Learn More About Enterprise Asset Management (EAM) Software
What is enterprise asset management (EAM) software?
Enterprise asset management (EAM) software helps users track assets across their entire lifecycle, from installation to disposition. Compared to computerized maintenance management systems (CMMS), which focus on small and mid-market businesses, EAM software is beneficial mainly for large enterprises that manage various assets by providing detailed tools to track costs, optimize performance, and manage asset resources. In this sense, EAM systems are more dynamic and offer more business functionality than a CMMS.
EAM tools take asset management a step further by covering maintenance and handling other business functions such as procurement, inventory management, and field service management. In this regard, large businesses looking for software to help them manage a wide array of assets and handle multiple business functions should be looking to use EAM software. EAM solutions will offer businesses a more holistic view of company assets and a better sense of their performance.
What does EAM stand for?
EAM stands for enterprise asset management, meaning this software benefits large companies in asset-intensive industries.
What are the common features of enterprise asset management solutions?
The following are some core features within EAM software that can help users manage all stages of an asset lifecycle:
Asset definition: One of the core functions that separates EAM software from similar software is asset hierarchy. An asset hierarchy allows businesses to keep track of the history and features of any given asset. An asset hierarchy will often be broken down to show what the asset does, its location, and what parts are within that asset. An example would be an air conditioning unit installed on a specific date in a particular office containing a motor, freon, and an electric harness. While this is an essential asset hierarchy, it gives a sense of how visualizing the history and parts of an asset would provide a maintenance team with a better understanding of the location of assets and when, where, and how to schedule maintenance checkups.
Asset tracking: Companies using fixed assets must strictly know which equipment is used, where, and how. This functionality relies on asset information provided by equipment manufacturers and the asset hierarchy mentioned above. Tracking numerous fixed assets across multiple locations depends on geographic information systems (GIS) and radio-frequency identification (RFID).
Inventory: Inventory management features help users track spare parts and accessories required for repairs and other maintenance operations. Managers also use inventory management to estimate future demand for spare parts and plan maintenance operations based on stock availability.
Depreciation: Fixed assets lose their value over time, and companies need to identify all of their assets' accounting value. While EAM does not include accounting features, it provides the information required to calculate asset value at any moment. Tracking the value of assets helps companies identify their return on investment (ROI), also known as return on assets (ROA).
Maintenance: EAM tools allow businesses to track projects and work orders that involve the installation and maintenance of assets. Suppose a company is constructing an entirely new facility containing hundreds of assets. In that case, a project management dashboard can monitor the estimated time of completion of work orders, who is in charge of which assets, and compare the estimated and actual costs of the facility.
Field service: Many workers who deal with managing assets are often in the field and working on the go. EAM systems allow these users to monitor and manage assets from their mobile devices while in the field. Within the mobile application, users can make work orders, monitor inventory, and record asset performance.
Monitoring: Condition monitoring allows businesses to monitor an asset's condition by installing sensors into a system or physical location. The sensors streamline data on an asset and alert when an asset needs to be replaced or repaired. This helps with continuous preventive maintenance, reducing the likelihood that an asset will fail to function correctly.
Contract and warranty: Fixed assets usually come with a warranty which allows companies to get equipment repaired or replaced at a low cost or for free. Warranties are generally included in the sales contract for the asset acquisitions. Contract management also helps companies when they outsource maintenance operations and need to define service-level agreements clearly.
Analytics: With business intelligence features, users can get real-time reports on how assets perform to determine if a particular asset is underutilized or is no longer useful. Users can get information on average asset downtime, uptime, mean time between asset failures, and asset depreciation. Asset analytics allow businesses to see which assets are efficient and which ones are at risk.
Integration: Since companies implementing EAM also use other types of software, such as ERP and accounting, it is critical to integrate all of these systems. Integration with EHS is also essential because companies need to ensure that each asset is up to code with safety, health, and environmental regulations.
What are the benefits of using enterprise asset management systems?
The main benefits of EAM systems are:
Centralize asset data: EAM software serves as a central hub for all departments within an organization to quickly find information on how assets are performing. For companies that manage many assets across multiple locations, this kind of visibility is paramount to understanding the performance and status of assets in the field. Accurate asset data also helps with maintenance planning by assisting managers in allocating the right tools for each operation, such as installation or repairs.
