Asset Management Is No Longer a Year-End Register
For a long time, asset management in many companies meant two things: a fixed asset register in finance, updated when something was bought or sold, and an annual count before the external auditor arrived. Maintenance ran in another department with its own files. Operations knew the real condition of the equipment but recorded it nowhere. Finance knew what an asset cost but not its condition; maintenance knew its condition but not its cost; and management never saw the whole picture when a replacement decision came up.
The clearest trend today is bringing those three views together. An asset is followed from the moment its purchase is planned until it is disposed of, and everything that happens to it sits in one place: location, custodian, operating hours, maintenance, failures, costs, depreciation and book value. Sensors and mobile apps help collect the data, but the value comes from tying it to financial and operational decisions.
This article looks at the main asset management trends, what has changed in each, and what it means in practice for Saudi companies, with hypothetical worked examples, KPIs and realistic first steps.
Where Does Your Organisation Stand?
Before the trends, it helps to know your starting point. Practice falls roughly into four levels:
| Level | How work is done | Data available |
|---|---|---|
| 1. Reactive | Fix after failure; register incomplete or in Excel | Asset list and purchase cost only |
| 2. Preventive | Scheduled maintenance by time or meter; register in the system | Maintenance history and cost per asset |
| 3. Condition-based | Maintain when wear indicators appear; periodic or continuous readings | Condition readings and failure patterns |
| 4. Predictive and planned | Estimate likelihood and timing of failure; plan replacement on total cost | Enough history plus analytical models |
Most organisations do not need every asset at level four. A cheap standby pump is fine at level two; the main compressor on a production line may justify level three or four. The modern approach is not to push everything to the top, but to choose the right level for each asset based on criticality and the cost of downtime.
Trend 1: From Asset Register to Lifecycle Management
In July 2024 ISO published updated editions of ISO 55000 and ISO 55001 for asset management, along with two new standards: ISO 55012 on people involvement and competence, and ISO 55013 on data for asset management. A standard dedicated to data reflects what practitioners already know: most asset management problems start with missing or conflicting data.
In practice, this means viewing the asset across its whole life: planning and justification, purchase and receipt, operation and maintenance, upgrade or revaluation, then disposal. Each stage produces data that must be captured and decisions that depend on it. Our guide to the fixed asset lifecycle covers the stages in detail.
Trend 2: Condition-Based and Predictive Maintenance
Traditional preventive maintenance runs on time or meter: change oil every 500 operating hours, inspect the motor every six months. It works, but it can mean servicing an asset that does not need it, or missing wear that shows up before the due date. Condition-based maintenance adds real measurements, such as vibration, temperature, oil pressure and power draw. When a reading crosses a threshold, a work order is raised.
Predictive maintenance goes further, estimating when failure will occur from how readings change and from the failure history of similar assets. It needs enough historical data and analytical models, and it does not work well if past failures were never recorded with their causes.
Hypothetical comparison: a plant has 8 identical air compressors. Last year they had 12 unplanned failures, averaging 6 hours to repair, and an hour of downtime on the connected line costs SAR 4,000. Downtime alone: 12 × 6 × 4,000 = SAR 288,000, before parts and labor. If vibration and temperature monitoring caught half of those failures early enough to fix them in planned downtime, the potential downtime saving is around SAR 144,000 a year, to be weighed against the cost of sensors, installation and monitoring. That is the kind of calculation that should precede any investment. For maintenance planning, see our article on ERP preventive maintenance.
Trend 3: Industrial IoT
Cheaper sensors and easier connectivity make it viable to monitor mid-value assets, not just critical ones. The practical challenge is not fitting the sensor but what happens to the data. One machine can send a reading every few seconds; hundreds of machines produce far more data than an ERP needs to hold.
Good practice is to process readings close to the source or in a specialist monitoring platform, and pass to the ERP only what needs action: a threshold alert, an hour-meter reading to trigger scheduled maintenance, or a daily summary. That keeps the business system clean while detailed data stays available for engineering analysis. Read more in our article on ERP and IoT.
