How to Conduct
an Asset
Lifecycle Study
By Marla Williams, CPPM
President, Integrated
Asset Management, Inc.
President, Federal Center
Chapter
1
Typical Mission/Charter
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Improve Accuracy of Asset Records
Streamline Processes
Leverage Technology
Reduce Costs
Promote Reutilitization of Assets
Improve the overall way the organization
manages assets throughout their
lifecycle.
2
Plan
Dispose/
Donate
Procure
Redeploy
Receive
Use
3
Approach
• Analyze Current State
• Evaluate Gap
– Regulatory and Accounting Requirements
– Best Practices
– Voluntary Consensus Standards
• Determine Future State
• Prepare Implementation Road Map
4
Identify Steering Committee
• Varying Levels Within Organization
• Varying Phases in Asset Lifecycle
• Typically includes:
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Controller
Capital Asset Accounting
Purchasing
Information Technology
Facilities Management
Warehouse/Receiving
Fleet
Property Management
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Request Preliminary Data
• Current Asset Record Data
• Last Two Physical Inventories and
Reconciliation Detail
• Internal/External Audit Reports
• Written Policies/Procedures
• Sample Forms
6
Document Current State
Composition of Capital Asset Values
BUILDINGS
BUILDING ADDITIONS
LAND
VEHICLES
EQUIPMENT
LAND IMPROVEMENTS
CONTRIBUTED CAPITAL
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Document Current State
Moveable Equipment
Vehicles
$10,976,478
*360 Vehicles
Equipment
$10,586,561
940 Items
8
Document Current State
896
669
721 358
PC-DESKTOP
1255
MONITOR
1412
7646
MISC*
PC-LAPTOP
PRINTER
PROJECTOR
DVD PLAYER
4685
TELEVISION
AMPLIFIER
7455
9
Identify Subject Matter Experts
(SME)
• Steering Committee Identifies SME’s
(top to mid-level) in various
departments
• Include both small and large
department property custodians –
best property managers and the
worst.
10
Kick-Off Meeting
• Top Level Organizational Representative
should explain mission, its importance
and ask for cooperation
• Consultant reviews approach and data
requirements
• SME’s sign up for back-to-back 2 hour
interview slots
• Consultant visits each SME at their office
11
SME Meetings
• Consultant meets with each SME or
group of SME’s in their work area
• Assume nothing, ask open ended
questions, document step-by-step
processes verbally
• Then ask for written policies/procedures,
if any, sample forms – blank and
completed -- expectation is to leave with
this information.
12
SME Meetings
• Make follow-up appointments with
operational personnel for system and
process demonstrations.
• Document each meeting:
– Additional action required
– Distribute to all attendees
– Solicit feedback but make no conclusions
or recommendations.
13
Operational Personnel Meetings
• Obtain sample completed forms, on the spot
• Step-by-step demonstrations of each system
• Watching how a custodian tags and
“receives” a new asset into the system or
seeing a demonstration of data collection and
entry into the system can be most
illuminating
• Open-ended question – what is the most
difficult thing you do, what would you change
if you could. . .
14
Document Current State
• Organization Structure
– Roles and Responsibilities (official and unofficial)
• Systems
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Procurement
Purchasing
Fixed Asset Accounting
Work Orders
Help Desk
Auto Discovery
CAFM
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Document Current State
• Definitions
– Capital Assets
– Controlled Assets (Accountable or Sensitive
Property)
• Procurement
– Purchase Requisitions
– Issuing Purchase Orders (e.g. object/class codes,
work flow approval)
– Purchase or Credit Cards
– Restricted Purchases
• Grant Purchases
• Federally Funded Purchases
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Document Current State
• Receiving
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“Receiving” into Purchasing System to approve payment
“Receiving” Assets -- tagging, describing and recording receipt
Issuing Payment for Assets
Identifying Capital Assets for General Ledger
Recording Capital/Controlled Assets in Property Management
System, if any.
