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Electronic Asset Management
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The importance of establishing a technology framework to track and manage an asset can not be under estimated. It has been proven if a bank will establish a centralized internet based platform to capture all existing documentation and manage ongoing inspection and improvement data that an asset can increase in value by as much as 15% and mitigate risk associated with environmental and civil law.
During our 30 years in the technology and software business we have seen first hand the importance of selecting and implementing the correct technology to match a specific business problem.
HB NEXT has had the opportunity over the last 3 years to work with large and small banks in the southeast to design and implement an asset tracking and management solution that allows bank mangers to organize all of the documentation associated with an asset.
Assembling your information files correctly must be the number one priority in establishing a proper baseline.
Working with bank mangers I can appreciate the challenges you face when you receive an asset. Sometimes this is a file box with drawings, permits, reports and various types of information.
Upon receipt of a new asset you are overwhelmed with the task of organizing various types of documentation. From project Notice of Intents to disturb land to Engineered drawings that are not current, documentation that is hard to read and information that is usually very difficult to locate much less manage.
Why is site documentation so important?
Recently HB NEXT Consulting was hired by a development company that was fined $265,000 by the Georgia EPD for storm water violations on a site in Georgia. The profile of the site was a 40 acre subdivision with padded lots, streets were in place and all of the required erosion control measures were put in place per the plan. Our role was to evaluate the required documents and records for this site. The profile of this site is similar to sites that you have to deal with. The development company over the year prior to the fine had spent over 300K in erosion control.
We could not locate all of the inspection reports and the ones we did find had items documented that never were signed off on. During the negotiation process with the EPD we were told that the reason they were called in was an adjacent land owner kept on insisting that the site was not being inspected and the weekly reports were not all there. The lack of documentation lead to an enormous fine plus all the related cost associated with defending the case.
The lesson learned in this case is to strictly follow inspection, reporting and documentation requirements. This is one of the least expensive task you will be faced with and one of the most over looked.
Step 1. Organizing the Asset – "Static" Documentation
Remember the old saying, Measure twice and cut once? Do it right or do it twice. The same is true with the setup of the asset. To insure maximum value of an asset all of the information associated with the asset needs to be entered and verified. This is essential in getting the asset setup correctly and with all related historical information accessible.
- Create a site profile in an on-line secure internet database– Enter as much project related data that you can think of that you will need throughout the asset management process. The different data elements will be used at various stages and can eliminate cost and improve overall management efficiency.
- Existing Files and Documents– Better known as "Static Information" or information that has been created by someone else. These are the most difficult documents to deal with due to many different formats, sizes and quality. They exist in multiple places and are difficult to locate. The good news is they exist. The bad news is the quality is very poor in some cases.
- Action – Upload documents to the site profile
- The Value of the Asset - Baseline financial numbers need to be entered to create a proper financial baseline (Original Loan Amount, Current Market Value, Target Sales Price, etc....)
- Action – Enter financial data into the site profile
- Permits– Land assets require a Land Disturbance Permit also known as a Notice of Intent (NOI). Depending on where a site is located a requirement for additional permits may exist.
- Action – Upload permits to the site profile
- Known Issues– As Chris also mentioned in his introduction the importance of investigating the asset you must note in the asset setup if legal issues currently exist and what level of environmental exposure do you have.
- Are their any civil lawsuits?
- Is the State or Federal Environmental Agencies investigating the site/
- Are their any hazards on the site like detention ponds or retaining walls without fencing?
- Open Items– During the setup of the asset establish a punch list of documents and information that is missing, incomplete or does not exist.
- Action– Create a punch list of items in the site profile of open items that can be tracked until completion.
As mentioned earlier one of the most important tasks early on is to collect as much documentation as you can from the company that you are receiving the asset from. Some of these items include:
Some of the items include…
- Land Disturbance permits
- NOI's,
- Site Drawings
- Erosion Control Drawings
- Weekly and Post Rain Inspection Reports
- Water Sampling and Analysis
- County or City Stop Work or Notice to Comply Orders
Once you have completed the setup of the asset it is time to start protecting the asset. In our experience with banks and financial institutions this is where we see the biggest opportunities for improvement and one of the easiest ways to increase value and reduce cost by using the proper methods and technology.
