What is asset performance management? A complete guide

Network equipment failures during off-peak hours often go undetected until users report service disruptions. This delayed detection triggers service level agreement (SLA) penalties, compromises system logs, and creates compliance risks, highlighting the need for robust SLA policies.

Such incidents illustrate the operational challenges faced by organizations lacking centralized infrastructure monitoring, real-time visibility, and proactive alerting capabilities.

For organizations reliant on IT infrastructure management and connected systems, delayed detection equals damage. You don’t need more alerts, but intelligent, connected insight that senses stress before it becomes failure. This is how Asset Performance Management (APM) functions. It ensures continuous awareness, faster response, and fewer blind spots across your critical systems.

What is Asset Performance Management (APM)?

Asset performance management is a structured, data-driven approach aimed at enhancing the reliability, availability, and efficiency of assets. It combines predictive analytics, asset health monitoring, and risk-based strategies to maximize return on assets while minimizing unplanned downtime.

APM is built around four guiding objectives:

• Reliability: Ensures assets operate as expected with minimal failures

• Availability: Increases asset uptime by anticipating and addressing risks

• Cost optimization: Reduces maintenance and lifecycle costs without compromising safety

• Risk management: Identifies and mitigates operational, compliance, and safety risks

Key components of asset performance management systems

The key components of asset performance management systems work together to enhance asset reliability and optimize performance. Here are the core components that define an effective asset performance management system:

1. Asset health monitoring

Sensors, IoT devices, and control systems continuously collect data on factors such as temperature, vibration, pressure, and energy use. This live feed helps track normal equipment behavior; thus, any unusual changes can be detected early, before they cause more significant problems.

2. Predictive and prescriptive analytics

Predictive analytics examines past and current data to forecast when an asset is likely to fail. Prescriptive analytics takes it further by suggesting the best action to take—balancing cost, timing, and risk. Together, they help teams move from reactive fixes to smart, preventive decisions.

3. Risk management and criticality analysis

Asset performance management systems help identify which assets are most critical to safety, production, and cost. This allows teams to focus their time and resources where they’ll have the biggest impact.

4. Reliability-centred Maintenance (RCM)

Using RCM principles, asset performance management software recommends the optimal maintenance approach for each asset, whether scheduled, predictive, or run-to-failure, until the asset is replaced or retired. These choices are based on how the asset functions, its potential failure points, and the associated maintenance costs.

5. Integration with IT/OT systems

An effective asset performance management system connects with existing tools such as Enterprise Asset Management (EAM), Computerized Maintenance Management System (CMMS), Enterprise Resource Planning (ERP), and IoT platforms. This creates a shared, accurate view of asset data across teams and departments, helping everyone make better, faster decisions.

6. Performance benchmarking and KPIs

Dashboards and reports track key performance indicators, such as Mean Time Between Failures (MTBF), Mean Time to Repair (MTTR), Overall Equipment Effectiveness (OEE), and Total Cost of Ownership (TCO). These metrics help organizations measure their performance and identify areas for improvement in asset performance.

7. Workflow automation and collaboration

Modern asset performance management platforms such as Freshservice include AI-powered workflow automation for tasks such as maintenance scheduling, part ordering, and compliance tracking. Its collaboration features connect teams across operations, engineering, and finance to ensure that everyone is working toward the same goals.

6 benefits of asset performance management

Asset performance management offers a strategic approach to maximizing the efficiency, reliability, and longevity of your assets, driving better outcomes across operations. The following are the key benefits of asset performance management:

1. Enhanced reliability and uptime: Continuous monitoring detects early warning signs (e.g., abnormal vibrations, temperature spikes) so issues are addressed before failure, thus reducing outages and improving customer trust.

2. Lower maintenance costs: Predictive and condition-based strategies help avoid unnecessary servicing and emergency repairs, reduce labor costs, and extend the lifespan of components.

3. Improved safety and compliance: Real-time monitoring, automated audit trails, and compliance alerts reduce safety risks, regulatory exposure, and ensure accountability.

4. Smarter decision-making: Comprehensive asset health and lifecycle data enable smarter decisions on repairs, upgrades, or replacements, thus maximizing ROI and supporting more effective capital planning.

5. Extended asset lifespan: Early interventions minimize stress and delay asset deterioration, deferring costly replacements and maximizing asset value.