• Information Technology Equipment
– Help Desk
– Auto Discovery Tools
– Software and Configuration Management
• Facilities Management
– Work Orders
– Moves and Relocations
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Document Current State
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Capital Leases (e.g. vehicles, copiers)
Software License Management
Maintenance of Non-IT Equipment
Unique Fleet Requirements
Unique Agency Systems or Processes
Inter-Departmental Transfers
Physical Inventory and Reconciliation
Identification of excess or surplus property
available for re-use
– Updating status in Fixed Asset Accounting System
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Capital Asset Definition
• Outside Factors
– GAAP – nothing specific
– GFOA – minimum life is accounting
period
– GASB34 – one year minimum life
– OMB A-87 - $5,000 for federally funded
assets
– Audit Findings
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Capital Asset Definition
• Conflicting Internal Definitions
– Board Policy
– Financial Statements
– IT Department
– Logistics
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Controlled Asset Definition
• Software (license tracking, transfers between
departments, recovery of license information
from refreshed equipment, justifying new
purchases)
• State and Federal EPA regulations require
recycling or testing at end of life
• GSA FMR B-34 Disposal of Federal Electronics
• Look at ASTM E2608 Standard Practice for an
Equipment Control Matrix (ECM) – need to
discuss
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Equipment Control Class
ECC-1
ECC-2
ECC-3
ECC-4
ECC-5
Equipment Control Level
Continuous
Continuous While
Mobile
Event Tracking
Containment
No Tracking
Highest Standard of
Sensitivity
Moderate Standard of
Sensitivity
Minimal Standard of Sensitivity
Controllable Standard
Non-Accountable
1
Consequences of loss of
control is a societal
safety/security impact,
which is characterized
by negative societal
safety or security
impact and would
extensively damage the
reputation of the
organization.
2
Consequences of loss of
control is a personal
safety/security impact,
which is characterized by
negative personal safety
or security impact that
does not rise to the level
of a societal safety or
security impact.
3
Consequences of loss of control is a
operational safety/security impact,
which is characterized by negative
operational or security impact that
does not rise to the level of a
personal or societal safety or
security impact.
4
Consequences of loss of
control is a compliance
safety/security impact,
which is characterized by
negative compliance with
applicable laws, regulations
or other relevant internal or
external guidance that does
not rise to the level of an
operational impact.
5
Consequences of loss
of control is not
discernible, which is
characterized by
having no visible or
recognizable impact on
the organization.
Firearms (duty or
training)
Munitions or Explosives
Destructive Devices
Vehicles
Software
Secure Communications, Desktop/Laptop
Secure Radios
Equipment with Retainable Memory
Stun Guns, Tasers
not encrypted:
Personal Computing Devices (i.e.,
PDA, Blackberry, etc)
Cameras
Portable, Easily Convertible to
Private-use and/or High Potential
for Theft: Tools, Satellite Phones
Televisions, VCR/DVD, Projectors,
Small Office Machines
ASTM Description
Examples
Minimum: End of Life
Control for monitors,
copiers, fax, scanner, printer
and other peripherals
where improper disposal
could result in hazardous
materials being released
into the environment
or consider classifying as
ECC-3.
22
Business Process Modeling
• graphical representation for
specifying business processes in
a business process model
• Cross Functional Flowcharting
23
No requirement to check Surplus before ordering new
Review Quote,
RFP if necessary,
Selects Source
Numbers
Purchase Orders
Send to Vendor
Vendor
Business
Division
Requestor
selects proper
object code
Treasury
Enter Purchase
Request
Ships Assets
Accounts
Payable
Responsible
Scan Invoice into
Document Capture
Logistics
Department
Requestor or
Designated Purchaser
Current Procurement and Receiving Process
Physically Receives
Assets
Tags Asset and
Completes
Inventory Control
Form
Capital Assets
Not Systematically
Recognized on Financial
Statements
Approval
Workflow
Budget Check
Mail Invoice
Enter Invoice into
Sungard A/P
Send Form to
Treasury
Treasury files
Inventory Control
Form
Pays Vendor
Send Copies of Form
to Business Division
Title I
Days
or
Weeks
Deliver Assets to
Requestor
Business Division or
Requestor Receives
into Sungard to
authorize payment
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System Interface Diagram
• Document all Related Systems
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Procurement
Purchasing
Fixed Asset Accounting
Facilities Work Orders
IT Help Desk
IT Auto Discovery
CAFM
• Existing Interfaces
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Computer
Altiris queries AD for
user and computer info.
