Business Core · Business Assets · Module
Lifecycle
Acquisition, maintenance, replacement and disposal, planned rather than triggered by failure. The unplanned version is always more expensive.
The idea
How it works
Purchase price is usually a minority of what an asset costs over its life. Maintenance, licensing, energy, training and disposal make up the rest, and they arrive after the decision has been made.
Replacement planned in advance is cheaper than replacement triggered by failure, in every dimension except this quarter’s budget — which is why the second happens so often.
Working with it
In practice
- 01
Cost the whole life at purchase
Including maintenance, consumables, training and disposal. The comparison between options usually changes.
- 02
Set expected life at acquisition
A date written at purchase produces a planned replacement. One decided later produces an emergency.
- 03
Plan replacement before failure
Assets rarely fail without warning. The warning is usually ignored because acting on it costs money now.
- 04
Include disposal
Data, regulated materials and contractual obligations all make disposal more than a skip.
One level in
The components of lifecycle
A component is something that exists afterwards which did not exist before — a deliverable or a mechanism, not an intention.
The lifecycle cost model
Total cost of ownership per asset, including everything after purchase.
Learn
Set the expected replacement date at purchase. A date decided later is decided during an outage.
The other modules in business assets
Asset register
A current list of what the organisation holds, where it is, and who is responsible for it. Administrative-sounding and the foundation for everything else here.
LearnIntellectual property
What the organisation owns that is not physical — trademarks, patents, copyright, data — and the rights position around each.
LearnUtilisation
How much each asset is actually used against what it could be. The measure that turns an inventory into a management tool.
Learn