Implementation Tasks

The organization needs to undertake the same activities for rationalization and disposal of assets that would be used for asset acquisition or replacement.

All asset rationalization and disposal strategies require the following:

• Compilation of asset details (eg identification, description, capacity), usually from the asset register
• Asset condition assessments
• Maintenance programs
• Future renewals or upgrade cost estimates
• Income forecasts.

It is only when these activities are completed that the organization will really understand the true cost of retaining the asset and can therefore look at reducing their future costs and liabilities by assessing the relative rationalization options.

Each option will have a cost, and this can be compared with the potential benefit that would be gained by the organization in disposing of or rationalizing the assets concerned.

By understanding the relative costs and benefits, the organization can then identify the investment that may be warranted in preparing the asset for divestment, by considering the various options that may increase the overall return (eg. undertake obvious repairs and improve the asset's appearance).

This process will often involve a series of iterations before the organization offers the asset for disposal.

Consideration of feedback from the market or the target organization also needs to be incorporated into the process.