By Khairani Afifi Noordin, The Edge
Assets keep a business afloat. They can be sold in lean times, used as collateral during expansion and help produce a healthy balance sheet. A medium-sized company of fewer than 200 employees typically owns and manages between 1,000 and 10,000 tangible fixed assets. This is not an easy feat as it can be laborious.
This was the problem Andrew Diamond, CEO of IsItUp.com, saw when he was working with his clients back when the company was still offering internet-connectivity tracking. "Back then, I went from company to company to check why their internet connections were lagging and not optimal. Using Raspberry Pi (single-board computers), we scanned the network and brought the information to the cloud," he says.
"Later, we worked on the basic model of the programme and started to build a detector. Now, we can look into the cloud and see how many devices are using the connection, whose they are and where they are located."
"But this is not enough. The companies, seeing the great potential of having visibility of their assets, asked for visibility of their assets, asked for visibility of not only their IT equipment but also their machinery and furniture -- they wanted to track everything. That was when I saw the need."
Tracking the quantity, condition, maintenance and depreciation status of a company's fixed assets is very important when it comes to financial accounting, seeking preventive maintenance and detering theft. Diamond says fixed assets typically depreciate up to 20% in value over five years.
"Some companies, especially the smaller ones, did not think about the problem of asset management. They went ahead and bought assets worth hundreds of thousands and did not think about what would happen to them next -- whether someone else would use them, whether they would be broken beyond repair or whether they would be misplaced," he says.
"This causes serious damage to a company's balance sheet. Just because the cash has been converted into a fixed asset, it does not mean that you should be less concerned about its value."
Eventually, Diamond and his team focused on building software that could optimise fixed-asset management, to make it easy and decentralised. The company now provides clients with quick response (QR) codes or radio-frequency identification (RFID) asset tags that can be used to keep information on their assets such as the serial numbers, the year they were purchased and the person the asset was assigned to.
"Essentially, what we are doing is making the check-and-balance process a lot easier by mobilising and automating everything. All the asset information will be on the platform, including the photos and location," says Diamond.
"Assets move around -- this is normal. Your equipment may even move from your office in Kuala Lumpur to your office in Penang. Employees can easily scan the equipment, determine where it belongs and send it back."
OPTIMISING FIXED ASSETS
Besides adding value to a company's assets, IsItUp strives to increase its clients' productivity by reducing the amount of paperwork they need to do and make their auditing process easier. Diamond says even in larger companies, there are only two or three people in the accounts or finance department managing the fixed assets and this is very inefficient.
"With our platform, everyone can come in and help improve the data. For example, any employee of the company can scan the QR code stickers of the company's chairs and audit the assets via an app," he says.
"You are able to get the GPS coordinates, take pictures, and ascertain the condition of the asset in question. Management of the accounting team can then access the live data through their dashboard to make any assessments."
Fixed assets are an important part of a company. If the fixed-asset database is managed accordingly, companies will be able to optimise the value of their assets, which may be worth a lot more than they thought, says Diamond.
"This is especially for bigger companies with more than 10,000 assets. If they optimise their assets by even 5%, it will probably be worth more than RM1 million. That is why good asset management is important," he says.
IsItUp is growing a steady stream of clients. After coming up with its fixed-asset management platform for companies, Diamond discovered a new problem -- clients with no previous knowledge of asset management did not know where to start.
"These companies had not been tracking their assets at all. So, even if the software is available, knowing where to begin can be very challenging. After talking to them and understanding their problem, we created something called a pre-asset," he says.
Pre-asset is an on-site service the company offers. It includes tagging, sorting through licenses and uploading all the asset information onto the platform. This takes the burden off the company's employees.
"This is challenging because it is difficult to ensure the quality of the data. You have to take into account that these assets depreciate and you need to determine the depreciation value. This means you need to know how old they are and their current value," says Diamond.
"Also, the data entry of the actual assets has to be accurate. For example, the invoice for IT or engineering equipment can be incredibly detailed. But the accounting people in charge are not going to write down all the complex names. They will just enter the item as a computer or laptop.
"Now, imagine having 1,000 different types of IT and engineering equipment simply labelled 'computer' or 'laptop'. How do you manage that? That is why we provide these services."
Although the company provides data entry services, Diamond prefers to work with clients to build up the quality of the data by training his clients' employees. "We want them to be able to do it themselves and learn how to manage their assets on their own. We do go in and help them occasionally. But predominantly, we train the company and show them how to teach their people to do it," he says.
PROVING THE PRODUCT
In the two years developing the platform, Diamond and his team went through many ups and downs in trying to prove that [sic] they had actually addressed an actual need in the market.
"Being a start-up, it was very hard for us initially. Nobody knew who we were and the companies that most needed a service like ours were mainly the big players," he says.
"Imagine being a six-person team competing with tech giants or billion-dollar companies such as Oracle and SAP. They have their brands while we are still building ours. Why would these big companies come to us? It was very challenging."
Despite this, IsItUp gradually proved its business model. It soon received support from venture capital firms such as Gobi Partners, 500 Startups and 8Capita. The company recently secured its largest client to date -- AirAsia Bhd.
Diamond says he is very happy to have the airline as a client as it affirms IsItUp's ability to deliver the best fixed-asset management solution. "We are a start-up, so we really need that endorsement from AirAsia. It is even changing the mindset of potential clients. Before this, they may have wondered whether we were even the real deal. Now, they see that even AirAsia is using our product, so it must be good. That is why our pipeline is growing rapidly."