The trouble with asset accounting inaccuracy during disaster recovery.

Growing risk awareness and recent natural disasters, such as Hurricane Katrina, have prompted an increasing number of companies to invest in disaster recovery (DR) as part of a business continuity program – but not all have followed suit. Given the growing acceptance that business continuity is an essential component of 21st century business, why are so many companies willing to compromise that investment from day one by failing to retain control over essential asset information?

Disturbingly, the majority of companies believe the asset register is, at worst, 5% inaccurate – and are therefore shocked when the results of a complete physical audit show it’s actually much worse. Discovering the true level of asset inaccuracy during a disaster recovery situation can create significant business problems. Any inconsistency in the asset register or inability to reconcile the asset value in finance with multiple inventory records will raise significant doubt for insurance companies, delaying payment at best. At worst, an organization could lose any chance of insurance payment and even face charges of claiming for items that do not exist.

Fixed asset management is a fundamental business process. It determines corporate value and has a direct impact on profitability. Yet, if forced to provide proof tomorrow, how many multi-national organizations could be confident in the value of their corporate assets?