Asset Governance (International) presents

Asset Context Discovery©

A New Asset Management Paradigm

General Description

In a world where everyday presents a new challenge, the only things that a company can work with are those that will help it survive and grow. 

Asset Governance (International) (“AGINT”) provides a process of governance over assets that will return better intelligence to the company so that important commercial and organisational decisions are made on the basis of fact rather than assumption.

Value Statement

AGINT provides corporate and commercial efficiency and effectiveness through Asset Context Discovery © (ACD).

Overview

The value of any organisation is difficult to define at the best of times; it assumes that perfect information is available.  Unfortunately, most organisations exist outside ‘perfection’, which means that the value of the company is most probably inaccurate.

Additionally, administrative and operational efficiency and effectiveness is driven by the resources employed in support of a particular function.  If more resources are used than are really needed then the company suffers operationally and financially.

AGINT aims to provide services that will assist with the identification of inefficiencies and ineffective components, and can provide support in correcting those problem areas.  It can do this through the process of asset management using Asset Context Discovery © (ACD).  ACD extends beyond the immediate situation of any particular asset and focuses on the interfaces.

Context: There may be a corporate vehicle in the general pool: This vehicle is clearly an asset, but so is any associated maintenance agreement that exists for that vehicle (there is inherent value in any associated direct relationship).  ACD includes the maintenance agreement but also extends beyond that to include the financial processes and, by extension, the people managing those processes, for overseeing the maintenance relationship.  Hence, the corporate vehicle represents a chain of assets through direct reference and interface.

AGINT, using ACD, provides audit, management and advice of all assets and asset chains.  By doing so, you will know the true value of an asset instance (that is, an individual asset whether it be organisational, legal, human or information).

Value of asset management

The value of asset management goes beyond the value of the asset itself.

Context: Your mobile sales force may communicate directly with your Head Office over wireless access services in order to sign new clients.  If, however, the point of entry to your network is a single point of failure, then you risk new business if it fails.  Hence, the network access point is actually of greater value to you than the original cost of procurement or its existing book value.  However, in terms of the value of your company, the book value of the asset is actually what should be considered: This leads most organisations to an asset consideration dilemma.  Rationalising the book value of an asset against its service value is one of the hardest undertakings that an organisation can perform.

The same could be said for staff (whether they be permanent, temporary or even contractors).  The book value of a particular role may be considered the salary plus administrative costs, but the service value actually extends to what value the role provides to the organisation.

Context: A position has a book value of $100,000 per annum but it may be responsible for the protection of millions of dollars in revenue.  Hence in order to make organisational restructuring decisions management must be made aware of the service value of a position then consider that in line with the cost of keeping that position in the organisation.

Asset management, in its traditional form (tagging and tracking), is a very valuable tool for a company to understand its true value and where that value lies.  Asset management, in terms of Asset Context Discovery ©, delivers the traditional returns (identification, location and evaluation of the physical item) in addition to determination of the service value associated with the asset by understanding direct relationships and interfaces.

AGINT concept

The Asset Context Discovery © (ACD) concept considers the asset from two distinctly different but equally relevant perspectives; the asset instance (that is, the asset as an independent item), and the asset in terms of the organisational context.

The asset instance provides important information to the company in terms of the original and current values, location and management responsibility.  This has implications not only for calculation of company value but also taxation and equipment/item refresh/replacement/maintenance.  It provides the organisation with information on where possible spare capacity is located and which management structure is responsible for reallocation of the resources.

Traditionally, asset management has included a complete field audit of the organisation, tagging of the assets for future identification and tracking the assets through a number of mechanisms such as regular management audit and reporting, electronic discovery methods, and change management processes.  This, at best, can guarantee a modicum of success; all activities described here are dependent upon human process which means that each is prone to error or oversight.  The problem found most often is that an error made at a particular point in time is not discovered until quite some time afterwards, usually resulting in confusion or inappropriate outcomes.

