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Knowledge - Asset Management - What is Asset Management

What is Asset Management?

Almost everybody has probably heard the term Asset Management, but what does it really mean?

First of all, we need to clarify what we are talking about. What is an asset?

According to ISO 55000, an asset is: something that has potential or actual value to an organization.


Asset

item, thing or entity that has potential or actual value to an organization

This is a very broad definition and potentially includes a wide range of items, including financial assets and non-physical assets such as intellectual property.


Asset Management

coordinated activity of an organization to realize value from asset


Asset Management System

set of interrelated or interacting elements of an organization to establish asset management policy and objectives; and processes to achieve those objectives


If we think about the complexity of the physical asset portfolio in most organizations - the number of assets, technical sophistication, inter-dependencies and those interfaces with the other asset types - it is easy to see that asset management is not going to be a simple activity. It requires tools to understand the business objectives and the relationship with asset performance, tools to predict future performance, tools for acquiring, maintaining, operating and disposing of assets in the most efficient and effective way, tools for monitoring and adjusting performance and many more. All of this requires the sort of cross-divisional cooperation and information sharing. Consequently, asset management is usually delivered through a formal system of procedures and practices referred to as the “asset management system”. These are often based on the ISO 5500x series of International Standards.

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