According to Britton, Connellan, Croft (1989) says Asset Management is "difine good asset management in terms of measuring the value of properties (assets) in monetary terms and employing the minimum amount of expenditure on its management. Based on the management of physical assets, definitively asset management is the science and art to guide wealth management that includes the process of planning asset needs, obtaining, inventorying, legal auditing, appraising, operating, maintaining, renewing or eliminating to transfer assets effectively and efficiently.
Various notions of asset management say that asset management is a systematic process that maintains, upgrades and operates assets in the most cost-effective way through the creation, acquisition, operation, maintenance, rehabilitation and disposal of assets related to:
(1) Identify what the asset needs.
(2) Identify funding needs.
(3) Acquire assets.
(4) Provide logistical support and maintenance support systems for assets.
(5) Remove or renew assets to effectively and efficiently meet the objectives.
The essence of asset management is that asset management deals with applying sound technical and financial judgments and management practices to decide what assets need to meet business objectives, and then to acquire and retain assets over the life of the asset down to the disposal. In the international world asset management has grown quite rapidly. Local government asset management can be divided into five working phases that include; asset inventory, legal audit, asset valuation, optimization of utilization and development of asset management information system, where the five stages are interconnected and integrated with each other.
More clearly it is summarized as follows:
1) Inventory of assets.
Asset inventory is an activity consisting of two aspects, namely physical inventory and juridical / legal. Physical aspects consist of shape, area, location, volume / number, type, address and others. While the juridical aspect is the status of mastery, legal issues owned, the ultimate limit of mastery. The process of work done is data collection, codification / labeling, grouping and bookkeeping / administration in accordance with asset management objectives.
2) Legal audit.
Similarly, concerning legal audit as the scope of asset management work in the form of an inventory of asset control status, systems and procedures for controlling or transfer of assets. Next identify and seek solutions to legal issues, and strategies to solve various legal issues related to asset control and transfer. Problems often encountered in legal audit, concerning the status of a weak tenure, assets controlled by others, the transfer of assets that are not monitored and others.
3) Asset valuation.
The continued unity of asset management, which is an asset valuation activity as an effort to assess the assets held by the local government and is usually carried out by an independent valuation consultant. The result of the value will be used to know the value of wealth and information for the pricing of the assets to be sold.
4) Optimization of assets.
Furthermore, the optimization of assets is an activity to optimize the physical potential, location, value, amount / volume, legal and economic assets owned.In this activity the assets controlled by the local government are identified and grouped into potential and unutilized assets. Potential assets can be grouped by leading sectors that can become the foundation of national economic development strategies, both in the short term, medium and long term. To determine whether it should be measurable and transparent, while assets that can not be optimized, should be sought as a factor, whether legal, physical, low economic or other factors, so that each asset will give its own value. The end result of this stage is recommendations in the form of targets, strategies and programs to optimize controlled assets.
5) Supervision and control.
Then as the final activity of asset management that is supervision and control and this is often a blasphemy material to the local government at this time. The most effective means to improve the performance of this aspect is the SIMA embedment. Through SIMA, work transparency in asset management is ensured without the need for fears of weak supervision and control. In SIMA, the four aspects above are accommodated in the system by adding aspects of supervision and control. Thus every handling of an asset, monitored clearly, ranging from the scope of handling to who is responsible for handling it. This will be expected to minimize KKN in the implementation of services by LGs.
"OBJECTIVES OF ASSET MANAGEMENT"
The purpose of asset management can be determined from different dimensions or point of view. In general, the purpose of asset management is to make the right decisions for the assets to be managed effectively and efficiently. Effective is the achievement of results in accordance with the objectives as predetermined. Effective in asset management means that managed assets can achieve the expected objectives of the organization concerned, eg achieve the highest performance in customer service. While effectiveness means the degree of success that can be achieved based on the goals set. Or effectiveness is a measure that shows the high-low targets that have been achieved eg the number of achievements, the degree of quality, time and others. An achievement can be expressed in the percentage of targets achieved from the overall set target. If the achievement of the target is high, its effectiveness is also higher. A series of activities that can realize the objectives appropriately, then means that all activities have a high effectiveness. In other words effective it is able to achieve goals or targets that have been set.
As efficiently means using the lowest possible resources to get a high (output) result, or efficiently it's a high ratio between output and input. In asset management, efficiency is always inherent in every stage of asset management especially in order to achieve high efficiency in using time, effort and cost. If the asset's objectives are more specific than general objectives, then the more detailed asset management objectives are to be able to:
*Minimize costs over the life of the assets
*Can generate maximum profit
*Can achieve optimum use and utilization of assets (optimizing the utilization of assets)