Step 2. Manage the Asset – "Dynamic" Documentation
Land assets are some of the most difficult to deal with because of weather and the un-predictable elements of nature
We have seen banks throw tens of thousands of dollars into a black hole when it comes to erosion control and maintenance of a site. Sending a contractor out to get a site in compliance without a detailed survey and on going routine 3rd party site inspections is a recipe for disaster not to mention very costly.
Warning– Is the Fox guarding the hen house?
You must separate site inspections from 3rd party contractors that are performing site improvements and or erosion control install and maintenance. Never should your allow a erosion control or infrastructure contractor to do work without a neutral 3rd party inspection. Make sure the 3rd party inspection companies that you are using are fully credentialed and carry high levels of professional liability insurance with an errors and omissions clause.
To properly manage a site you need to establish an inspection and reporting protocol for any contractor that you hire to perform work where you can monitor and manage open and closed items from a browser based device and most importantly control all of the information that is captured. Do not allow a 3rd party contractor to manage any of the site information such as storm water / erosion control inspections using their systems or their forms. In order to gain control and mitigate on going risk you need to require them to use your system.
In order to comply, maintain or improve the value of an asset you will have ongoing inspections that need to be performed.
- Required by Environmental Law
- Weekly Inspections
- Post Rain Inspections
- Water Sampling and Analysis
- Rainfall Amount Tracking
- Open Item Tracking
- All documented items during a Weekly or Post Rain Inspection must be addressed and signed off within 7 business days. By using an internet based on-line system you can receive alerts and notifications if specific items are not completed within the required time.
- Work Order Management
- All documented items that require infrastructure improvement or erosion install or maintenance should be tracked using a line item work order approval process. By incorporating this into your work process it will eliminate unnecessary work to be performed without approval and save you money.
Proper management of 3rd party contractors is crucial. Changing from external to internal control of reporting is the 1st step. Step 2 is placing a requirement to do business with the bank on your 3rd party contractors to input data from inspections, surveys, and audits into a "Dynamic" document management process.
This may not seem to be a big deal but I can assure you it is critical. You gain complete control of your dynamic documentation and your ongoing documentation requirements.
By implementing a dynamic document and records solution it will allow you to control information, contain cost, mitigate risk, save time and most importantly it will increase the value of the asset.
If you manage a small or large array of assets the key is to set them all up equally and establish a protocol to capture, distribute, manage and retain project site data in a central internet based location.
In Summary
In today's business environment it is essential that you set up a secure internet based, document and records management system that will allow you to manage documents that exist "Static" and documents that will be created in the future "Dynamic". The primary goal is that in order to insure proper documentation the system that you set up must allow engineering firms, design firms, inspection companies and bank employees to enter data and upload information from any secure internet browser based device into a central internet data repository.
To learn more about how to setup a dynamic asset management solution that will allow you to organize all of your existing documentation in a central internet data repository and capture ongoing information, you can contact us via email at corporatesales@hbnext.com or you can call our office at 678-336-1357.
TOOLS FOR ONGOING ASSET MANAGEMENT
NEXT Sequence is used by one of the nations largest homebuilders to manage over 300 assets in 25 states using multiple 3rd party contractors to perform the work.
Faced with a federal mandate from the EPA and Department of Justice, this national homebuilder selected NEXT Sequence to help manage their post consent decree requirements.
As discussed in this document about the importance of setting up an asset properly there is equal importance in the ongoing management of the asset. This starts with how you setup your field operations process going forward.
With a centralized internet based system in place there are 3 steps that you must take to insure proper ongoing management of an asset.
Step 1
Require all contractors to use your system to input ongoing NPDES Storm Water Inspections, Document Open and Closed Items and Erosion Control Work Orders. As discussed in module 1 this is the dynamic document management process where information is logged or captured directly into an on-line asset file. This step will eliminate loss documents, improve regulatory compliance and give you the asset manager complete control of the process.
Step 2
All open items or recommendations discovered during step 1 should go through a work order approval process. By doing this you can control cost and hold 3rd party contractors accountable.
Step 3
Items that are corrected or improvements that are made need to be documented in a corrective items log. This will help you track cost associated with each asset.
The end result of managing your dynamic document process going forward with increase the value of the asset.
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