7 Key Performance Metrics To Track In Asset Management

As a child, did your mom always remind you to take care of your things?

Well, a few things are common about growing up – no matter where you grew up.

That habit of caring about what we own doesn’t really go away. It just grows with us. Whether in life or the business world, taking care of things remains a constant.

For companies, these “things” become assets, such as laptops, machines, buildings, or even software. As they grow, the stakes get higher, and managing these things becomes critical to stay efficient, save money, and, well… avoid surprises!

That’s where Asset Management comes in. It simplifies the tracking and maintenance of assets, helping businesses make the most of everything it owns.

Let’s first understand Asset Management.
 

What Is Asset Management?

Asset Management is the practice of buying, selling, and managing investments to build wealth over time while carefully balancing risk. Professionals who handle Asset Management are often called portfolio managers or financial advisors. Some work independently, while others are employed by specialized firms, investment banks, or financial institutions. Their essential goal is to help their clients grow their money without taking unnecessary risks.

Understanding a client’s comfort with risk is a key aspect of Asset Management. For example, retirees or pension administrators typically prefer low-risk investments to protect their income. In contrast, younger or more aggressive investors might opt for high-risk opportunities that could offer higher returns. Most people fall somewhere in between, and it's the asset manager's job to identify each client's goal.

Just like The Simpsons somehow predict the future with uncanny accuracy, asset managers aim to make smart predictions, too, but with data. They rely on detailed research and analysis to make better investment choices. They examine market trends, evaluate financial reports, and conduct thorough assessments to select suitable investments such as stocks, bonds, real estate, commodities, alternative investments, or mutual funds.

However, research alone is not enough. Performance metrics show whether they are making the correct decision.

So, let’s understand the 7 metrics that show the whole story. Dive in!
 

7 Key Performance Metrics To Track In Asset Management

Here are the key performance metrics to help you manage your assets effectively. Unlike Homer, we believe in tracking the important stuff rather than being ignorant and hoping for the best. (Sorry, Homer!)

For entertainment purposes, we’ll use Homer Simpson’s iconic pink sedan as our “asset,” and follow along as Homer learns how to manage his car like a pro. Shall we?
 

• Mean Time Between Failures (MTBF)

  MTBF is a key Asset Management performance metric. It tells you how long an asset runs before it breaks down. The higher the MTBF, the better. By tracking it, you can plan preventive maintenance before the next breakdown and save time and money.
  
  Formula:
  
  MTBF = (Total run time – Unplanned downtime) / Number of breakdowns
  
  However, before we bring Homer and his car into the mix, we need you to open your math notebooks. #ClassroomFlashback
   

  Source

  If a car runs 10,000 km in a year and breaks down twice, once for 3 days and once for 2 days, MTBF = (365 – 5) days / 2 = 180 days
  
  This means the car runs about 180 days between issues, so checkups twice a year can help avoid future breakdowns.

• Mean Time To Repair (MTTR)

  MTTR is a key metric in Asset Management and on the other side of MTBF. While MTBF shows how often things break down, MTTR measures how quickly they’re fixed. It tells you the average time your team takes to repair an asset after it fails.
  
  Formula:
  
  MTTR = Total repair time / Number of breakdowns
  
  Example:
  
  If a car breaks down twice, once for 3 hours and once for 4 hours. That is 7 hours of total repair time. MTTR = 7 / 2 = 3.5 hours
  
  This means it takes about 3.5 hours to get the car running again. It’s also a great way to compare technician performance. For example, if two technicians work on similar car breakdowns but have different repair times, MTTR highlights who’s more efficient. This metric is essential when planning downtime for preventive maintenance or assessing staff efficiency.

• Overall Equipment Effectiveness (OEE)

  OEE tells you how well an asset is performing. It looks at availability, performance, and quality. A perfect score is 1, while a broken or non-functional machine scores 0. Basically, asking a question—is it doing the job it is supposed to do overall?
  
  Formula:
  
  OEE = Availability × Performance × Quality
  
  Example:
  
  A car was supposed to be used for 10 hours but was only driven for 7. Availability = 7/10 = 0.7
  
  It should cover 60 miles/h but averaged 54 miles/h. Performance = 54/60 = 0.9
  
  Out of 100 deliveries, 95 were completed without issues. Quality = 95/100 = 0.95
  
  OEE = 0.7 × 0.9 × 0.95 = 0.598
  
  This means the car operated at about 60% effectiveness. Now, you can make a decision—whether it needs maintenance or if it’s time to say goodbye.

