Enterprise asset management systems

Citation

(2002), "Enterprise asset management systems", Work Study, Vol. 51 No. 6. https://doi.org/10.1108/ws.2002.07951faf.004

Enterprise asset management systems

Enterprise asset management systems

The current, generally accepted view of Enterprise Asset Management (EAM) is that it refers to the acquisition, tracking, maintenance and disposal of the capital assets of an organisation.

The need for EAM stems from current:

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  poor integration between operational systems and financial management, so that the "performance" of very expensive assets is unknown; and

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  current asset management systems that focus on maintenance execution rather than on the overall return on plant and equipment.

EAM should:

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  extend capital asset life via appropriate preventive and predictive maintenance processes;

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  optimise asset efficiency and inventory levels;

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  improve key supplier and operational collaborative processes.

EAM have been around for some time, but mainly run within outsourcing operations (facilities management (FM)) companies who use them to manage the assets of a number of organisations. Recently, the value of these systems has been clearly demonstrated as they are now used for a range of FM contracts of up to 20 years and for multiple sites.

Generally, EAM has been used for the manufacturing processes of an organisation. The leading EAM solutions are focused on particular vertical industries or enterprise departments. For instance, Mincom is directed toward metals/mining and aerospace, Datastream is for FM, Indus focuses on process manufacturing and energy, and Peregrine/Remedy is for information technology.

Since activity so far can be judged successful, there is likely to be increasing demand for systems that take a holistic view of an organisation's entire portfolio of capital assets. At present, it is not likely that a single solution from a single supplier could encompass management of an entire organisation's assets and processes, but this will change. Either systems will grow to encompass greater breadth or asset management solutions will increasingly interact with one another, like database access and application programming interfaces. Though the use of different, specialised systems for different asset categories is currently recommended, the lowering of the barriers between categories can add additional value. For example, it is useful to apply traditional asset management approaches, such as asset turn velocity, return on assets and incremental asset investment versus incremental profitability, across real estate, human resources and capital-asset categories.

EAM solutions help FM service providers to plan, organise and control operational activities to offer better service (defined in improved service level agreements). They enable the FM operator to look after whole buildings by capturing current information and historical data on individual properties and their maintenance. They schedule the maintenance and repair of buildings and equipment, generate work orders, procure materials, as well as manage assets and inventory. This improved operational management leads to a reduction in costs.

EAM systems significantly improve management information – and resulting decision making. One particular area is in contract management. The more modern (and more advanced) EAM systems can help FM companies manage hundreds of clients at any one time, and cut the overhead of implementing new contracts. They collect in one place all the information that can be related to a particular FM contract, including data on detailed design calculations, construction requirements, maintenance and operating instructions, and failure analysis (based on data acquired from across the range of existing contracts). This pooled information offers benefits to each individual customer of the service.

The more advanced EAM tools on the market provide "what-if" decision-making solutions, giving companies the ability to test potential risk scenarios, determine their impact and take measures to minimise the chances of such crises taking place.

The advanced reporting tools within EAM systems ensure that costs are captured at the order source, assisting monitoring and control of contractor billing. Reports can be generated that estimate costs versus actual spend, profitability comparisons, and cost per contract, allowing FM companies to remove costs from the supply chain, instead of adding to them.

Faster and more efficient procurement is a big issue for large FM organisations. For example, if a supplier can get the right labour and the appropriate part to a property particularly quickly, service levels improve as response times shorten. This improves the value obtained from the building. Similarly, by tracking buyer spending and supplier performance, purchasing patterns can be assessed and areas of additional savings opportunities highlighted.

EAM thus offers information and supporting operational processes to improve significantly the value obtained from an organisation's capital assets.