Context: If a device type has a quantity of 57 but the volume number was transposed to 75 within an asset management system then values may be accorded to the asset type skewing the value of the company: when an audit is conducted thereafter only 57 devices will be found leading to a possible assumption that organisational security is less than optimum [that is, the rationalisation of a recorded 75 devices to an audited 57 will indicate that the 18 devices ‘unaccounted for’ have simply disappeared – possibly stolen – whereas in reality they never existed].  This leads to a situation of where the issue has been refocussed from the asset itself to data integrity and asset control.

The added complexity is that asset management within an organisation usually does not extend beyond the major element (the composite unit as procured) yet the functionality of the element is actually in the sub-elements, and these can change on a regular basis in order to vary capability.

Context: Consider the humble motor car: If a corporate vehicle is purchased from the showroom floor but is subsequently modified using in-house resources (the purchaser may be an electronics retailer, and the modification may include onboard GPRS and an ungraded stereo system) then the value of the vehicle is not the purchase price but the purchase price plus market value for the modifications.  If, at some later time the GPRS functionality is removed (within the timeframe allowed for asset write-down) then the GPRS unit may not be considered as an asset as it would probably not be recorded as an asset instance on installation into the car therefore would have no residual asset or corporate value on removal.  The requirement is to ensure that all assets are recorded to the sub-element level.

Asset Context Discovery © (ACD) is a concept developed by AGINT to holistically account for an asset.

An asset instance usually does not exist in isolation (in fact, it is very rare when it does).  ACD aims to implement traditional asset management and then identify all of the direct interfaces associated with that instance (and can be expanded to include indirect interfaces, thereby giving an end-to-end picture of the asset chain, allowing single points of failure to be identified and risks mitigated).

If an asset is seen from an organisational perspective, the value will be totally different to that accorded within the organisation’s ledgers.  This organisational value must be seen from a number of aspects, not the least of which is the service that it provides and the organisational interfaces that it has.

Context: An example of this may be the security lock provided for access into a site.  The lock interfaces with the building’s information technology system as well as all employees that pass through the security portal.  If the lock fails then either the security of the facility needs to be compromised to allow unhindered access into the site or employees will be prevented from accessing the building thereby probably unable to continue work.  Once the organisational value of the asset instance or asset chain is determined the organisation can then proceed to develop risk mitigation strategies: In this case a strategy may be to have guards available to be stationed at the access point so that passes can be manually checked.  However, if the passes are such that the system records an in/out status then each employee that manually access a site will need to be recorded as “in” so that an “out” status can be recorded when he or she leaves the security zone. The human asset cannot be overlooked, either.  A person is recruited to fill a position on the basis of perceived skillset to match a corporate requirement.  This, in itself, implies that the skillset in question has an organisational value.  However, should the individual expand his or her skillset (either through training or education) then the inherent value of the person increases albeit that the base cost of the person probably does not.

ACD takes a view of the asset from several different points and then puts in place a whole-of-organisation consideration of the asset.  However, the ACD concept is flexible enough to be able to be broken into separate compartments so that an organisation can choose which compartment it needs assistance with, and implement that particular compartment only.

The values of Asset Context Discovery © include:

Asset audit
Asset tagging
Asset management accountability
Asset tracking
Asset valuation (book and organisational)
Asset chain identification
Risk identification
Asset context positioning
Support Contract assessment and negotiation

Assets consideration

AGINT considers any item that has residual value to an organisation to be an asset.  In this case, residual value means a value that survives after initial use.  To this end, the assets considered by AGINT in terms of Asset Context Discovery © include:

Organisational

ICT

An ICT asset includes any component in either the organisation’s IT systems or its telecommunications network up to the end devices (such as a personal computer, desk telephone or mobile telephone).  Whilst cabling is also considered an asset, it normally escapes scrutiny unless it is proprietary or of a higher value.  Whilst not all are readily accessible, many are and must be considered as ‘valuable, attractive’ items (such as handsets, laptops and mobile or cell phones).

