a reference.
Beware of the fixed asset spreadsheet
It is the age old question in fixed assets. Why pay for fixed asset software when you can keep track of it on the trusty office spreadsheet?
We recently came across an article by Liz Fisher in Accounting & Business which dates back to 2003 (view it here) and most of the issues she raised are as true now as they were then. In an age of increasing pressure on budgets, it can be hard to justify the expenditure of rolling out a new fixed asset or asset management system. Here are 5 reasons why it may just be false economy to go cheap.
1. No audit trail
Spreadsheets have no audit trail. Sure you can do some pretty fancy things with macros and Visual Basic in the background, but in the end someone will always find a way round it (I know, I have tried often enough). Any decent fixed assets software will have a comprehensive and secure audit trail, so when the auditors start asking awkward questions about your assets, you don’t get that sinking feeling in your stomach.
2. It doesn’t really save you time
Researching, purchasing and learning a new fixed assets solution can be time consuming, so surely it makes sense to stick with what you know? The truth is, once you add in the amount of time it takes you to start unpicking the gaps in your data every month and manually creating postings back to the general ledger, it soon looks a bit less sensible.
3. Single point of failure
An accounting friend at a large financial services firm in the UK repeatedly warned me of the risks of using any system that only one person fully understands. Good advice, especially if he had listened to it himself. When one of his team left suddenly, it soon became very clear that no-one else understood the spreadsheets he had been using for the last few years. They had just pressed the ‘report’ button and he looked after the rest. Fixed asset spreadsheets don’t usually come with a very good support plan!
4. Size does matter
It made sense at the time, after all who needs an expensive system to track a few desktops, a photocopier and the microwave? 5 years down the line, business has been good and you now have to try and migrate several thousand assets from your spreadsheet to your new fixed asset register. Most fixed asset software will allow you to do a bulk import, but it is still going to get more complicated the longer you leave it.
5. One size doesn’t fit all
Every area of the business needs to report on fixed assets in a different way. Whilst a commercial solution will do this (to varying degrees), your old fixed asset spreadsheet probably doesn’t. Most often the spreadsheet was started by and designed for one specific department and each area of the business had it’s own one. When you start multiplying that across different offices, divisions and even countries the chances of getting a coherent picture of your fixed asset register rapidly shrink.
10 steps to follow and 10 questions you need to ask
Choosing the right fixed asset management and tracking software for your business can be a complicated process, so we have put together the 10 Steps Asset Management Software Guide to help guide you it. The number of different solutions and providers can make finding the right option pretty difficult if you are not sure what you need. Over 25 years’ experience in providing a range of leading asset management software and solutions have highlighted the importance of asking the right questions before you start. Now we have condensed all these into one comprehensive guide. We’ll cover the 10 simple steps to take and the 10 tough questions you need to ask when choosing asset management software.
10 simple steps
Changing any system can be daunting, particularly when it needs to be closely integrated with other existing systems. Our experience is that breaking down the process into a number of steps makes the transition manageable, far more likely to go smoothly and easier to schedule. These 10 steps will help ensure that you have considered not only the immediate issues, but that your ultimate asset management system meets the long term needs of your business.
- Step 1 Understand the need
- Step 2 Pick a partner not a product
- Step 3 Map the asset life cycle
- Step 4 Decide how to code your assets
- Step 5 Select an asset management system
- Step 6 Integrate related systems
- Step 7 Decide how best to use barcoding
- Step 8 Audit and reconcile
- Step 9 Implement with care and assistance
- Step 10 Maintain, maintain, maintain!
10 Tough questions
A good salesman can make almost any product look like a great option in a quick one off demo, but making the right long term decision when choosing asset management software means asking the tough questions that aren’t always answered in the brochure. If the product is really up to the task, the provider won’t mind going through these 10 tough questions:
- Q1 How easy is it to use and how easy is it to maintain?
- Q2 Are all depreciation methods supported – for every country, legal entity and requirement?
- Q3 Is the system multi-company, multi-currency and multi-book?
- Q4 Can the system be tuned to reflect my own specific requirements?
- Q5 Are reporting and enquiry facilities comprehensive, flexible and easy to use?
- Q6 Can the system handle real-life mistakes and problems?
- Q7 Will it work with my existing systems and be accessible from any location?
- Q8 Does the system cover each and every aspect of asset management?
- Q9 Can the system be used for budgeting and forecasting?
- Q10 How exactly does month end work?
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FMIS Fixed Assets v11 release
The latest version of FMIS Fixed Assets software, v11, has now released. It brings with it significant improvements in many areas, especially for high volume users and those who want to see even more detailed reconciliation reports on their fixed assets at year end.
Many of our clients have already upgraded to the latest version free of charge, but if you are still running an older version, upgrading is normally quick and easy and most importantly free. For more information, or to request an upgrade to FMIS Fixed Assets v11, simply contact us using the form below or via the support page.
Not yet using FMIS Fixed Assets?
If you don’t currently use FMIS Fixed Assets software, you may be interested to know that we offer free upgrades to all our clients. Whenever we make an improvement, we offer it free to all our clients. To find out more about FMIS Fixed Assets, have a look at our product page or get in touch with us directly.