6. Operational efficiency and ROI: Optimized workflows, resource usage, and scheduling increase asset utilization, reduce breakdowns, and deliver stronger returns.

APM vs. related practices

While asset performance management often overlaps with other asset-related systems, it is not interchangeable with enterprise asset management or computerized maintenance management systems.

Understanding these differences helps organizations design a complementary ecosystem rather than treating them as competing solutions.

APM vs. Enterprise Asset Management (EAM)

Enterprise asset management is a broad discipline encompassing the end-to-end lifecycle of assets from acquisition and operation to retirement. It focuses on inventory, procurement, work orders, and compliance tracking.

On the other hand, APM is narrowly focused on optimizing the performance and reliability of existing assets.

Here’s a quick overview of the difference between EAM and APM:

APM vs. Computerized Maintenance Management Systems (CMMS)

CMMS tools primarily manage maintenance tasks. They provide scheduling, work order management, spare parts tracking, and technician assignments.

APM elevates this by focusing on why maintenance should be performed and when. It uses condition monitoring, predictive analytics, and prescriptive insights to recommend optimal interventions.

APM complements CMMS by providing smarter, data-driven instructions, making maintenance not only efficient but also strategically aligned with business outcomes.

APM vs. CMMS

Key practices and KPIs for building an APM strategy

Building an effective Asset Performance Management (APM) strategy requires key practices and KPIs that drive performance, optimize reliability, and ensure long-term asset value.

Here are the five key practices that help build a strong APM strategy:

• Defining asset criticality: Prioritize assets based on their impact on safety, compliance, IT service delivery, and business outcomes.

• Adopting predictive and prescriptive maintenance: Replace fixed schedules with analytics-driven insights to anticipate failures before they disrupt operations.

• Integrating IT and OT data: Consolidate server uptime, application dependencies, and IoT sensor data into a single source of truth.

• Enabling closed-loop decision-making: Connect APM insights to workflows such as ticketing, work orders, and change management so corrective actions trigger automatically.

• Fostering a reliability-first culture: Train and incentivize teams to act on APM insights, ensuring adoption beyond just technology.

Once you have adopted the key practices given above, track the following core KPIs for asset performance analysis:

A strong APM strategy embeds these practices and KPIs into daily operations, ensuring assets are not only maintained but also aligned with long-term business objectives.

Step-by-step asset performance management process

Asset performance management is not a one-off initiative but a continuous cycle of discovery, monitoring, analysis, and optimization.

Below is a structured walkthrough of the APM process, adapted to the realities of IT asset environments.

1. Discovery and development of a trusted inventory

The starting point of any APM program is a complete and accurate view of the asset estate. This means establishing a single, dynamic source of truth that captures every asset in the organization.

In IT, this inventory must encompass hardware, including servers, laptops, network devices, and mobile endpoints; software licenses and cloud subscriptions; and digital assets, such as APIs, IoT devices, and virtual machines.

Freshservice offers automated infrastructure discovery tools that combine agent-based and agentless methods, ensuring that both on-premise and cloud assets are continuously identified and catalogued.

The resulting Configuration Management Database (CMDB) provides not just a list of assets but also their relationships and dependencies, giving operations managers and IT teams the foundation to manage performance at scale.

2. Data collection and continuous monitoring

Once the asset inventory is established, the next step is continuous monitoring. Unlike static inventories, continuous monitoring provides real-time visibility into asset health and usage.

APM systems consolidate data from monitoring tools into a single view. For example, Freshservice can route third-party alerts directly into its service desk, linking them to the relevant asset in the CMDB, ensuring issues are prioritized based on the services they impact and resolved more efficiently.

3. Risk and criticality assessment

Since all assets do not carry the same weight, APM requires organizations to classify assets based on their criticality, likelihood of failure, and associated risks. Freshservice’s CMDB enables this prioritization by mapping assets to the services they support and highlighting their dependencies.

For example, any alerts related to that server can be automatically escalated as high priority if a database server underpins a customer-facing application with strict SLA commitments. This structured approach ensures resources are focused where they matter most, preventing teams from spending equal time on assets of vastly different criticality.

4. Predictive and preventive analysis

The real value of APM lies in shifting from reactive or scheduled maintenance to predictive and prescriptive practices. Organizations can anticipate failures and take action just before they occur by analyzing historical trends and real-time telemetry, thereby reducing disruption and unnecessary interventions.

