Asset Management as a discipline is as old as the hills facing this “fleet” and their horse-back managers. Traditionally asset management has had two points of view – that of the user/operators of the assets and that of the investor/owners of the assets. The former focuses on the physical asset itself and the latter views the investment contract as the asset. The two views govern and influence the behavior of the two parties. These distinct views have traditionally been separated, but also connected and collaborative via the physical asset.

Consider our cowboy friends above. Let’s call them Walt and Bud and their employers, the owners of the herd, Frank and Mary of Range Cattle Financing (RCF). The ear tags in the picture tell us that this is a contemporary scene, which we will discuss further below, but let’s time-transfer Walt, Bud, Frank, and Mary back to the mid 1800’s to look at how asset management has changed from then to now due to technology.

Clearly the cows in this example are the physical assets. Walt and Bud’s job as the user/operator asset managers of the herd (fleet) have three responsibilities:

  • Keep Tom and Mary’s cows (assets) fed, safe, and healthy.
  • Drive (transport) the assets from the point-of-purchase to the point-of-use (sale).
  • Deliver the assets at the predetermined time and condition (number and weight) Tom and Mary expect.

When Walt and Bud accomplish these three things, they get paid. These responsibilities are basically the same for user/operator managers of any asset today – take good care of the asset, use the asset as directed by ownership to deliver value, and deliver the asset in good condition at the designated time and place of the contract. Tom and Mary, as owner/investors of the herd, focus on three simple questions:

  • How much did we pay for the cows?
  • How much will it cost to have Walt and Bud manage the herd and drive it to market?
  • How much will a buyer pay for the cows when they get there?

Again, these questions are fundamentally the same for owner/investors today: How much did we pay for the assets? How much will it cost to get value from the assets? How much will we be paid when we dispose of the assets? The questions are timeless because they define the basic profit and loss for the investment. RCF pays Walt and Bud to help answer these questions and deliver on the canonical objective of investment asset management:

The goal of asset management is to maximize the value of an investment portfolio over time while maintaining an acceptable level of risk. - Investopedia

Replace “cows” with “skid-loaders” or “box trucks” and the story above applies as well today for equipment finance as they did for cattle ranching 150 years ago. What has changed is how the activities are carried out and how the questions are answered. Dr. Timothy Chou best described the change in his book of the same name - Precision. Chou defined precision as a business framework implemented in a modern ecosystem of connected technology and software: Things|Connect|Collect|Learn|Do. This framework enables new levels of precision in every operating process and in so doing changes the business models in which the activities are pursued.

Precision obviously brings new methods of physical asset management that when practiced well delivers better results for user/operators. But precision changes the business model of investor asset management by aligning their objectives with the user/operators into a single purpose – the most efficient and effective use of an asset to create value during its useful life. With precision the asset management practices of investors must become common to and collaborative with those of the user/operators to produce significantly better outcomes.

Modern methods

To understand this change, let’s advance the RCF cow herd to present day and see how precision technologies have created a new asset management methodology for the cattle that aligns users/managers and investors.

Individual IDs optimize fleet performance

The first big change in how Walt and Bud manage the herd today is unique individual identifiers. In the 1850’s they had brands that simply told them which cows belonged to which herd. They couldn’t identify or manage the cows as individual assets other than visually and then they probably didn’t know which cow they were shooing. The only way they could find, treat, and feed an individual animal was through direct inspection relying on their own visual identifiers, firsthand experiences, and the appearance of each animal.


Today each animal has a unique RFID identifier. The ear tag is the Vehicle Identification Number (VIN) of the cow that has several advantages for Walt and Bud. The tags can be read remotely so they identify the animal from a distance or when the animal passes a reader at a given location, i.e., the hospital pen or food bin. The ID number follows a global standard that is recognized by every organization and system in the industry – governments, feed yards, genetic databases, and processing plants. As such, the unique identifiers enable a comprehensive view of the asset throughout its life for Walt and Bud, Frank and Mary, and any other organization with proper access. Unique identifiers enable connected, cloud-based systems and provide information access for all interested parties, i.e., precision.

The lesson for equipment finance asset managers is don’t underestimate the importance of unique identifiers throughout the life of both the physical and contractual assets – from manufacturing to origination through final disposition. Make sure the identifiers work across systems and across time stages. All data generated by and related to a given asset must follow that asset in the digital world via its unique identifier. In order to leverage and capture the value of this data all systems must be cloud connected.

Self-aware assets align and synchronize efforts

The next step is asset awareness. Each asset knows and can communicate Who am I, Where am I, What am I, and How do I feel. Individual precision enables Walt and Bud to leverage the full suite of modern sensing, control, and communication technologies to help manage their cows. The RFID tags can have built-in sensors themselves or connect to sensors that essentially make the asset fully aware of and able to communicate its condition. Body temperature, feeding patterns, hospital visits, medications, diagnoses, and real time location for each cow are now available to Walt and Bud either directly from the RFID tag or from the interconnected cloud databases using the unique identifier for that individual.