Monitor assets: EAM reduces administrative burden by monitoring all assets digitally, eliminating data entry errors, and optimizing maintenance activities. Asset monitoring is critical for companies that use equipment and tools in multiple locations, such as production facilities, warehouses, retail stores, and distribution centers. Monitoring also refers to tracking how assets are being used, not only where they are located. Businesses should limit improper use of assets, which can damage equipment, disrupt operations, and cause accidents.
Reduce costs: EAM software systems help companies reduce costs by extending the life of company assets through maintenance. It can also eliminate wasteful spending by identifying which assets are not efficient and helpful. Managers are always looking to improve their ROA, which measures how profitable a company is relative to its total assets and how efficiently it leverages those assets to generate earnings. EAM helps companies improve their ROA by providing ways to optimize each step of the asset lifecycle.
Who uses enterprise asset management applications?
EAM helps companies from asset-intensive industries, such as manufacturing, utilities, or transportation. These companies may also outsource maintenance operations related to some asset lifecycle management stages, such as installation or disposition.
Asset managers: Maintenance managers use EAM apps to monitor asset performance, plan, and schedule maintenance tasks, allocate resources to work orders, and identify opportunities to optimize the performance of the company's equipment.
Maintenance teams: Maintenance team members use EAM tools to access work orders, instructions, and documentation on how to perform their work, such as inspections and repairs. Field service technicians require a mobile version of the EAM software to access the solution while traveling.
Production managers: Manufacturing operations rely significantly on the uptime of the assets used in production. Production managers use the EAM software suite for production planning and to allocate equipment to various procedures and workstations. It is, therefore, crucial for them to know what assets are available and which ones are the most reliable.
Accountants: Complex equipment can be costly to purchase, implement, and maintain, and these costs can impact the profitability of a company. Therefore, it is essential for accountants to accurately estimate asset costs based on EAM systems' data, such as purchasing prices or parts and labor costs related to maintenance.
What are the alternatives to EAM software?
Alternatives to EAM software that can replace this type of software, either partially or completely, include:
Asset performance management software: This type of software does not include standard features for asset tracking and maintenance but focuses on functionality to optimize asset performance. Asset optimization identifies opportunities for improving asset utilization and helps managers with decision-making. For example, capital projects like building an industrial facility require complex equipment like cranes, whose performance is critical to the project's success.
CMMS software: CMMS software is a scaled-down version of EAM that focuses on small and medium businesses (SMBs) rather than enterprise buyers. Both are considered asset management systems, but CMMS usually does not include features for predictive maintenance or tracking of complex assets such as linear assets (power lines, roads, and rail tracks).
Facility management software: Facility managers need to track multiple types of assets, such as conveyor systems, storage units, racks, or lifting equipment like forklifts. EAM systems don't always provide the features for all these types of assets and may not always be the best choice for supply chain companies or retail facilities.
Which companies should buy EAM products?
EAM helps companies from asset-intensive industries, such as manufacturing, utilities, or transportation. These companies may also outsource maintenance operations related to some stages of the asset lifecycle management, such as installation or disposition.
Manufacturers: Manufacturers often deal with audits and inspections to ensure their products are up to code; EAM software enables manufacturers to streamline and prioritize audit activities. When an audit comes around, the EAM software will display a list of what assets need to be audited and how to audit them. This will reduce the amount of time spent on each audit, freeing up more time for manufacturers.
Utilities and energy managers: Many utilities managers must continue to prioritize environmental concerns. With EAM software, energy consumption can be monitored regularly, ensuring that no energy is wasted. Furthermore, EAM systems can help utility managers improve sustainability while simultaneously enhancing equipment, facility, and vehicle management.
Maintenance services providers: Companies that provide maintenance services may not own fixed assets but could use EAM software to track their customers' equipment and plan and schedule operations.
How to choose the best enterprise asset management software
Requirements Gathering (RFI/RFP) for Enterprise Asset Management (EAM) Software
EAM requirements can include standard asset management features like asset tracking and work orders and industry-specific criteria such as compliance with standards and regulations for safety and environmental protection. Technical requirements include the delivery model (cloud or on-premises), mobile versions of the software, or integration with other systems such as ERP.
