View From The North: Asset Management – There’s More to the Story
Managing tangible assets is an important requirement for organizations but what about the intangible assets that are equally, if not more, important? We need to think of our geographic information systems as the best way to gain insights and understanding into the tangible and intangible.
I have a confession to make. When the good folks in our marketing department approached me with the theme for this issue of ArcNorth News – “Asset Management” – my initial reaction was, well… yawn…
Over the past few years, the term “asset management” has become synonymous with inventories of fire hydrants, park benches, utility poles and so on. Organizations use GIS techniques and technologies to manage these “hard” or “tangible” assets – that is, physical things located somewhere in my city, town, territory or wherever.
Applying GIS to hard asset management lets organizations go well beyond simple inventories and financial records. There are all kinds of resources available that talk about the types of analysis organizations can do with GIS to better understand asset lifecycle and asset performance. Moreover, geography itself (an asset’s location) can be used to better understand how one asset relates to and interacts with another asset.
Hence my “meh” reaction. Isn’t that old news?
When I started reflecting on what exactly an “asset” is, two things occurred to me. Firstly, GIS practices do enable the management of “tangible assets”, but what about “intangible assets”? Secondly, in the same way that asset inventories benefit from the analysis and The Science of Where from GIS, can GIS learn a thing or two from the rigour I often see in pure asset inventory systems?
Let’s tackle the first idea.
It’s possible to think of many of the other things we manage and analyze in a GIS, as intangible assets. An intangible asset is no different from a tangible asset except for the fact that it’s not a countable physical entity. Intangible assets can be the demographic characteristics of a census area or municipal ward or the value and usefulness of a property.
Most GIS professionals, including myself, tend to see “value” as an attribute of a feature. For example, “this Census tract has an average income of $XX”, or “this property has an assessed value of $YY”. What if we thought about these “attributes” as an “asset”? Because we see these as attributes and not as assets, GIS professionals tend to focus more on the geometry. We get hung up on location accuracy and datum shifts. We see the parcel boundary as an asset – after all, it’s the closest thing to the physical entity we may have.
Are we missing the boat? If we talk to the owner of the parcel, or the elected officials – I’m guessing they’ll be far more interested in getting the assessed value right. For them, the “asset” they want to understand is the parcel’s assessed value. They may also care more about who is funding public vs. separate education. How many school-age kids are there? These are the “intangible assets” a government is interested in. Many times, the intangible assets lay the foundation for the tangible in a society. If a community values education (intangible), it will invest in schools, libraries and learning centres (tangible).
By thinking of both tangible and intangible assets as fundamental to any organization’s functioning, we elevate the importance of data in a GIS and tie it to business-critical workflows in an organization. With valuable, managed intangible assets at the forefront of our GIS, it’s now much easier to power analysis and visualization that drive business value.
Case in point: have you ever wondered why seemingly non-GIS (or at least low-GIS) tools like Operations Dashboard and Survey123 for ArcGIS are so popular? I mean, for the most part, the map is secondary in these apps... a heresy!
Well, they’re popular because they showcase the intangible assets front and centre. The map and GIS are still important. GIS is important because by visualizing data as maps, it drives the understanding of these assets for the organization. It drives insight.
This leads me to the second thing we can learn here. Going back to tangible assets for a moment –organizations that manage hydrants or utility poles do so precisely because those assets are critical to the functioning of the organization. If we use GIS to drill down into the intangible assets of our organization, we are connecting GIS to what matters in the organization.
Too often, I see organizations take a financial approach to asset management. There is a belief that because a hard asset costs money, it’s the money that is important. So, that becomes the anchor of the asset management system. While money is important, a purely financial approach to asset management misses out on the value of intangible assets, and the value of location. Conversely, a purely map-centric inventory of assets also misses the boat, because it, too, only looks at one aspect –“This fire hydrant is here” – right down to the centimetre.
We need to blend these approaches and think of our geographic information systems as the best way to gain insights and understanding into the tangible and intangible. I’m not suggesting spatial accuracy and integrity aren’t important. They are. But these are not the end game. An accurate location is one facet of both the tangible and intangible assets in your organization. GIS has the power to bring these together.
Asset management is not merely an inventory of your stuff. It’s managing your assets as well as understanding them. Knowing their value not just from a monetary perspective, but also their value to the organization. It’s not about “what does it cost?”, it’s about “what’s it worth?”.
This article originally appeared in the Spring 2018 issue of ArcNorth News.