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Asset Management for Your Construction Firm: 5 Tips for Success

ByRyan Ayers,
business.com writer
|
Oct 01, 2018
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> Finance
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Here's how to make sure the process actually works for your business.

Contemporary construction managers must accurately monitor site resources to mitigate loss and theft. The ability to monitor assets effectively is vital for any construction project. Asset management is also an invaluable process for equipment maintenance and for compliance with insurance and legal requirements.

Proper asset management can help you as a manager control costs and reduce site waste. As a result, it's vitally important to use effective inventory management tools to monitor heavy equipment, as well as smaller tools that are easily misplaced or misappropriated.

Today, big data technology is helping construction managers to improve operational efficiency through ultraefficient monitoring of construction equipment and other assets. As a result, forward-thinking leaders in the field are increasingly recognizing the benefits of leveraging big data to monitor construction assets.

Here are five tips for better construction asset management.

1. Get your executives and senior management on the same page.

In the construction field, communication is particularly critical. A cross-functional organizational framework is one of the easiest ways to ensure effective communication. The structure is counterintuitive to traditional hierarchies but can help to solidify team collaboration.

Foremost, company heads need useful and meaningful information for making decisions. When dealing with employees, clients and third-party vendors, clear and accurate communication is especially vital. For instance, it's important for mission-critical tasks such as budget preparation, reporting, accounts payable and receivables, and income forecasting.

2. Define the software, equipment, and personnel assets that you have and need.

It's important to hire trained and qualified financial staff members in order to succeed, and it's equally important to choose the right inventory and software resources to successfully execute builds. As a result, effective construction managers identify the company's goals and needs before hiring personnel or selecting enterprise software.

Unnecessary equipment losses can mean exorbitant expenses, and choosing the wrong software leads to unnecessary and costly problems. Choose software resources carefully so that it meets all your company's needs and works well with the company's current data framework. In other words, the chosen software needs to conform with your current legacy systems.

3. Use big data technology for optimal inventory management.

Tools such as handheld scanners and RFID tags can help you identify and correct inaccuracies quickly. Information, after all, is vital for any successful asset management program. Before choosing software or equipment, you must develop and implement equipment monitoring and evaluation procedures. Once you've implemented a new asset management system, it's necessary to continually evaluate and monitor the chosen software system to ensure that it's working properly and conforming with established management procedures. This includes developing mechanisms for identifying and correcting data inaccuracies.

4. Review your assets every quarter.

Periodic reviews are essential to the successful operation of any enterprise. It's a good rule of thumb to conduct these analyses quarterly. It's during these reviews that you'll find and fix problems as well as discover opportunities for improvement.

One key concern for construction managers is knowing how long assets will last. After identifying manufacturers' suggested equipment lifespans, you should compare how the goods perform onsite. This requires programming asset management systems to capture the appropriate information throughout various product lifecycle stages.

5. Hire a financial or accounting professional to manage specifics.

By hiring qualified financial professionals, you'll create long-term value that far outweighs the potential dangers of mismanaging assets. Financial analysts have a passion for numbers and can help you monitor and manage equipment in an organized and methodical manner. Many of these professionals have a bachelor's degree and skills in financial services, valuation, financial modeling and other critical talents. They analyze data for trends to help managers make informed decisions, help executives monitor and balance project budgets, and make recommendations regarding future spending. Because of the critical role that financial analysts play in construction, it's important to make sure that they have enough experience in the field.

Asset management is essential for any company. However, monitoring and tracking equipment allocation is more complex than it appears at first glance. Still, it's important to know the best way to manage assets – both small and large – to keep enterprises and projects running smoothly.

While asset management does reduce costs, cash flow reconciliation, maintenance, liability and logistics are other important reasons to consider advanced equipment monitoring solutions. For example, in-depth product analyses can help you decide whether to rent or purchase necessary equipment. With careful consideration, savvy construction managers can leverage the latest technologies to execute successful projects and ensure their long-term enterprise sustainability.

Ryan Ayers
Ryan Ayers
See Ryan Ayers's Profile
Ryan Ayers has consulted a number of Fortune 500 companies within multiple industries including information technology and big data. After earning his MBA in 2010, Ayers also began working with start-up companies and aspiring entrepreneurs with a keen focus on sustainable scaling, professional development and business growth.
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