Collects Hardware and
Software Information from
computers and users on
network
Computer
Current
Altiris Client Mgmt
Suite
Active Directory
Centralized Data on
Network Access, Logins,
Passwords, End Users and
Departments
Computer
Altiris Service Desk
Logs and Tracks Calls,
Generates and Updates
Tickets to add/change
hardware/software
Teamworks
Solution
Sungard
Facilities Work Order
Purchasing/AP
Procurement thru Accts
Payable
TPS Fueling Log
Collects User, Dept, Location
Fueled and Date
FleetPro
Fleet Mgmnt, parts
inventory, procure
supplies, and charge
back labor costs
End User
Fixed Asset Module
Receiving to Disposition
Fuelman
Collects User, Dept,
Location Fueled and
Date
Treasury
Spreadsheet
Risk
Management
Spreadsheet
Manual Excel
spreadsheet for
Financial Statements
Title I
Inventory Control
Forms
Manual Excel
spreadsheet
Manual Excel
spreadsheet for
Vehicles
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Delivery
Future State
• Review Legal/Regulatory
Requirements
• Compare to Best Practices
• Compare to Voluntary Consensus
Standards like ASTM
• Propose Alternatives
• Analyze Cost/Benefits
• Document New/Changed Processes
27
Check Surplus before ordering
Requestor
selects proper
object code
Numbers
Purchase Orders
Send to Vendor
Vendor
Review Quote,
RFP if necessary,
Selects Source
Ships Assets
Scan Invoice into
Document Capture
Logistics
Physically Receives
Assets
Tags Asset and
Collects Data in
Handheld
Approval
Workflow
Budget Check
Accounts
Payable
Business
Division
Enter Purchase
Request
Treasury
Requestor or
Designated Purchaser
Proposed Procurement and Receiving Process
Mail Invoice
Upload Data to
Handheld
Spreadsheet/
Database
Enter Invoice into
Sungard A/P
Receive Assets to
Authorize Payment
in Sungard (Enter
Tag No)
Handheld
Spreadsheet/
Database
Pays Vendor
Deliver Assets to
Requestor
Unload Data from
Sungard to
Handheld
Spreadsheet/
Database
Generates
Financial
“Skeleton”
Records
In
Sungard
Fixed Asset
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Update Sungard
Fixed Asset with
Physical Data
Sungard
Fixed Assets
Export Last
Inventory Date
Computer
Altiris Client Mgmt
Suite
Altiris queries AD for
user and computer info.
Collects Hardware and
Software Information from
computers and users on
network
Computer
Active Directory
Centralized Data on
Network Access, Logins,
Passwords, End Users and
Departments
Computer
Altiris Service Desk
Logs and Tracks Calls,
Generates and Updates
Tickets to add/change
hardware/software
Teamworks
Solution
Sungard
Facilities Work Order
Purchasing/AP
Procurement thru Accts
Payable
TPS Fueling Log
Collects User, Dept, Location
Fueled and Date
FleetPro
Export Last Fueled Date
Fixed Asset Module
Receiving to Disposition
Download
Assets,
Upload
Inventory
Data
Upload
Receivng
Data
Handheld
Interface
Treasury
Capital Asset
Listing for
Financial
Statements
Title I
Asset Listing
Fleet Mgmnt, parts
inventory, procure
supplies, and charge
back labor costs
Fuelman
Collects User, Dept,
Location Fueled and
Date
Risk
Management
Spreadsheet
Manual Excel
spreadsheet for
Vehicles
29
Proposed
Delivery
Analyze Impact on Organization
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Changes to Roles and Responsibilities
New Staffing
Job Descriptions
Employee Performance Objectives
Communications
Training
30
Implementation Roadmap
• Present Study to Steering Committee and SME
• Keep SME’s Involved and Informed -- Part of the Solution,
Organizational Buy-In
• Develop Phased Implementation Approach -- baby
steps
• Determine New Systems and Interface Requirements
• Obtain Approvals
• Document New Policies/Procedural Documentation
• Create Change Management/Communication Plan
– Communicate New Roles/Responsibilities
– Design and Provide Multiple Training Opportunities
31
Monitor
• Maintain User Groups to Solicit Feedback and
Refine Processes
• Determine and Track Performance Metrics
– Loss Rate by Number and Value
– Overage/Shortage Rates by Number and Value
• Investigate Lost, Damaged or Destroyed
Assets
– Establish Independent Review Committee to
investigate and recommend action
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Adjust
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Review
Re-evaluate
Refine
Re-train
33
Questions
Marla Williams, CPPM
President
Integrated Asset Management, Inc.
marla@weinventoryassets.com
(800) 731-9569
Severna Park, Maryland
and
President, Federal Center Chapter
34