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The Difference Between Asset Management and Facility Management

This article provides an overview of asset management and facility management, focusing on some successful examples and challenges that organizations face.

 

 

Organizations face increasing challenges to maximize the utilization of their resources. Two of the most important resources are physical assets, such as equipment and software, and facilities, such as buildings and furniture. Hence, the importance of asset management and facility management, two interconnected disciplines that aim to improve the efficiency and effectiveness of resource utilization.

In this article, we will explore the difference between asset management and facility management, clarify their objectives, and identify the key metrics used to evaluate them. We will also provide examples of their applications in various sectors and emphasize the importance of collaboration between them to achieve organizational goals.

The Difference Between Asset Management and Facility Management

  • Focus Area: Asset management focuses on the assets themselves, whether they are equipment, buildings, or even computer programs, and how to maintain and utilize them in the best possible way. Facility management, on the other hand, deals with the physical environment as a whole, including the assets within it, to provide a safe and efficient working space.
  • Objectives: Asset management aims to increase the value of assets over the long term and achieve the highest return on investment. Facility management aims to ensure the performance of the physical environment at the highest level of service for its users.
  • Measurement Methods: Asset management is measured by factors such as return on investment, total cost of ownership, and utilization. Facility management uses a variety of metrics depending on the type and use of the facility, such as work order counts, asset condition, and the effectiveness of maintenance programs.

Practical Examples of the Difference Between Asset Management and Facility Management:

  1. Focus Area:
  • Asset Management:
  • Equipment: Maintaining production machinery in a factory to ensure its continuity and prevent breakdowns.
  • Buildings: Renovating and refurbishing an administrative building to improve energy efficiency and increase its market value.
  • Computer Programs: Updating operating systems to ensure data security and enhance performance.

 

  • Facility Management:
  • Cleanliness: Regularly cleaning offices and corridors in a commercial building to maintain a healthy work environment.
  • Security: Installing surveillance cameras and alarm systems in a warehouse to secure goods.
  • Maintenance: Repairing and replacing damaged furniture and appliances in a hotel to ensure guest comfort.

 

  1. Objectives:
  • Asset Management:
  • Increase ROI: Purchasing new, efficient equipment to improve productivity and reduce costs.
  • Reduce Total Cost of Ownership: Negotiating maintenance contracts at reasonable rates.
  • Improve Asset Utilization: Leasing vacant space in a commercial building to generate additional income.

 

  • Facility Management:
  • Enhance Energy Efficiency: Using energy-saving lighting systems in a residential building.
  • Improve User Satisfaction: Providing fast and efficient technical support services to employees in a company.
  • Ensure a Safe Work Environment: Providing suitable facilities for people with special needs at an airport.

 

  1. Measurement Methods:
  • Asset Management:
  • Return on Investment: Calculating the ROI ratio in a project to purchase new equipment.
  • Total Cost of Ownership: Tracking maintenance and repair costs of a building over its assumed lifespan.
  • Asset Utilization: Calculating the percentage of computer program usage by employees.

 

  • Facility Management:
  • Work Order Counts: Recording the number of maintenance and repair requests in a factory.
  • Asset Condition: Assessing the condition of furniture in a hotel periodically.
  • Effectiveness of Maintenance Programs: Measuring equipment downtime due to breakdowns.

This means that asset management focuses on the asset itself, while facility management focuses on the environment surrounding the asset and how efficiently it operates.

 

 

Case Study: Implementation of Asset Management and Facility Management System in Malaysian Government Agencies

This study sheds light on asset and facility management as a new field facing challenges in implementation, especially within government agencies. Despite possessing a large amount of assets and facilities, government agencies lack effective systems to manage these resources and utilize them optimally.

The Malaysian government recognized this challenge and issued a new guideline called the "Comprehensive Government Asset Management Guide" to direct relevant agencies on how to manage their assets and facilities. Despite the usefulness of this guide, some agencies face difficulties in implementing it due to differences in the nature of each agency's work and the available resources.

The study identified four key factors for the successful implementation of asset and facility management systems in Malaysian government agencies, namely:

  • Senior Management Support: Commitment and support from senior leadership in the implementation process.
  • Awareness and Participation Culture: Spreading awareness of the importance of asset and facility management among employees and promoting a culture of participation in the process.
  • Capacity Building of the Workforce Team: Training and equipping the workforce team responsible for asset and facility management to enhance their skills and capabilities.
  • Sustainable Management Plan: Developing a sustainable plan to ensure the long-term implementation of the asset and facility management system.

The study indicates that merely having a guideline is not sufficient for the successful implementation of asset and facility management systems. Instead, other success factors such as those identified must be present. The application of these four factors accelerates the implementation process and achieves optimal utilization of government assets and facilities.

Local Practical Examples of Asset and Facility Management in the United Arab Emirates

According to the "Facility Management in the Digital Age Towards Embracing a Smart Future" conference in 2023, asset and facility management is one of the most important areas aimed at improving resource efficiency and effectiveness in any organization. Many governments and private entities in the United Arab Emirates have begun implementing asset and facility management systems, indicating an increasing awareness of the importance of this field.

  1. Emirates Airlines:
  • Emirates Airlines implemented a fleet management system for its aircraft, helping improve maintenance efficiency and reduce costs.
  • Additionally, the company implemented a system for managing its buildings and facilities, leading to improved energy efficiency and a better working environment.
  1. Abu Dhabi National Energy Company (TAQA):
  • TAQA implemented an asset management system, improving operational efficiency and achieving better return on investment.
  • The company also implemented a facility management system, enhancing the level of services provided to customers.
  1. Dubai Electricity and Water Authority (DEWA):
  • DEWA implemented a system for managing its electrical and water networks, improving operational efficiency and enhancing the level of services provided to citizens.
  • Additionally, the authority implemented a system for managing its buildings and facilities, improving energy efficiency and the working environment.
  1. Dubai Municipality:
  • Dubai Municipality implemented an asset management system, improving operational efficiency and achieving better return on investment.
  • The municipality also implemented a facility management system, enhancing the level of services provided to citizens.

Asset and Facility Management in Real Estate Companies: Al Dar Real Estate Company as a Model

 

Asset and facility management is one of the most crucial functions in real estate companies, ensuring smooth operations and high efficiency while maximizing the benefits from properties. Al Dar Real Estate Company in Abu Dhabi stands out as a leading example of companies placing significant emphasis on this area, offering integrated services for asset and facility management to ensure residents' comfort and deliver lucrative returns for investors.

According to the Union News Agency, Al Dar Real Estate Company has expanded its integrated asset and facility management services by acquiring several companies specialized in this sector. These acquisitions included companies such as "FAB Properties" and "Eltizam Asset Management Group" This expansion has increased the company's portfolio to encompass 157,000 managed residential units, along with high-quality retail and commercial spaces. Additionally, the value of facility management contracts managed by the company has risen to 2.5 billion dirhams.

In July 2023, Al Dar Real Estate, International Holding Company (IHC), and Aldar Properties announced the merger of their real estate and facility management businesses, establishing the "Al Dar Properties" platform. This merger has strengthened the company's capabilities, positioning it as a key player in asset and facility management in the region.

These are just a few examples of the applications of asset and facility management in the United Arab Emirates. Many governments and private institutions in the country have begun implementing asset and facility management systems, indicating an increasing awareness of the importance of this field.

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