Satish Kamat Director JamBuster

It Pays To Pay For Asset Management Software!

Satish Kamat, MD, 13 January 2014.

Like every boot strap start-up, when we started JamBuster in 2004, Excel was our tool or weapon of choice for every data problem we had to manage. It was our database for employee information, payroll, sales contacts and managing assets – consumables, furniture and IT equipments. It worked really well, until we had 25-30 employees. The IT guy was looking after IT assets, office manager after office equipments, stationary and furniture, and finance manager took care of the depreciation and maintenance agreements.

Then came a customer who started sending us sophisticated telecom equipments costing few hundreds to thousands of US$. Our first reaction was to have our team to look after their equipments. This started to become a challenge as soon equipments out-numbered our team by 4 to 1, without counting their IT assets or furniture pieces.

To top it, export-import, calibration, maintenance issues needed standard practices, visibility and started taking people’s time meant for developing products. In 2006-7, people cost in India was still cheaper than buying enterprise software. So we hired a facility lead with some telecom background. At about INR 5 lakhs per year, we saw that as a cheap insurance to protect assets worth INR 50 Million ($1MM) at 1%.

By the time we reached 50 people and 200+ equipments and 200+ furniture pieces, with the volume of equipments, transactions, maintenance schedules and repairs, the person was working 10+ hours a day. So we thought of putting another person to help. By this time, salaries in India were more than doubled for similar profile. Now the cost had become about 4% of the cost of the equipment.

Even if we hire people, we realized that there were certain self-service requirements which needed a tool that can be accessed for mundane task,such as availability look up, depreciation schedule or who has which equipment to borrow for few days..

This was also the time, we had developed the People (actually only Organization Chart & Profile) & Project modules. So we looked at adding the Asset module. So we asked the customer to be the development partner and showed them cost benefit. Turnout that prototype had shown that we were asking customer to send another 4 copies of an equipment costing $25K, when we already had two that needed slight repairs. By this time, customer had more than US3MM worth of equipment with us. We integrated the asset module with our People Module, in such a way, that:

  • CorpCloud shows list of each asset assigned for the individual, by project and its return date.
  • Team member can see availability of various equipments and order it through their project folder.
  • Finance team can pull a depreciation report in few seconds by various filters.

For many companies in developing countries like India, earlier the cost of resource was so low that software that provided some self-service and some control were much costlier. Hence companies preferred adding employees and used EXCEL predominately. Over last 10 years, that has changed dramatically. A competent professional who can look after your assets in India today cost about INR 8-10 lakhs/year (~$20K/year). This has started companies to start warming to the use of software. A good enterprise Asset Management Software should not cost more than INR 250,000/year for 100 people team. This means ROI on such software is about 400% and can pay for itself in less than 6 months, including transition and training cost.

There are other benefits of using a properly configured and utilized asset management software other than reduce costs:

  • Mitigate compliance risks, such as FDA requirements in clinical trials,
  • Maximize utilization of equipments through better visibility,
  • Use trends to order consumables just in time and reduce inventories and wastage, and
  • Automation using scanning technologies to increase speed and accuracy

So if your team is still less than 25 People and less than 100 pieces of assets to watch, EXCEL is useful with limited mundane activity. But if your team has crossed 30+ people and 100+ assets, a good enterprise Asset Management Software should pay for itself in less than 6 months and provide more savings.

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