The Modernization of Enterprise Asset Management

By Joe Weller | October 24, 2016

From times when our ancestors “coaxed” their mules to bring in one more year’s crop to today’s fast changing, data-driven global companies, asset management is a critical component to the health and bottom line of any company. As Enterprise Asset Management (EAM) solutions have improved over time, more and more industries are adopting them to mitigate risks, plan for failures , or avoid unwanted consequences that can severely impact the health of a company. When EAM software is implemented effectively, companies will quickly see the ROI, increase productivity, and eliminate waste. The reports, dashboards, and analytic tools provided by EAM software give companies visibility into the entire asset management cycle. This article will give you a practical view of what EAM is, offer tips for evaluating different systems, and detail the benefits and how different industries are using it today.

What is Enterprise Asset Management?

Enterprise Asset Management (EAM) is the process of designing, acquiring, using, maintaining, and updating company assets across the entire business enterprise. It also provides data and task management for the support, replacement, and disposal of those assets. Capital equipment, infrastructure, and digital media are some of the assets managed across an organization.

Often categorized as data collection, EAM is responsible for much more than simply collecting information. Instituting an effective EAM strategy allows for the optimization of your asset’s entire lifecycle in order to monitor performance and mitigate, balance, and reduce the consequences of risk and cost. The lean practices inherent in modern EAM provides opportunities to cut costs and manage risk while focusing on company goals and profitability.  

In the past, EAM involved laborious hand-written inventories and depended on the intuition of veteran technicians. As technologies evolved, practitioners built in-house systems or purchased an “off-the-shelf” solution that often had limitations in implementation, use, and mobility. There have also been restrictions on what kinds of companies can afford to implement and support intricate and expensive EAM software solutions.

A New Era for EAM Software Development

Limitations are slowly disappearing as systems evolve to provide more cost effective, industry specific solutions, as well as customizable options, cost saving measures, and continuous improvement planning. Industries looking to replace a neutral approach to asset management with a more proactive resource planning strategy can find that the reports, data, and process management capabilities of today’s EAM software address areas of asset optimization, expenditures, predicting failures, extending asset life, and supporting the need for upgrades.

Modern EAM solutions should:

  • Support and enhance the goals of the overall ERP
  • Integrate with supporting departmental systems 
  • Provide reporting for numerous stakeholders, such as IT, Operations, Finance, Quality, and Regulatory
  • Be easy to implement and maintain, nimble, flexible, and customizable within an industry 
  • Enable the management of risk and costs 
  • Support mobile accessibility 
  • Sustain an innovative roadmap dedicated to continuous improvement 
  • Support growth, expansion, acquisition, and mergers

Adaptive and innovative EAM software can effectively address the above and will provide useful and actionable functionality, including: 

  • Asset use/uptime/downtime/repair cycles
  • Work order generation
  • Warranty management
  • Supply chain management
  • Inventory management and purchasing
  • Reliability and risk analytics
  • Power consumption solutions
  • Regulatory and quality compliance
  • Green initiatives and sustainability 
  • Life cycle analytics, reports, and key performance indicators (KPIs)

Benefits of Modern Enterprise Asset Management Solutions

In modern EAM solutions, the reports, supporting dashboards, and analytic tools, along with data input and retrieval are designed for ease of use to provide a view of the entire asset management cycle down to specific issue reports. These functions are constantly being adjusted to provide flexibility through mobile and cloud solutions to support off-site and personnel in the field. Increased productivity, reductions in downtime, the benefits of asset life extension, and reduced costs are all factors that drive the decision to invest in and utilize modern EAM software solutions. 

To date, industries such as airlines, power companies, and manufacturing have embraced the importance of a clear, coordinated, and proactive EAM strategy with supportive solutions. It’s not difficult to see why. These industries provide product directly to the consumer and risk factors when equipment fails or is removed for unscheduled repairs are high. The immediate impact of failure can be felt by the consumer in stark ways, so it is imperative that these industries plan for failures and mitigate them quickly to avoid unwanted consequences. 

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Developing EAM Solutions for New Industries

Today, EAM is expanding into new industries that need to improve margins, cut costs, and mitigate risk as competition becomes more global, the regulatory environment changes, and margins are squeezed For example, public sector industries such as, water, sewer, and public transportation face budget cuts regularly. Regardless of the funding, they are charged with providing the expected service, safety, and product to the public in an almost invisible way. Adopting and deploying effective EAM systems assist in identifying areas of efficiencies to cut costs and manage waste on items such as inventory and power consumption. 

The medical industry is feeling effects of the Affordable Care Act (ACA). Medical industry participants have seen systematic reductions in reimbursements for services, as well as, new regulations and reporting. As their margins are compromised, it becomes necessary to utilize assets in a more robust and efficient way to improve revenue opportunities. EAM vendors are responding to this need and have industry-specific solutions to address these asset management concerns.

Like the medical industry, construction sectors have reasons to seek cost reduction in their operations and adopt modern lean practices. There is also an interest in mobile solutions to support multiple locations as assets move through various job sites. Cost cutting, eliminating waste, and supporting sustainability can aid in the development of competitive bids. But like many industries, the fluid regulatory environment, and increased competition make a flexible, innovative, and nimble EAM an important part of maintaining or developing a competitive advantage.

Providing Data-Driven Enterprise Asset Management Software

Due to the rapidly changing worldwide economy, technology advances, and even cultural changes (buying habits and consumer expectations), solutions are being built for industries that might not have adopted EAM software just five years ago. Industries such as retail, finance, fashion, and hospitality are deriving benefits from implementing the cost cutting, risk-mitigating functionality found in an effective EAM solution. EAM software vendors continue to develop workable, cost-effective, and sustainable industry-specific solutions. 

Now that we’ve identified what an EAM system can do and who can benefit from its implementation, it is important to identify what preparation is needed to effectively integrate EAM software in your organization.
Before onboarding or adapting an EAM solution:

  • Have clear vision and commitment to EAM solutions in the overall ERP
  • Adopt a preventative, proactive (rather than neutral or reactive) approach to strategic management of assets from design, acquisition, maintenance, failure, and disposal
  • Dedicate the human capital needed and provide support 
  • Adopt a continuous improvement and training philosophy for those participating in collecting, analyzing, and implementing data
  • Choose a vendor with industry expertise and a dedicated support team

Modern EAM solutions offer the ease of instant reports, lifecycle forecast functions, engaging in “what if” scenarios, and other important data, but these systems are most effective when included and supported in an overall ERP strategy. When implemented effectively, organizations will experience a quick return on investment realized through increased productivity, limiting waste, and optimizing assets for longevity.

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