5 Stages of Asset Lifecycle Management that You Need to Know

Asset Management Lifecycle - Explained!  

An IT asset lifecycle involves everything from determining the need for an asset to the time when the useful life of an asset ends, finally disposing of it off. Simply put, an IT asset life cycle is the gradual sequence of stages focused on asset management.

The procedure of managing assets where enterprises maximize the usable life of assets using planning, procuring, deploying, maintaining, disposing, or recycling assets refers to asset lifecycle management.

A carefully planned asset lifecycle management process saves time, money, and resources. It also expands the lifespan of assets, eases the maintenance cost over its entire life, and lowers the odds of an impromptu breakdown.

Why is Asset Management Lifecycle Important?  

Whether it is small, medium, or large-sized, all business operations rely on its assets. By keeping up the asset efficiency, not only the asset inventory remains updated, but it reduces the related overhead expenses too.

Each asset has a life cycle, which includes the time when it works at the optimum utility. However, after optimal usage, it wears out, leading to a decrease in operational life and an increase in maintenance.

When a business deploys robust asset lifecycle management, it gets the advantage of knowing when an asset will achieve its optimum utility and finding out the remaining usable life. This helps businesses proactively plan for asset replacement or maintenance.

A business can improve efficiency, profitability, and operational productivity through an asset management lifecycle. Managing costs at each stage and analyzing actions to lessen risks are vital elements of asset lifecycle management.

5 Key Stages of Asset Management Lifecycle:  

• Planning
• Acquisition
• Utilization
• Maintenance
• Disposal

We will understand the stages of the asset management lifecycle with an example. Let's say an IT Company is onboarding ten new employees - they have five existing laptops in good condition, but they need to purchase five more. So here's the stagewise process that needs to be followed:

Planning 

Planning is the most crucial stage of the asset management lifecycle. The procurement team may work with the departments in which onboarding employees will join to define specific needs. Often at the planning stage, many mistakes occur, which can lead to chaos in the long run. For instance, the team overestimates a laptop's lifespan, and the laptop needs an early replacement. So, enterprises should scope out the probable lifespan and then make a decision.

For example, the planning stage commences when a need to purchase laptops for an organization is determined. So, now look for which laptops are required and which will serve the purpose. Eventually, the type of laptop model that meets the requirement will move to the acquisition phase. Many factors, such as cost, expected lifespan, and maintenance schedule, get considered when buying an asset.

Acquisition 

When an enterprise has acquired an asset, in our example, laptops, it is a part of the acquisition stage. All the information collected in the planning stage becomes useful now. In the acquisition stage, the cost gets a higher priority. But along with the expense, you also need to consider the total cost of ownership. Installation and deployment are also part of the acquisition process.

If the price of the laptop and the cost you need to pay for software, installation, applications, services on the campus network, maintenance, repair, etc., for it to be in use is almost the same, then this may be an impractical investment. You can negotiate with the vendor on the price front and ask for a demo and past testimonials. The best thing you can do is look for similar laptop options and compare prices.

Utilization 

After the asset is purchased, it is brought to the facility and deployed. In the utilization phase, the asset starts to provide value to the organization. For example, the laptops are in-use and help employees perform tasks, get beneficial outcomes and generate revenue for the organization in the utilization phase. You can get the best out of your laptops and gain more positive results by maximizing their operational life. In this stage, it's crucial to specify the maintenance strategy the asset will undergo.

Ideally, you can increase the operational life of an asset through meticulous observation, asset tagging, and implementing an automated ITSM asset management solution. For example, a robust asset management solution will track all the laptops and prepare a preventive maintenance schedule based on the warranty period. You can also derive the depreciation value of an asset using various methods such as straight-line, double declining, the sum of the years' digits, and units of production through asset management software.

Maintenance 

Generally, the maintenance of assets is a part of the utilization stage. The reason being the maintenance of assets starts at the utilization stage when capitalized. With time, as the asset wears and tears, routine or preventive maintenance becomes an essential part of its asset lifecycle. Asset maintenance is crucial for physical assets such as printers, laptops, etc. However, it's equally necessary for intangible assets like software.

The maintenance strategy of assets may vary from organization to organization. In the absence of a maintenance process, companies have no option but to use a reactive maintenance approach. While companies with a streamlined maintenance process ensure using a preventive maintenance approach. Laptops or PCs are such assets where a preventive maintenance approach may work well since it helps you to know if it is safe from cyberattacks and viruses. This prevents any bottlenecks in laptops or PCs, resulting in:

• Lower downtime
• Increasing the uptime
• Extending life expectancy
• Reducing or preventing emergency repairs that may cost high

Disposal 

Even though you may find it difficult to let go, understand that sometimes the disposal of an asset makes more sense than maintenance. When the asset is not financially feasible anymore and may not be able to provide any significance, it's time to dispose of it. However, disposal does not mean putting it in scrap. Instead, it would be best to dispose of the asset in a way that does not harm the environment. Also, remove all the data from your laptop before offloading the asset.

The disposal can be carried out in several ways, particularly for electronic devices. You can repurpose, recycle, or sell the laptop. You can connect with an electronic recycling facility that recycles electronics, such as laptops, usually for free. If not recycling, you can give it to someone. Companies often pass off their used assets to someone who can find them helpful. For example, if your business laptops are no more valuable to your employees, it may help someone who simply needs a laptop to use a web browser or Microsoft Office.

If you need a replacement of the asset, begin with the stages of the asset lifecycle again!

In essence,  

Asset management lifecycle is essential for your business since it aids you in optimizing the asset performance and increasing its usable life. An asset's lifecycle starts at the planning stage and continues sequentially to the stage where the asset is not valuable for the organization. A good asset management solution helps you know an asset's functional life, usability, and performance. All in all, it saves costs, prevents downtime, and makes life easier.

When you remain inattentive to the asset lifecycle, it can bring you inefficient outcomes. In the end, all we have to say is that IT asset management is a priority, not an option.