Asset Management: Meaning and Types

When companies decide to acquire and own assets, they need a plan regarding investment, operating, maintaining, and disposing of assets. They need this plan to make sure that the assets they acquire prove to be profitable for the company. To devise such a plan, they need help of asset management companies.

Meaning of Asset Management

Asset management is the formulation of a strategy for investing, operating, maintaining, upgrading and disposing of the asset. Asset management is important to make sure that the company doesn’t incur costs more than its revenue from the asset.
Asset management is both for tangible and intangible assets and has become an important part of business strategy. Some of the industries that are employing asset management are oil and natural gas, finance, defense, aviation, manufacturing, IT, and service industry.

Types of Asset Management

1. Financial Asset Management

It means management of financial assets like shares, debentures, insurances, bank accounts, etc. It involves investment and disinvestment in financial assets. The process is about finding ways to procure funds and distributing profit among the investors.

2. Enterprise Asset Management

This involves management of fixed as well as intangible assets of an organization. Fixed assets include property, building, machines, furniture and vehicles. Examples of intangible assets are software, goodwill, trademark, and copyrights.

3. IT Asset Management

The management of the IT infrastructure of an organization is called IT asset management. It basically means governing and controlling hardware and software and involves maintenance and contract management of IT tools.

4. Digital Asset Management

An organization has digital assets like databases, software, websites, visual designs, patents and trade secrets, and email addresses. Management of all these assets is called digital asset management.

5. Transportation Asset Management

Transportation asset management is the concept of maintaining the transport facilities of an organization. It is applied to optimize that performance and cost-effectiveness of transportation facilities.

There is no organization today that is not using asset management. With the help of asset management, companies are able to ascertain the longevity of their asset and better management of it.

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