Enhancing the lifecycle of physical assets, from acquisition and operation to maintenance and disposal, is essential for achieving these goals. Asset management plays a major role in this process. A well-organised asset management strategy guarantees operational excellence and long-term value, regardless of whether it is employed to manage infrastructure, real estate, or smart building solutions. A deep understanding of the definition of asset management, key strategies and long term value is important for asset managers and facility managers.
What is the definition of an asset? There are 2 definition, based on international standard and industry specific.
International Standard Definition (ISO 55000:2014 – Asset Management)
“An item, thing or entity that has potential or actual value to an organization.”
This definition applies broadly across industries, including physical, financial, and intangible assets. Value can be monetary, operational, social, or environmental, and assets can be tangible (e.g., machinery, buildings) or intangible (e.g., software, patents).
Reference: International Organization for Standardization (ISO). (2014). ISO 55000:2014 – Asset Management – Overview, Principles, and Terminology.
Industry-Specific Definition (Built Environment – RICS)
In the built environment and facilities management sector, the Royal Institution of Chartered Surveyors (RICS) defines an asset as: “A physical resource such as land, buildings, infrastructure, and facilities that provide economic, social, or environmental benefits over their lifecycle.”
This definition emphasises long-term value creation in the real estate, construction, and infrastructure sectors. It includes not just ownership but also lifecycle management—ensuring sustainability, efficiency, and operational performance.
Reference: Royal Institution of Chartered Surveyors (RICS). (2021). International Property Measurement Standards and Asset Management Guidelines.
Understanding Asset Management in the Built Environment
Asset management refers to a systematic approach to the administration and maintenance of physical assets in order to optimise their value, performance, and lifespan. This includes a wide range of structures, such as industrial facilities, transportation networks, and energy infrastructure, within the built environment. Businesses can enhance sustainability, reduce operational costs, and improve efficiency by implementing best practices in infrastructure management and facility management.
Key Components of Asset Management
Asset management is all about maximising the value and lifespan of physical assets such as buildings, equipment, and infrastructure while minimising costs and risks. Whether for businesses, governments, or property owners, effective asset management ensures that resources are used efficiently, reducing unnecessary expenses and improving overall performance.
Here’s a breakdown of the key components of asset management and why they matter.
Facility Management for Operational Efficiency
Facility management focuses on maintaining and optimizing buildings, offices, warehouses, and other properties to ensure they function efficiently. This includes regular maintenance to prevent breakdowns and costly repairs, energy efficiency improvements such as using smart lighting and HVAC systems to lower utility bills, and compliance with safety and building regulations to avoid legal issues and create a safe environment for occupants. For example, a company using smart sensors to automatically adjust air conditioning based on occupancy levels can reduce energy waste and cut costs.
Predictive Maintenance for Cost Savings
Many businesses still rely on scheduled maintenance, checking and repairing equipment at fixed intervals. However, this approach can lead to unnecessary work or unexpected failures if a problem arises between scheduled checks. Predictive maintenance takes a smarter approach by using sensors and IoT technology to monitor equipment performance in real time, AI and data analysis to detect early signs of wear and predict potential failures, and automated alerts that allow maintenance teams to fix small issues before they become major problems. For example, a factory using predictive maintenance can avoid unexpected machine failures, keeping production running smoothly and reducing repair costs.
Smart Building Solutions for Sustainability
Smart buildings use technology to monitor and control energy use, security, and environmental conditions. By integrating IoT sensors to track temperature, air quality, and lighting, automation systems that adjust energy usage based on real-time needs, and AI-driven analytics to optimise operations and improve efficiency, these innovations help lower energy bills while creating a more comfortable and sustainable environment for occupants. For example, a hotel that automates its lighting and air conditioning systems can significantly reduce electricity usage while ensuring guests have a pleasant stay.
Infrastructure Management for Long-Term Resilience
Infrastructure assets such as roads, bridges, power grids, and water systems require careful planning and maintenance to remain reliable over time. Effective infrastructure management includes digital asset tracking to monitor the condition and performance of large-scale assets, lifecycle planning to schedule repairs and replacements before critical failures occur, and cost-efficient upgrades that improve resilience against wear and tear, climate changes, and increasing demand.
By integrating these key components, organisations can make smarter decisions about their assets, improve efficiency, reduce costs, and enhance sustainability. Whether it is a business managing office space or a government overseeing public infrastructure, asset management plays a crucial role in long-term success.
Conclusion
Asset management is an essential strategy for businesses aiming to optimise resources, minimise expenses, and enhance operational efficiency. By integrating predictive maintenance, smart building solutions, and infrastructure management, organisations can create a sustainable and future-ready built environment. A deep understanding of asset management definition, can help asset managers develop key strategies and build long term value for their organisation.
Further read on comparison between asset management and facilities management, read here in this article.
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