Why Organizations Should Have an Asset Management System based on ISO 55001?

Why Organizations Should Have an Asset Management System based on ISO 55001?

26 Jun 2022

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This informal CPD article Why Organizations Should Have an Asset Management System based on ISO 55001 was provided by Punyam Academy, an industry leader in training of international compliance standards.

The ISO 55001 Asset Management system is now considered one of the most powerful tools for managing assets of any organization. For an organization, an asset is any item, thing or entity that has a potential or actual value to an organization. It is basically a resource, property or anything of monetary value owned by a person or a business or an organization. Assets are capable to generate some economic value for the organization. When brought into business, they increase the value and productivity of the business. The period from the creation of an asset to the end of its life is called the “asset life” and it includes consideration of risk and liabilities.

Clearly, assets are very important for many businesses and in order to maintain, develop, keep track of and manage assets throughout the asset life, organizations need a well-structured system and processes. Asset Management involves balancing of asset costs, identifying risks and opportunities against the desired performance of assets to achieve the organization objectives. The ISO 55001 Asset Management system and its processes translate the organization’s objectives into asset-related decisions, plans and activities, using risk-based thinking.

What is the ISO 55001 Asset Management system? 

The ISO 55001 Asset management system is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-effective manner. It is a coordinated activity of an organization to realize value from assets. Realization of value normally involves balancing of costs, risks, opportunities and performance benefits.

The ISO 55001 Asset management system is based on globally recognized ISO 55001:2014 standard developed by the International Organization for Standardization (ISO). An asset management system based on a ISO 55001 standard utilizes a structured, effective and efficient process that drives continual improvement and ongoing value creation by managing asset-related cost, risk and performance. It applies to all types of assets whether they are tangible, intangible, fixed, current operational or non-operational assets. 

Why use the ISO 55001 Asset Management system?

The ISO 55001 Asset Management system enables an organization to examine the need for, and performance of, assets at different levels. Assets can be an organizations largest investment; they are often critical to the organization being able to deliver its products and services and meet its objectives. ISO 55001 Asset management is important for organization as a business strategy that, properly implemented, will improve financial performance. An ISO 55001 asset management system improves control of day-to-day activities and increases business efficiencies. It is vital for reduction of risk-related costs, compliance in regulatory activities and minimizing failure rates.

Implementation of the ISO 55001 asset management system can bring significant increase in profitability along with an amazing fall in unit cost. It helps organizations enhance their brand reputation and supports improvement and business growth. It is also useful for managing risk of asset ownership and asset ownership cost minimization.

One additional advantage of the ISO 55001 Asset management system is that it can be easily integrated with other commonly implemented management systems in organizations across the world. The ISO 55001: 2014 standard uses ISO’s High-Level Structure (HLS) as its foundation. It is designed to be compatible and harmonized with other prominent management system standards, such as ISO 14001:2015 for environment management systems and ISO 9001: 2015 for quality management systems. It is therefore ideal for integrating into existing management systems and processes.

In one line, the ISO 55001 Asset Management system is for saving time, money and lots of executive efforts involved in tracking, development, upgradation and overall management of your assets. It will help you continually improve the suitability, adequacy and effectiveness of your asset management and the asset management system. Certification to ISO 55001 will provide you with an independent endorsement of your commitment to asset management that meets international standards. Clients, partners and other stakeholders will have confidence that the systems to manage your organization’s assets are appropriate, effective and have been audited regularly. An ISO 55001 Certification may also help your organization access new markets, grow client base and improve your entire systems.

We hope this article was helpful. For more information from Punyam Academy, please visit their CPD Member Directory page. Alternatively please visit the CPD Industry Hubs for more CPD articles, courses and events relevant to your Continuing Professional Development requirements.

Punyam Academy

Punyam Academy

For more information from Punyam Academy, please visit their CPD Member Directory page. Alternatively please visit the CPD Industry Hubs for more CPD articles, courses and events relevant to your Continuing Professional Development requirements.

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