The combination of unique identifiers, sensors, and cloud communication has created a precision that revolutionizes asset management for the cowboys. Now they can manage each individual in the herd. Think of how expensive and inefficient treating an entire herd with the same antibiotic dose is when only a few animals are in need. Imagine the frustration of using the same feed program across the herd and then finding out that some animals have overgrown while others are not yet ready for market at the specified date. The herd represents the investment of business, the book of business, but the herd is now managed to better outcomes when asset managers use individual-level precision.

Cattle Technology

At this point one may have surmised that Walt and Bud’s jobs have changed dramatically. As asset managers they have moved from horseback to desk chair. They no longer need to be next to the cows, they need access to screens and networks. The herd is managed via software systems that alert them when action is required. It is no longer necessary to call or visit Frank and Mary to provide updates on the status of their investment.

This change is not surprising because the technological changes described above have been driven by cattle owners and investors, not operators. Frank and Mary want the same access as Walt and Bud and add other data like medical cost forecasts, market futures, and buyer communities to help them make their asset management decisions.

The lesson for equipment finance is that owner/investment asset managers should be driving the use of precision. Yes “digital awareness and presence” of the equipment enables better and faster decisions by operators, but the big winners are the investors. Most equipment today has been made aware of its own state and is connected to the cloud via wireless networks. Everything from yellow iron to long-haul trucks and medical diagnostic to restaurant equipment now leaves the factory with IoT capabilities. If the equipment is not connected, aftermarket device trackers, complete with cloud integration and APIs, are available to help monitor equipment use, conditions, maintenance, and location.

This is the point where investors can engage user/operators in managing assets. The distinction between physical and contractual assets no longer exists because a modern physical asset has a full virtual representation in the cloud, digital twin, which can even include the details of its investment contract. Precision enables operators and investors to simultaneously monitor and maximize the revenue production of the asset – both real-time and full life cycle. Users and managers focus on operating revenue to pay the bills while investors are interested in the accumulated value over the life of the asset. Indeed, this technology alignment is one of the reasons why captive financers like Caterpillar, John Deere, and Volvo use financing to “sell” equipment and as a result occupy three of the top five Monitor 100 spots every year.

AI prediction elevates asset productivity

At this point Walt, Bud, Frank, and Mary are awash in data from their herd. Location, food, water, medications, heart beats, respiratory counts, body temperatures, weight, hip-height, and shoulder-width all measured over time. This is the data that advances the discipline of asset management to the next level. The collection of operating parameters and outcomes along with financial performance over time across multiple herds enables machine learning models and AI prediction machines to forecast problems and opportunities. The impact of disease is more effectively treated and even prevented with early diagnosis. Feed programs can be tailored by groups or even individuals for optimum days-on-feed performance. Prediction enables Walt and Bud to manage more cows and gives 1st Diamond’s investors the ability to buy and sell at the optimal time with optimum returns. Precision optimizes the productivity of both Walt and Bud as herd managers and Frank and Mary as owners/investors.

Precision from data gathered from equipment during operations can be used in the same way to better manage uptime and application performance. When combined with historical recordings of outcomes, e.g., maintenance and through put, one can even predict the need for maintenance before breakdown. Uptime is improved thereby increasing revenue for the users and decreasing payment risk for the financiers. The modern asset management technology and methods serve user/operators and investors simultaneously and equally well.

The same but new

The fundamentals of asset management have not changed much since the time when asset managers road on horseback, but precision from technology has brought new methods that rationalize and synchronize the management efforts of users and investors making them colleagues in the pursuit of equipment efficiency and efficacy. A narrow focus on either the assets themselves or their finance contracts can miss the opportunity to use precision to maximize productivity. Data has become the common language of all asset managers and precision is the key to competitive advantage.

Written by

Scott Nelson

President & Chief Digital Officer, Board Member

Scott Nelson is the president and chief digital officer of Tamarack Technology. He is an expert in technology strategy and development including AI and automation as well as an industry expert in equipment finance. Nelson leads the company’s efforts to expand its impact on the industry through innovation using new technologies and digital transformation strategies. In his dual role at Tamarack, Nelson is responsible for the company’s vision and strategic planning as well as business operations across professional services and Tamarack’s suite of AI products. He has more than 30 years of strategic technology development, deployment and design thinking experience working with both entrepreneurs and Fortune 500 companies.




Tim Appleget

Director of SaaS Products

Timothy Appleget is director of SaaS products at Tamarack Technology. In his role, he is responsible for the development and implementation of Tamarack’s technology services offerings around data, IoT and workflow automation. He joined Tamarack in March 2021 after more than two decades in equipment finance with Wells Fargo. He has a deep understanding of enterprise solutions in the industry built on years of experience of leading technology and business operations teams.



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