• Cost Of Asset Maintenance

  The cost of asset maintenance can be tracked in different ways, and it involves different analysis strategies as well.
  
  One smart way to use it is by comparing planned and unplanned maintenance. If you spend a lot on regular servicing but still experience expensive breakdowns, your preventive maintenance is not working effectively.
  
  Another method is calculating cost variance, calculating the difference between the budget allocated to a project and the actual maintenance cost.
  
  Formula:
  
  Cost Variance = Expected Cost – Actual Cost
  
  Example:
  
  You budget $300 for car servicing, but it only costs $250. Cost variance = $300 – $250 = $50
  
  That $50 can go toward future repairs. Cost variances can often be negative, meaning the actual maintenance cost often exceeds the expected cost. Savings from such positive cost variances can help you offset negative cost variances and keep your budget balanced.

• Cost To Replace Vs. Cost To Repair

  This metric helps you decide whether to keep maintaining your old asset or replace it with a new one because planned or unplanned maintenance can become expensive silently. There is no denying how expensive a replacement can be. However, it’s always wise to swallow a tough pill and replace underperforming assets.
  
  Formula:
  
  Repair cost = Annual maintenance cost of the current asset
  
  Replacement cost = (Cost of replacement/ lifespan in years) + expected yearly maintenance
  
  Example:
  
  Your old asset costs $200/year to repair. Repair cost = $200/year.
  
  A new one costs $2,000, lasts 15 years, and needs $50/year to maintain. Replacement cost = ($2,000 / 15) + $50= $183.33/year
  
  Since the annual cost to replace, $183.33, is less than the annual cost to repair, $200, it makes sense to replace the asset rather than investing more in the existing one. This helps in making smarter, cost-saving decisions.
  
  Meanwhile, our Homer Simpsons be like:
   

  Source

• Unplanned Maintenance Percentage

  This metric tells you how much of your maintenance is unexpected, such as sudden breakdowns. Even with great planning, surprises happen. Ideally, only 10–20% of your maintenance should be unplanned; the rest should be routine.
  
  Formula:
  
  Unplanned Maintenance% = (Unplanned hours / Total maintenance hours) × 100
  
  Example:
  
  If your car needed 17 hours of maintenance this year, and 3 of those were due to a breakdown, Unplanned Maintenance% = (3 / 17) × 100 = 18%
  
  That’s within the healthy range!
  
  However, if the metric is higher, it’s a sign your preventive maintenance plan needs work. Use MTBF to predict breakdowns better and schedule timely checkups, keeping your maintenance strategy efficient and breakdowns under control.

• Work Order Resolution Time

  This metric starts when a maintenance request is submitted and stops once the issue is resolved. It helps you understand how efficiently your team handles problems and how complex certain maintenance tasks might be. The shorter the resolution time, the more responsive and effective your maintenance process is.
  
  Reducing this time depends on many factors, including the metrics we’ve already covered. A strong preventive maintenance strategy reduces last-minute breakdowns, which means fewer incoming work orders and less backlog. That gives your team more time to focus and resolve issues faster.
  
  To improve this metric even further, consider using specialized maintenance software. These tools can organize, track, and prioritize requests, helping technicians spend less time coordinating and more time solving problems in the field.
  
  Tracking these Asset Management metrics can help you understand performance, reduce unexpected breakdowns, plan preventive maintenance, and control costs. With the right data, you can make smarter decisions that extend asset life and improve overall operational efficiency.
  
  On that note, let’s conclude this article!

 

Final Words

As they say, “You can't manage what you don't measure.” This strikes true for efficient and reliable Asset Management operations. When you track the right metrics, you gain the power to make better and more proactive decisions.

Metrics like MTBF, MTTR, and OEE bring clarity to complexity, allowing asset managers to reduce downtime, optimize performance, and extend asset life. So, don’t wait for things to break down; track, measure, and take charge.

Ask yourself—are you measuring your assets’ performances to the best of your ability?