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It may seem absurd to question whether EAM Software satisfies the requirements of an asset management system. However, organizations seeking an EAM solution should be wary of systems marketed as such, as many are simply limited CMMS programs. These systems may not offer the comprehensive asset management capabilities required, leading to frustration and inefficiency. 

Enterprise Asset Management (EAM) implies that it should manage assets effectively. Yet, many asset management solutions, regardless of whether they are enterprise-grade or not, are simply extensions of computerized maintenance management systems (CMMS). As a result, when individuals seek an EAM solution through an RFP, they are often searching for a glorified CMMS rather than a true asset management system.  

This blog will explore the market’s perception of EAM solutions, and discuss the key features of an Asset Management System, focussing on its software functionality. 

So, what is considered to be an enterprise asset management solution? 

Gartner conventionally defines EAM as “primarily a transactional workflow system designed for the purposes of managing capital asset maintenance by managing asset data and work processes.”  

It’s clear that maintenance is the top priority in this context. It’s worth noting that a “computerized maintenance management system (CMMS)” is sometimes used interchangeably with EAM.In the market, the majority of RFPs adhere to this definition, with the main functional focus usually revolving around five specific requirements, which are:  

  1. The Asset Register – the hierarchy and which attribute fields are supported. 
  1. Work Management – from reactive work requests through to preventive maintenance and condition-based maintenance. 
  1. Spare Parts Management – often with optimization requirements and procurement processes (the latter sometimes extending to contractor hire). 
  1. Labor skills and labor management – which typically revolve around scheduling the right person to the right job at the right time. 
  1. Reporting and analytics – often highly prescriptive. 

The sole purpose of this listing is to optimize maintenance processes. Often these processes are composed of safety management, permit-to-work, incident management, and integration with financial and Enterprise Resource Management (ERP) systems. The main focus is on procurement or supply chain management. While the justification for using the term “Enterprise” is strengthened by its capability to offer support for diverse locations, languages, and currencies. 

These processes are what I would term tactical. Putting the nuts and bolts in place to manage day-to-day activities reactively and proactively – to generate a work order and ensure you have the right person at the right place and time.  

What then is an asset management system? 

The term “asset management system” evolved in the mid-1990s from the British Asset Management Standard PAS55, which defined asset management as “the systematic and coordinated practices through which an organization optimally and sustainably manages its assets and asset systems, their associated performance, risks and expenditures over their life cycles to achieve its organizational strategic plan.” 

PAS55 formed the backbone of ISO55000, which was released in 2014 and defines the concept of an asset management system as: “… a structured approach for the development, coordination and control of activities undertaken on assets by the organization over different life cycle stages, and for aligning these activities with its organizational objectives.” Please note that while both standards explicitly exclude software, I strongly believe that software should be provided with the necessary resources to efficiently handle and fulfil the requirements of both standards in a well-structured manner..  

Interestingly, around fifteen years ago, I met a consultant from one of the large consulting houses at an asset management conference who introduced me to the term “lust-to-dust cycle .” It’s a term that has stuck with me over the years. After ISO55000 was released, the clarity of that expression and it’s underlying concepts of the standard were obvious. 

In this context, the term “lust” means that an asset has an a priori existence well before we procure it. When we lust for something, we desire it.  

The traditional approach has been to assemble a business case, get it approved, purchase it, and implement it. ISO55000+ on the other hand, forces us to look at things more strategically, we need to establish whether it will meet our business’s objectives, what the business risk of having it versus the risk of not having it, what is the value of it compared with the other things the business could buy with the same money and so forth. If we look at this from a short-term perspective, the business case prevails. However, if we look at the competitive capital needs of a business over its investment horizon, the question is whether procuring it makes strategic sense.  

Once the asset is owned, it needs to be managed resiliently. However, questions now concern an asset’s operating context. For example, does the asset’s purpose remain important to our strategic objectives? What is the likelihood and consequences of its failure? Should we run it to failure, or should we be pre-emptive in our maintenance – and if the latter, using what techniques?  

To fully answer these questions, we must take a more scientific approach requiring data and context. Contextualized operational data should form the basis of answering how to manage the asset during its operational life – and it is here that machine learning and its twin, artificial intelligence, will become increasingly important. 

What then are the components of a holistic EAM solution that contributes to business performance? 

As discussed above, there are three distinct areas that software needs to address in helping form an asset management system. The market recognizes them, rightly or wrongly, as Asset Investment Planning (AIP) – the strategic component, Enterprise Asset Management (EAM) – the tactical component, and Asset Performance Management (APM) – the operational monitoring component.  

While most Enterprise Asset Management Vendors have not moved beyond the glorified CMMS stage, a handful have recognized the need to encompass a broader range of functionality to have the right to use the moniker EAM. We see this today in evolving market reviews in the analyst communities.  

The EAM solution provides a much-needed foundation for asset context that goes beyond most hierarchies. APM solutions in the market today are greatly varied in their definition of operational data – to the point that we are seeing advanced EAM solutions providing the context to data-heavy operational asset behavior in terms of Reliability Centered Maintenance and ISO31000 style risk analysis.  

These more advanced EAM solutions are consolidating risk data, collating cost data, providing in-depth historical-based tactical decisions that are informed by the flow of operational data and assessing such complex problems as estimated remaining life. These key data points are fundamental to driving strategic analysis for capital and operational expenditure in the long term. While business strategy and value outcomes should drive investment and planning decisions, EAM will inform and testify to the ultimate quality of those decisions. 

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