26th November, 2019: Australian businesses with more than 20 employees are losing assets worth as much as $4.3bn every year across nine categories measured, according to new Telsyte research commissioned by Telstra.
Telstra Global IoT Solutions Executive, Gerhard Loots said companies are regularly losing high value assets – and the research revealed that once lost, those items are often lost for good. That has a huge impact on business, not only costing organisations financially, but also impacting their digital transformation and customer relationships.
“We’ve uncovered an epidemic of lost assets in Australian companies,” Mr. Loots said. “From small items like keys and briefcases, to large valuables like trailers, shipping containers, medical and lab equipment or IT hardware; organisations are losing an average of six per cent of all assets every year.
“We also found nearly half (48%) of respondents say that it is embarrassing to report lost assets to their organisations. That makes sense as a similar number (47%) said losing company assets negatively affects their relationships with clients.”
With two thirds of Australian businesses currently transforming digitally – a number that will only keep growing – asset tracking is central to this effort.
The financial impact of lost assets is particularly relevant to Australian businesses given cost reduction is the number one priority (47%) of organisations in their digital transformations.
86 per cent of companies view asset tracking technology as a strategic part of their digital transformation effort, likely because of its ability to mitigate the enormous losses companies are experiencing today.
In fact, more than half of Australian organisations (52%) say losing assets ultimately costs above and beyond the financial impact of their replacement, highlighting the enormous economical gains if this challenge is solved.
Foad Fadaghi, Managing Director at Telsyte, said, “Asset tracking is a strategic part of many organisations’ digital transformation strategies and is both about mitigating loss but also about creating a culture of responsibility with the use of technology.”
The research also revealed:
- The main reason businesses lose assets is because they are misplaced by employees (46%) or assets aren’t properly stocked (36%). Employee theft remains an issue 29% of the time, while 27% of assets are lost in transit
- Half (50%) of companies rely on manually logging records, while more than a third simply walk around the premises to find assets when they’re needed
- While the vast majority (82%) of companies that have lost those assets try to recover them, their searches are only successful less than a quarter of the time (22%).
As Australia’s biggest private rail freight operator, supported by a large road fleet, SCT Logistics faced an average annual asset loss rate of three per cent, which presented a $4 million cost to the business each year. SCT Logistics is now rolling out Telstra’s Track and Monitor solution to 1,500 trailers, containers and rail wagons in its fleet to help solve this problem.
“Not only is this allowing SCT Logistics to understand more about its assets and increase utilisation, they expect the technology investment to be offset by cost savings in as little as three years,” said Mr Loots.
“And the research suggests its annual rate of loss is only half of the national average, so there are huge gains to be made by organisations using a form of asset-tracking technology.”
Telstra’s Track and Monitor solution empowers businesses to track assets of different sizes and values with enterprise-grade Internet of Things devices and functionality, including Cat-M1/LTE-M, GPS and Bluetooth. Those solutions are supported by Telstra’s leading Australian mobile network.
Australian organisations curious to understand what lost assets are costing their business can use the Asset Tracking Calculator.
The research, conducted by Telsyte in October and November 2019, surveyed decision-makers in 470 businesses with greater than 20 employees across Australia. Telsyte estimates of physical asset losses measured 9 common asset categories that do not have built-in tracking technologies. For more details please visit the Telstra Track and Monitor website.