Is your asset management software delivering value?

Is it even possible to define return on investment (ROI) on something as complex as applying software to support asset management? In this blog, we look at these four questions you can ask:

1. Do you have the right asset management foundation in place?
2. Is the software making it easier to manage your asset information over time?
3. Can the software improve how you analyse asset data?
4. Are you able to improve decision-making, especially in relation to medium to longer term asset planning?

For many organisations, especially in the social infrastructure industries, it’s important to look at return on investment in broader terms rather than purely financial. While the dollars saved or earned by an initiative remain crucial, other non-financial values such as social, community, cultural or environmental benefits need to also be factored in.

For ROI on asset management software in community housing for example, the focus is how the system supports them to manage risks better and provide a better level of service to the community or customers rather than the financial returns. Organisations can use this broader sense of return in terms of impact on its stakeholders, improved performance and of course financial gains, typically in the form of reduced costs or doing more effective projects for the same expenditure.

With this grain of salt deposited, what should you consider to gauge whether your asset management software is delivering value?

1. Do you have the right asset management foundation in place?

An organisation needs to have an asset management framework in place to exploit software effectively. There are four keys to ensuring a solid foundation:

• Knowing what you have: 
  An information management strategy that describes ways to obtain the appropriate level ofasset data suitable to the needs of the organisation, and ensuring this information is appropriately maintained as an ongoing business process that is well resourced.
  
• Know what you need:
  Defined levels of service, policies and standards. Understand the risks each property is exposed to – know the functional and compliance requirements and understand utilisation as demand varies over time.
• Know what’s possible and do the right thing:
  Armed with the information from the above steps, develop a list of possible solutions to address current and future shortfalls – both evidence-based from the bottom-up and judgement from the top-down.
• Making it happen and feedback:
  Your list of prioritised projects is considered within budgets and, where needed, the governing body decides on what’s more important considering wider strategies.

Asset management software should support this process - making it faster, easier and more transparent. The best AM software available will only deliver value if there is a strong underlying asset management framework.

2. Is the software making it easier to manage your asset information over time?

Collecting and maintaining asset data is what fuels the asset management process. An effective technology solution will help organisations manage this data – having the technology specifically configured to the business needs.

For example, a customer of SPM Assets maintains residential healthcare locations across Australia. A traditional condition assessment would require visiting literally hundreds of rooms to describe the components that make up a facility.

Using advanced asset management software, the organisation can record a thorough survey of a representative sample of rooms then intelligently clone that data across the rest of the facility to develop a comprehensive picture of that facility’s condition. This significantly reduces asset inspection time, allowing an inspector to focus on the highest value, most critical components.

An organisation makes a compromise in terms of getting an overall assessment that is at least 80% accurate, as opposed to 100% accuracy if every room of every facility was assessed individually. But the return in terms of cost reduction and time to complete is significantly improved, and the data gathered is still a strong foundation that will be improved on in a targeted way over time – this is what’s needed for good project level decision-making.

3. Can the software improve how you analyse asset data?

Asset management software will also deliver a return on the investment if the process of turning data into insights is improved.

Field staff might traditionally have used systems such as spreadsheets or other simple data collection tools to record assessments. All that does is provide a repository for the data, then it has to be determined how it can be stored for future reference and how it can flow into downstream apps for analysis.

Using a single platform for gathering, analysing and presenting asset management data means that reliable information is immediately available through BI tools and preconfigured reports and dashboards. Asset Managers, Asset Analysts and Facility Managers can make better informed decisions and are better placed to move more towards a planned approach which avoids a more costly, reactive approach.

4. Are you able to improve decision-making, especially in relation to medium to longer term asset planning?

A key benefit of effective asset management software is that you are equipped with the knowledge that the right projects are being done at the right time for the right reasons. That can both create cost savings and equip your asset management team to gain more budget over time.

Economies of scale in procurement is one example where decisions can be made that reduce property costs. With a clear view of what components might need to be upgraded across a property portfolio, and which projects are more important, you have the power to get favourable pricing from providers.

For instance, an SPM Assets’ customer identified a need to replace several air conditioning units at one site. By using their software to do analysis across all 17 sites they could identify the total number of replacements required over a two year period and obtain an excellent price for a much larger order.

A broader example of ROI could be a property management team being able to bid for more budget in a cost-constrained environment – possibly competing with other departments. Where public funding is involved there are always several competing demands, and being able to build a compelling business case, along with clear evidence, is more likely to attract funding. To give an example, if an Asset Manager can provide evidence that a 5% increase in annual budget will better identify and manage risks, help prolong the life of critical assets, while optimising costs, decision-makers are more likely to be convinced.

Whether it is saving real dollars on property assessments, or making much longer term strategic decisions, having the right asset management software in place to enable good asset management practices, will provide a positive return.

To learn more about the ROI of asset management and get tips for building a business case read our blog: Calculating the return on investment of your asset management solution is not just about the money.

Learn more about SPM’s property lifecycle asset management software.