The 4 Stages of Asset Lifecycle Management

Stage 2: Acquisition

The planning stage will help you identify areas where your current assets are underperforming and require replacement, or are insufficient and need to be enhanced or complemented with other resources.

This takes you on to the next phase of asset lifecycle management: acquisition. It's vital to go through robust and thorough planning before committing to any asset purchase, so you can have maximum confidence that the acquisition is completely necessary and will generate value for the business.

Once you're convinced of the need to acquire a particular asset, it's likely that your next consideration will be cost. How much are you willing and able to pay upfront to make the purchase, but just as importantly, what is the total cost of ownership? If a piece of equipment costs just as much to maintain and repair as it does to buy, it might not be a viable investment for your business.

One of the wisest things you can do in the acquisition phase is to research the various options available to you and compare them. When negotiating with vendors, ask for demonstrations, testimonials from past buyers and other assurances that the asset will meet your expectations and deliver ROI.

Stage 3: Operation and maintenance

In this phase - the longest portion of the typical asset lifecycle - you're using and working to gain maximum value from the items on your asset register. It's during this time that the importance of the first two parts of the process becomes clear. If you've planned effectively and made the right acquisitions, this is when you reap the benefits and the business experiences the value of its assets.

To maximize these positive results, it's crucial to conduct routine maintenance to keep your assets efficient, secure and in good working order. Maintenance is clearly important for physical items like manufacturing equipment, but it's also necessary for intangible resources like software. A good IT asset management plan will include regular checks and maintenance to ensure your data is safe and your systems are protected from viruses and cyberattacks.

Another key focus during this phase is tracking how your assets are performing, so you can draw accurate conclusions about whether they're up to the standard you require. If certain assets are falling below your expectations or failing to deliver value, it's time to ask if they can be better managed, updated or redeployed, or if they’ve simply reached the end of their lifecycle.

Stage 4: Disposal

Disposal is the final stage in the lifecycle of an asset owned by a business. It comes when you conclude that the asset no longer holds any value for the company and therefore isn’t financially viable.

However, a resource that has ceased to be useful or financially justifiable for you may still hold some worth for others. Local schools or libraries, for example, might be able to make use of computers that are no longer powerful enough to meet your needs, but can still manage basic word processing or internet browsing.

It's important to ensure that any data relevant to your organization is wiped before assets are offloaded, and disposal is carefully managed to mitigate any environmental impact.

Getting rid of assets could also create fresh requirements for the business, which will take you back to the planning stage as you start looking into the next acquisitions you need to make.