Asset management definition and strategies for success

Let’s explore the asset management definition and the strategies for a successful asset management in this article.

Enhancing the lifecycle of physical assets from acquisition and operation to maintenance and disposal is essential for ensuring efficiency and sustainability. This is where asset management plays a crucial role.

Whether managing infrastructure, real estate, or smart buildings, a well-organised strategy ensures operational excellence and long-term value. Understanding the asset management definition and strategies is key for asset and facility managers to drive performance and maximise returns.

What is an asset?

An asset is anything that holds current or future value to an organisation. According to the ISO 55000 standard, an asset is “an item, thing or entity that has potential or actual value to an organisation” (ISO, 2014). Assets can be physical, like buildings and equipment, or intangible, like software and patents. In facilities and infrastructure management, assets typically refer to physical resources that provide economic, social, or environmental value over time (RICS, 2021). Understanding what qualifies as an asset is the first step in managing them effectively.

Asset definitions

Understanding what qualifies as an asset is the foundation of effective asset management. Here are two widely accepted definitio

International Standard Definition (ISO 55000:2014 – Asset Management)

“An asset is an item, thing or entity that has potential or actual value to an organisation.”

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 Organisation for Standardisation (ISO – 2014). ISO 55000:2014 – Asset Management – Overview, Principles, and Terminology.

Royal Institution of Chartered Surveyors (RICS)

“An asset is a 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.

Definition of 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.

International Standard Definition (ISO 55000:2014 – Asset Management)

Asset management is a structured process for maximizing the value, performance, and lifespan of assets while minimising costs and risks. ISO 55000 defines asset management as the “coordinated activity of an organisation to realise value from assets”. This involves planning, acquisition, operation, maintenance, and disposal of assets in a way that supports the organisation’s objectives.

Royal Institution of Chartered Surveyors (RICS)

RICS define asset management for the built environment as informed decisions to keep buildings, infrastructure, and systems running efficiently, sustainably, and safely

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 to improve operational efficiency

Facility management ensures assets function as intended every day. This involves:

• Planned maintenance to avoid breakdowns
• Energy efficiency upgrades to reduce costs
• Safety and compliance to meet regulations

Example: A room using motion-sensor lighting cuts power usage during idle hours.

Predictive maintenance for cost savings

Traditional maintenance can be wasteful or risky. Predictive maintenance offers:

• Real-time equipment monitoring using IoT sensors
• Data-driven insights to anticipate failures
• Timely alerts that allow preemptive action

Example: A manufacturing plants avoid costly shutdowns by repairing machines before breakdowns.

Smart Building Solutions for Sustainability

Smart buildings use technology to monitor, automate, and optimise building systems:

• IoT-enabled sensors for air quality, lighting, and temperature
• Automation systems to control energy usage
• AI-driven analytics to increase operational efficiency

Example: A hotel uses automation to lower energy bills without sacrificing guest comfort.

Infrastructure Management for Long-Term Resilience

Large-scale infrastructure demands proactive oversight:

• Digital asset registers to track performance and usage
• Lifecycle cost analysis to plan timely repairs
• Upgrades to enhance resilience against wear, weather, and demand

Example: A city extends bridge life by scheduling upgrades before deterioration sets in.

Long term value for asset management

Organisations that invest in asset management enjoy benefits such as:

• Reduced maintenance costs
• Higher operational uptime
• Better decision-making using accurate data
• Long-term asset value preservation

Whether you manage office buildings or city infrastructure, the right asset management strategy drives measurable results. Hence it is important to manage assets since the acquisitions stage. Asset managers in the built environment should create awareness on definition and key strategies for asset management among their organisations.

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.