Furniture

 

Furniture is one of the most visible of assets but frequently gets overlooked as many see furniture as an overhead.  This could not be further from the truth; in an extreme situation items of furniture can be liquidated in order to provide cash-flow resources.

Video

Similar to furniture, the video asset needs to be accounted for and managed.  However, unlike furniture but akin to some ICT products, the video asset has personal value and is generally portable, meaning that security around these instances needs to be increased.  ACD can achieve this.

Legal

As a direct result of developing the ACD concept, AGINT recognises legal vehicles as assets (initial value, with surviving value after initial use).  However the owning organisation normally handles this type of asset differently to the organisational asset, particularly in reference to valuation.

Maintenance and Service Contracts

A contract has an attendant value (that is, the cost of procurement).  It also has organisational value depending upon the situation of the organisation.

Maintenance and Service Contracts are normally handled via ‘cost of sales’ mechanisms and are then handed to account or operations management to facilitate.  However, the underlying requirement normally changes during the life of the contract, necessitating analysis to ensure that the contract is still valid or that it has sufficient scope.  Frequently this analysis is not undertaken.  The ACD concept treats all maintenance and service contracts as valuable and value-adding assets via direct interface with other asset instances.  To this end, the necessary analysis is performed.

Lease Contracts

Lease contracts are the most misunderstood of all legal vehicles.  This type of contract provides for a capital inclusion for the organisation but generally is managed under operational facilities (particularly for handling the costs associated with the lease).  Whilst the capital is owned by a provider, the service that the lease provides to the organisation is of organisational value.  However, organisations often misconstrue the extent of the lease and place themselves at risk as a result.

The ACD concept considers the lease contract the same as any other asset within the organisation, and holistically reviews its values (book and operational) and inherent risks.  It also looks at all interfaces to ensure that maximum output for the organisation is gained from the contract.

Patents

Without a doubt, the patent is the most valuable item that an organisation possesses, as its useful life extends for that allowed by legislation rather than what is usually experienced with organisational asset instances.  Unfortunately, many organisations fail to secure the patent and allow its use in an indiscriminate manner.

The ACD concept deals with the patent quite separately to other assets by reviewing this asset from a security perspective.  Interfaces are considered and annotated, with full asset management being developed (including asset responsibility).

Intellectual property

Where a patent is properly described and certified by regulatory authorities, intellectual property (IP) is not.  Additionally, IP is usually resident within the traditional non-asset components of the organisation (workforce, processes, and so forth) and is very difficult to quantify or qualify.  Whilst not of the same longevity as a patent, IP is no less important (but is less secure).

The ACD concept deals with intellectual property in a similar manner to patents; there is a discovery phase followed by interface review.  A recommended risk and asset management plan is then developed for the organisation.

Human

Permanent, temporary and casual staff, and contractors

The value of people to the organisation is not the person him/herself, but in what the person knows and the skillset that he/she has.  In theory, therefore, when the knowledge changes or the skillset improves, there is a potential increase (or possibly decrease) in value.

Another problem comes when the role that is being filled is valued on the basis of required skillset rather than the organisational value that is derived.

The ACD concept will define all interfaces for the roles under review, then provide an asset valuation on the basis of interfaces and organisational value.  This will allow risk profiles to be developed for each position and the subsequent formulation of risk mitigation strategies.

Information

Disaster recovery

There is no doubt that one of the primary assets of an organisation is the information that it uses and develops in the course of its business.  Whilst this asset cannot be quantified it can be protected.

The ACD concept considers the system used by an organisation in using its information and how such information is accessed.  It then develops the risk mitigation strategies surrounding the information.  To this end, the term “disaster recovery” does not simply pertain to the IT systems within the organisation but is applied across the entire range of information (including hardcopy files and stand-alone systems).