Trend 4: Digital Twins, Realistically
A digital twin is a virtual model of an asset or facility updated with real operating data, letting you simulate scenarios before acting, such as the effect of a heavier load or a delayed service. It is valuable for complex, high-value assets like power plants, refineries and large buildings. It is also expensive to build and maintain, and pointless if the basic data about the asset itself is unreliable. For most mid-sized companies, the realistic first step is an accurate register with full maintenance history. That alone is a big leap.
Trend 5: Mobile Apps and Asset Tagging
The simplest trend, and the fastest to pay off. Each asset carries a QR code, barcode or RFID tag linked to its unique number in the system. A technician scans it to see asset details, service history and open work orders, and records inspections and photos on site. Stocktakes shift from matching paper lists to field scans compared automatically with the register, so missing or misplaced assets show up immediately. See our guide to asset tracking.
Trend 6: Cloud-Based Asset Management
A cloud system gives access from site, office and phone without local infrastructure and makes it easy to add locations and users. In the Kingdom, take account of the Cloud Computing Regulatory Framework, which classifies government data and prohibits it from leaving the country, the National Cybersecurity Authority's Cloud Cybersecurity Controls, and the Personal Data Protection Law where records include personal data such as employee custody assignments.
Trend 7: Linking Asset Operations to Finance
Less glamorous than sensors and AI, but the trend with the most impact on decisions. When work orders link to spare parts from inventory, to purchasing and to cost centers, the true cost of running each asset becomes visible. When the operational record links to the financial one, accounting judgements line up with reality:
- IAS 16 requires useful life and residual value to be reviewed at least at each financial year end. Condition and failure data make that review evidence-based rather than a fixed assumption.
- IAS 16 also requires significant components with different lives to be depreciated separately, such as a heavy machine's engine or a factory roof. That only works if the register records components.
- Separating maintenance that is expensed from improvements that are capitalised needs a clear rule applied when the work order is recorded, not at year end.
- For tax, the income tax rules set depreciation pools and declining-balance rates, such as 25% for factories, machinery and equipment, which may differ from accounting policy and require reconciliation.
Trend 8: Operational Technology Cybersecurity
Every connected asset is a possible entry point. In 2022 the National Cybersecurity Authority issued the Operational Technology Cybersecurity Controls (OTCC-1:2022) as an extension of the Essential Cybersecurity Controls, setting minimum requirements for organisations running industrial control systems. Core practices include separating OT networks from IT networks, limiting access to the minimum needed, managing firmware updates on connected devices, and watching for unusual traffic patterns.
Trend 9: Energy and Sustainability
Metering energy use for major assets exposes equipment that consumes more than its peers, which is often equipment due for maintenance or replacement. Investors and lenders increasingly ask for emissions and energy efficiency data too. When energy readings are recorded against the asset, producing that data becomes easier and more accurate.
Trend 10: People Before Technology
A dedicated ISO standard on people involvement and competence is no accident. A technician who has run a machine for ten years knows its sounds and signs before any sensor does, but that knowledge disappears if it is never recorded. Part of any modernisation project is turning tacit knowledge into data: inspection checklists per asset type, standard failure cause codes, and training to capture them on site. Without maintenance teams involved in the design, mobile apps go unused however good they are.
Priorities by Sector
| Sector | Key assets | Practical priority |
|---|---|---|
| Contracting | Heavy equipment, vehicles, scaffolding | Track site, project and custodian; charge equipment cost to projects by operating hours |
| Manufacturing | Production lines, compressors, motors | Condition-based maintenance on critical assets; link downtime to the production plan |
| Distribution and transport | Trucks, reefer units, forklifts | Cost per kilometre per vehicle; service before peak seasons |
| Property and facilities | HVAC, lifts, generators | Maintenance contracts and warranties; unit complaints linked to work orders |
| Offices and services | IT equipment, furniture, software, licences | Employee custody, licence expiry dates, periodic counts |
In contracting especially, equipment moves between projects constantly. Any delay in recording a transfer charges the equipment to the wrong project, making one look more profitable than it is and another look worse.
