Central and local governments are under constant pressure to provide the best possible service to citizens at the best possible value for taxpayers' money. At the same time, they are responsible for managing and maintaining a large, complex and very costly portfolio of assets, from land and property to plant, equipment, roads and municipal furniture.
The challenge for public-sector organisations lies in maintaining the right balance between the serviceability of the asset portfolio and the levels of expenditure allocated to purchasing, installing, maintaining and retiring it.
Efficient management of assets is one of the most critical financial challenges facing public-sector organisations, because of the sheer cost incurred in maintaining and managing the asset portfolio. In many countries, governments are the largest property owners in the land, responsible for housing, schools, offices and public buildings. For many public-sector organisations the purchase, deployment and upkeep of assets is the second largest cost item after payroll.
Asset management in the public sector has traditionally been fraught with inefficiency, due to two mutually influential factors. First, having multiple departments manage a diverse array of assets, often over a wide geographical area, has made it difficult to establish a single, central asset register containing a "single source of truth" about each one.
Secondly, information about assets has not been properly shared between different functions (for example, finance and maintenance) and different organisations (for example, neighbouring local authorities). Different assets and different asset categories (plant, buildings, schools) have been managed in different ways, using different computerised or paper-based systems.
The result is an unwieldy mix of automated and manual processes that prevents government organisations from conducting asset-related activities efficiently, and from gaining meaningful information about their assets.
Enterprise Asset Management
The lack of coherent information makes it very difficult to understand what assets are in place and to plan and budget comprehensively for asset purchases, maintenance and redeployment and disposal. Instead, property, plant and other assets are bought and managed on an ad-hoc, often reactive basis. The cost of asset ownership and management is therefore unpredictable, unnecessarily high and difficult to track, making it hard to demonstrate accountability to taxpayers.
One of the organizations that realized the importance of these challenges and decided to deploy Oracle solutions was the Egyptian Social Fund for Development (SFD). By implementing Oracle's Enterprise Asset Management, SFD improved the management of all maintenance activities and improved procurement and inventory management by deploying Oracle's Purchasing and Inventory Management applications.
Bahrain Government's FMIS (Financial Management Information System) Fixed Assets project is one of the remarkable success stories delivered with Oracle solutions for asset management. Today, 33 Bahrain Government Ministries are managing the entire asset-related business processes that cover capital budgeting, asset requisition and purchasing through the Ministry of Finance in a streamlined way. They have online budgetary control and can manage payments to suppliers, asset registration and inventory item cost accounting and reconciliation of centrally held bank accounts.
Even those organisations that have invested in computerised systems for asset management have found that they do not always live up to expectations. Asset management is closely tied to other functions, such as finance, purchasing, project management, maintenance and citizen services. If the systems that manage these areas are not closely integrated, then inefficiency, duplicate effort and inaccuracies inevitably arise.
Oracle Property Manager
Oracle Property Manager is a fully featured software module that manages property leasing, lease administration (both expense and revenue leases), maintenance, collections and utilisation of space from a central console. Using Oracle Property Manager, public sector organisations can intelligently manage a large and diverse property portfolio for maximum financial efficiency. Oracle Property Manager can also be used to identify under-utilised space that can be shared with other departments, organisations or authorities.
Oracle Applications are available to implement as a complete suite or incrementally by module. Based on the market-leading Oracle Database 10g and deployed on the Internet using the secure, robust Oracle Fusion Middleware, Oracle Applications provide a single, easy-to-use system for the management of the entire asset lifecycle.
Key features for public-sector organisations include:
• A central asset register providing a single and up-to-date source of asset data
• A Web-based architecture allowing employees and external parties to access the system securely from any Web-enabled computer or device
• Full financial management features including value and depreciation tracking
• Configurable to meet local legislative and compliance requirements
• Delivers the ability to budget, plan, predict, track, analyse and adjust asset spend
• Full asset lifecycle management from procurement to disposal
• Low overall cost of ownership
Saudi's Saline Water Conversion Corporation (SWCC) is one of the leading public-sector entities in The Kingdom of Saudi Arabia that has implemented this comprehensive asset management system, linking 27 desalination plants via online business processes.
"Following an exhaustive market review, we selected Oracle as a long-term technology partner based on the integrated and complete nature of the Oracle E-Business Suite, as well as the strength and market reach of Oracle's operations in Saudi Arabia," said Loay Musalem, Director of IT at SWCC.
There is a close relationship between government-owned assets and the citizens who make use of them. Whether it is state-owned housing, park benches or lampposts, government organisations need to be able to respond to citizen enquiries, problems, requests and complaints relating to the asset portfolio.
Oracle Customer Relationship Management (CRM) applications allow them to do this in a way that is completely integrated with the rest of the asset management lifecycle. For example, a contact centre agent using Oracle Service can gain immediate access to asset information in the central asset register upon receiving a call from a citizen, and thus provide relevant, timely and useful information relating to the asset in question.
Effective financial management
With assets usually representing the second-largest cost area for any government organisation, effective financial management is key to ensuring a good return on investment and the most efficient use of taxpayers' money. Oracle Financials, widely used in the public sector, provides a suite of financial management, analysis and planning software that allows for sophisticated asset tracking and accounting and the identification of areas for potential cost savings.
Efficient and cost-effective management of assets can only come from having an integrated and standard computer system that can handle all aspects of asset management from procurement to disposal, and which integrates with all other computer systems in which assets are represented.
Oracle is addressing this need with the comprehensive asset lifecycle management functionality in the Oracle E-Business suite. The world's first Web-enabled suite of enterprise resource planning applications, Oracle Applications provides integrated software modules to manage assets in a holistic manner throughout the lifecycle, including:
• Planning and Budgeting
• Collections/Customer Service
• Compliance & Legal
• Financial Accounting including Value Calculation and Depreciation
• Property Management
Public-sector organisations clearly face many challenges as they struggle to maintain a balance between asset serviceability and expenditure. The asset management functionality in Oracle Applications is helping central and local government organisations to manage properties, plant and other assets in an efficient, well-planned, compliant, accountable and cost-effective manner.