Asset Management vs. Facility Management: What's the Difference?

Asset management and facility management (FM) are terms often used interchangeably, but they refer to different processes within facilities management. Let’s explore the key differences between the two and why they are sometimes confused.

Let’s explore their differences and why they are often mistakenly considered the same.

What is Asset Management?

The Institute of Asset Management (IAM) defines asset management as the process of balancing costs, opportunities, and risks to maximize asset performance. This means managing an organization’s physical assets, such as equipment, buildings, and infrastructure, to ensure they provide the best value throughout their lifecycle.

Asset management involves tracking, maintaining, and optimizing these assets to meet an organization’s goals. The types of assets managed include:

• Facility-based assets like HVAC systems, lighting, and building infrastructure.
• Employee-related assets such as vehicles or mobile devices.
• IT-related assets like workstations, servers, and other technology infrastructure.

Key Components of Asset Management

Asset management focuses on keeping assets in good working order to avoid costly repairs or replacements. Some of the main components include:

• Preventative Maintenance: This involves regular checkups and tests to ensure equipment is functioning correctly. Preventative maintenance helps to reduce repair costs, extend the life of equipment, and prevent breakdowns before they happen.
  For example, regularly inspecting an HVAC system can catch issues early, reducing the chance of a major malfunction.
• Predictive Maintenance: Predictive maintenance goes a step further by using data and monitoring systems to predict potential problems. This allows managers to fix issues before they cause significant damage.
  For instance, sensors on machinery can detect when performance drops, signaling the need for maintenance before a complete breakdown occurs.
• Cost-Benefit Analysis: When an asset requires repair, asset managers weigh the costs of repairing it against its remaining value. If the cost of repair is higher than the asset’s value, replacing it is often the better option.

What is Facility Management (FM)?

Facility management focuses on managing the physical environment, including buildings, equipment, and infrastructure. It covers a wide range of activities, including:

• Maintenance and repairs
• Cleaning and janitorial services
• Security and safety management
• Energy management
• Waste management

Facility management ensures that buildings and other facilities run smoothly and efficiently. This includes maintaining a safe environment for employees and visitors, as well as making sure the facility meets operational and regulatory standards.

Key Goals of Facility Management

Facility management ensures that buildings, spaces, and equipment are used efficiently and are kept in top condition. Some of the primary goals include:

• Maintaining a safe environment: Facility managers ensure that buildings comply with all relevant safety standards and regulations.
• Optimizing the physical environment: Facility managers focus on keeping the environment comfortable and functional for employees and visitors.
  For example, in a retail store with a climbing wall, facility managers make sure it is safely built and well maintained.
• Reducing operational costs: By maintaining equipment and facilities, FM professionals can help reduce energy use, minimize waste, and prevent costly repairs.
  For instance, keeping an HVAC system in good condition helps avoid breakdowns that would disrupt business operations.

How Asset Management and Facility Management Differ

While asset management and facility management have overlapping functions, they differ in a few key ways:

• Focus: Asset management focuses on the performance of specific assets, such as equipment and machinery. Facility management, on the other hand, is concerned with the overall environment, including buildings and the people who use them.
• Goals: The goal of asset management is to extend the life of assets and maximize their value. Facility management focuses on ensuring that the building operates smoothly and meets the needs of its occupants.
• Metrics: Asset management is typically measured by metrics like return on investment (ROI), total cost of ownership, and asset performance. Facility management metrics can include work orders, maintenance costs, and building efficiency.

Integrated Facilities Management: Combining Asset and Facility Management

An Integrated Facilities Management (IFM) solution, like the one provided by NEST, combines both asset and facility management into one streamlined process. By integrating these two functions, organizations can achieve better oversight and efficiency across all their assets and facilities.

Why IFM is Important

IFM brings together the management of assets and the overall facility to ensure that everything works seamlessly. This holistic approach offers several benefits:

• Improved Efficiency: Combining asset and facility management allows for better coordination between the maintenance of equipment and the overall operation of the building.
• Cost Savings: An IFM solution can help identify areas where maintenance costs can be reduced, such as through preventative maintenance or energy-saving initiatives.
  For example, keeping HVAC systems in good condition prevents expensive repairs and helps save on energy costs.
• Better Decision Making: With an IFM system, facility managers have access to data from all parts of the facility. This allows for better decision-making based on real-time information.
  For instance, if an HVAC system breaks down, it not only affects the equipment but also disrupts the entire facility. With an IFM solution, problems like this can be quickly addressed to minimize disruption.

Why NEST’s IFM Solution Stands Out

NEST’s Integrated Facilities Management solution offers a full range of services designed to optimize both asset and facility management. These include:

• Smart Work Order Technology: NEST’s platform helps manage day-to-day operations without any tech or subscription fees.
• Independent Service Provider (ISP) Network: With access to more than 27,000 service providers, NEST ensures quality service across all locations.
• Operational Command Center: NEST offers 24/7/365 support for all facility management needs.
• Analytics and Financial Consulting: By leveraging data, NEST provides insights that help reduce costs, optimize program spending, and improve overall efficiency.

By combining the best of both asset and facility management, NEST helps companies achieve better results while reducing operational costs and improving efficiency.

Conclusion

Asset management and facility management are both essential for running a successful organization. While asset management focuses on maximizing the value and performance of individual assets, facility management ensures that buildings and spaces are safe, efficient, and operational. Integrated Facilities Management solutions like those offered by NEST combine these two functions to create a more effective, streamlined approach to managing both assets and facilities.

For more information on how NEST’s IFM solution can support your organization’s needs, contact us today.