Preventive analysis further ensures patches and updates are applied proactively, lowering both performance and security risks.

5. Optimization and continuous improvement

The final stage of APM focuses on learning from outcomes and driving continuous improvement. Organizations track metrics such as MTBF, MTTR, downtime costs, and asset utilization to decide whether to repair, upgrade, reallocate, or retire assets.

Integrating IT asset management with APM

ITAM defines what assets exist and their financial details, while APM focuses on monitoring their performance and optimizing operational efficiency. Unifying both on a single source of truth delivers full visibility, cost control, and operational resilience.

ITAM’s inventory and compliance data paired with APM’s health and performance metrics break down silos, align risk management, and enable predictive capacity planning, cloud optimization, and asset lifecycle forecasting. Together, they shift asset management from a reactive cost center to a proactive strategic enabler.

ITAM ensures compliance, governance, and financial accountability, while APM ensures performance, availability, and resilience. Together, they deliver a full-spectrum view of asset value—financial, operational, and strategic.

Challenges in implementing APM

While Asset Performance Management (APM) delivers measurable value, organizations often face significant hurdles when rolling it out. These include:

• Data fragmentation: Asset data is often scattered across ERP systems, CMMS platforms, IoT dashboards, and IT management tools. Without a unified, standardized source of truth, APM insights remain incomplete and unreliable.

• Integration complexity: APM requires bringing together IT, OT, and cloud environments. Legacy infrastructure, inconsistent data models, and incompatible protocols make integration far more challenging than expected, often slowing adoption.

• Change resistance: Shifting from reactive maintenance to predictive, data-driven decision-making demands cultural change. Field engineers may trust their experience over algorithms, IT admins may resist new workflows, and leadership may hesitate to disrupt “stable” processes.

• Cost and ROI concerns: Deploying sensors, analytics platforms, and cloud integrations involves an initial investment that only justifies itself if early ROI is demonstrated through reduced downtime or cost optimization.

• Skills gap: Running APM effectively requires cross-functional expertise across engineering, IT governance, cybersecurity, and data science. Many teams lack this blend, resulting in execution gaps or a reliance on external consultants.

• Cybersecurity risks: Integrating operational assets with IT networks increases the attack surface. Without strong access controls, encryption, and monitoring, APM systems themselves can become vulnerable to cyber threats.

Emerging trends in asset performance management

APM is moving from reactive maintenance to predictive, proactive, and autonomous strategies that maximize value, reduce risk, and support sustainable growth. Shaped by AI, sustainability, and Industry 4.0, it is evolving with the adoption of machine learning, digital twins, and edge computing.

Machine learning enables early anomaly detection and accurate failure forecasting, while digital twins provide real-time replicas of assets to simulate performance, optimize maintenance, and improve planning. Edge computing brings analysis closer to assets, supporting faster, more autonomous decision-making.

APM is also shifting toward self-healing systems that can diagnose and resolve issues without human intervention, while sustainability is becoming increasingly central as organizations utilize APM to reduce energy consumption, minimize emissions, and optimize resource utilization.

Augmented reality is revolutionizing maintenance by providing real-time, contextual guidance on equipment. At the same time, blockchain is enhancing the security and transparency of asset records, and cloud-native platforms are enabling greater scalability and collaboration.

As connectivity grows, cybersecurity is increasingly becoming integral to APM, and its convergence with Industry 4.0 and 5.0 is creating more intelligent, resilient, and human-centric systems.

How Freshservice enhances IT asset performance management

Freshservice provides a modern IT Service Management (ITSM) platform with built-in APM capabilities tailored for digital and IT infrastructure. Its strength lies in making performance management actionable for IT teams without heavy customization.

• Unified asset visibility: Centralizes hardware, software asset, and cloud asset inventories in one place, eliminating data silos.

• AI-powered analytics: Uses AI/ML to detect anomalies, highlight underutilized assets, and predict performance risks.

• Automated and customizable workflows: Integrates APM insights directly with incident management, change management, and problem management. Build no-code, rule-based workflows for ensuring faster resolution.

• Cost optimization: Tracks usage patterns to reduce software licence waste, cloud sprawl, and unnecessary asset overheads.

• Compliance and security alignment: Helps ensure IT assets adhere to regulatory, contractual, and cybersecurity requirements.

• Seamless integrations: Works alongside existing CMMS, monitoring tools, and ERP platforms, enabling seamless APM adoption.