Asset Performance KPIs
| KPI | Calculation | Use |
|---|---|---|
| Mean time between failures (MTBF) | Total operating hours ÷ number of failures | Reliability; comparing identical assets |
| Mean time to repair (MTTR) | Total repair hours ÷ number of failures | Maintenance efficiency and spare parts availability |
| Availability | MTBF ÷ (MTBF + MTTR) | Share of time the asset is ready to run |
| Planned maintenance compliance | Work orders done on time ÷ scheduled | Discipline of the maintenance programme |
| Maintenance cost to replacement value | Annual maintenance cost ÷ replacement value | Signal for repair vs. replace |
Hypothetical example: a pump ran 4,000 hours in a year, failed 5 times and took 40 hours in total to repair. MTBF = 4,000 ÷ 5 = 800 hours; MTTR = 40 ÷ 5 = 8 hours; availability = 800 ÷ 808, about 99%. If an identical pump at another site shows an MTBF of 2,000 hours, the question becomes what differs in operation, maintenance or conditions.
Repair or Replace: An Example
A truck bought seven years ago has cost SAR 38,000, then 52,000, then 71,000 in maintenance over the last three years, and was off the road for 24 days last year. A comparable new truck costs SAR 420,000 with expected maintenance of around SAR 15,000 a year in its early years. The rising cost trend, plus downtime and the rental or late deliveries it causes, makes replacement worth serious study. The numbers are hypothetical, but they show the decision needs maintenance and downtime data per asset, not purchase cost alone.
Common Mistakes
- Starting with the most expensive technology: sensors before an accurate register give you good data on assets whose cost and custodian you do not know.
- Sensors on everything: cost multiplies, value does not. Focus on assets whose downtime is expensive.
- Free-text failure causes: if every technician writes causes differently, patterns cannot be analysed. Use a defined cause list plus a notes field.
- Maintenance separated from finance: a standalone maintenance tool that cannot see parts cost or book value leaves replacement decisions incomplete.
- Expecting instant predictive results: models need enough failure history, which can take months or years depending on fleet size and failure frequency.
- Letting the register decay: an accurate register today is inaccurate within a year if transfers and disposals are not recorded on time.
Where to Start
- A reliable register: field count, a unique number per asset, and defined category, location, custodian and department.
- Criticality ranking: identify the assets whose downtime costs most; they are your priority.
- Maintenance and failures with causes: without this history nothing can be analysed later.
- Maintenance linked to inventory and finance: every part and labor hour booked to the asset and its cost center.
- Condition monitoring on critical assets only at first: a limited pilot, measured before scaling.
- An annual joint review: finance, maintenance and operations review useful lives, residual values and next year's replacement plan using the year's data.
How Tranquil Supports Asset Management
Tranquil's asset management module gives each asset a unique code with automatic classification, tracks status (available, in use, disposed), department, available and reserved quantities, and current custodian and location. It records transfers between locations, departments and custodians with date, type, reference and status, and covers purchase, automatic depreciation in line with accounting standards, revaluation, damage and sale or disposal, with hierarchical categories for tangible and intangible assets such as licences, patents and trademarks. It is linked to financial accounting, inventory and purchasing in one cloud ERP.
Frequently Asked Questions
What is the difference between preventive and predictive maintenance?
Preventive maintenance follows a fixed schedule or meter. Predictive maintenance estimates when failure is likely from condition readings and failure history, so work is done when it is actually needed.
Do all assets need sensors?
No. Start with critical assets whose downtime is costly. Many assets are well served by a good preventive programme and an accurate register.
What is ISO 55000?
An international series of asset management standards. Updated editions ISO 55000:2024 and ISO 55001:2024 were published in July 2024, alongside new standards on competence and on asset management data.
How often should useful lives be reviewed?
Under IAS 16, residual value and useful life are reviewed at least at each financial year end, and any change is applied prospectively.
Are digital twins worth it for mid-sized companies?
Usually not as a first step. They suit complex, high-value assets and need reliable, continuously updated data. Mid-sized firms gain more first from an accurate register, full maintenance history and condition monitoring on critical assets.
How do we get started with Tranquil?
Contact the Tranquil team to review your asset register and requirements and receive a quote within 24 hours.