Compare Enterprise Asset Management (EAM) Software Products
Create a long list
A long list should include all EAM products with the core features for enterprise-level maintenance. CMMS systems should not be included, except when they offer advanced versions that include components similar to EAM. When buyers also need to replace ERP systems, the EAM long list can consist of ERP software with advanced maintenance functionality.
Create a short list
Buyers can use criteria to eliminate products from the long list to generate a shortlist. Some examples include functionality that is not common to all EAM systems, such as linear assets or predictive maintenance.
Integration with ERP and accounting systems is another criterion that buyers can use to create a shortlist. Also, global companies need multilingual and multicurrency support and the ability to share asset data across multiple business units.
Since regulatory compliance is critical in heavily regulated industries such as life sciences, EAM systems that do not support industry standards and regulations should not be included in the shortlist.
Conduct demos
EAM demos should be based on scenarios that simulate real-life operations at each stage of the asset life cycle, from acquisition to obsolescence. Each scenario can focus on a type of persona's specific needs, such as maintenance managers, production planners, or accountants. For instance, accountants need to see how the system handles depreciation methods, while production managers are more interested in allocating equipment to workstations on the shop floor. The maintenance team would benefit more from seeing how the EAM generates and manages work orders.
Selection of Enterprise Asset Management (EAM) Software
Choose a selection team
The selection team usually includes asset managers, executives such as the company's CIO and CFO, and subject matter experts with extensive knowledge of industry-specific maintenance. Managers from other departments, such as production or procurement, can also be involved in their teams using the EAM software.
Negotiation
The negotiation should focus on the strengths and weaknesses of each product and vendor. For instance, the ability of the vendor to customize the system or provide global support can be a deal breaker.
Final decision
While the software's price is important, buyers should try to estimate the potential ROI of the EAM solution before making a decision.
How much does EAM software cost?
It is important to estimate the real cost of the software, which includes software licenses, professional services, and the hardware and devices required to use it.
Return on Investment (ROI)
Positive ROI is achieved when the EAM software's benefits exceed its costs. While the costs are relatively easy to identify, the benefits aren't always straightforward. One apparent advantage of EAM is the decrease in the time spent maintaining assets. Benefits like increased asset performance or employee productivity are more challenging to evaluate, but even an estimate is preferable to not considering them.
Implementation of Enterprise Asset Management (EAM) Software
How is EAM software implemented?
Due to its complexity, buyers usually require help from vendors or their partners to implement EAM. All parties need to create an implementation plan that clearly defines all project stages, deliverables, and deadlines.
Who is responsible for implementation?
Maintenance managers are responsible for the overall implementation, focusing on business processes, training, and configuration. External project managers and consultants often provide additional expertise and support.
The company's IT department is in charge of the system's technical deployment. While cloud solutions can be deployed without IT help, programmers and database administrators must integrate EAM with other systems and manage user roles and access rights.
What does the implementation process look like for EAM tools?
The EAM implementation process should start with an inventory of all the company's assets, equipment, tools, and spare parts. This information is then imported into the new system so employees can use it when using EAM.
Asset data is also valuable during the implementation phase, when the EAM solution should be customized based on the buyer's specific needs. User training should also use actual asset data that users are familiar with.
Go-live should only happen when the system is configured correctly, and the users are knowledgeable enough to use it efficiently.
When should you implement EAM systems?
There is no perfect timing for implementing EAM, but it is preferable to avoid peaks in business activity when the implementation may be disrupted. If the buyers also replace other significant systems like ERP, it is preferable to synchronize the deployment of all the systems to streamline integration and data transfers.
Companies that own high-value assets may want to implement a new EAM system after closing their fiscal year. This is because accountants need to calculate asset value correctly to close the books, which means that the new EAM system will use up-to-date and accurate data.
Enterprise asset management software trends
Predictive analytics
Predictive maintenance is a constantly evolving feature that EAM software tries to perfect. With advancements in artificial intelligence, asset management hopes to transform an organization's management approach from reactive to predictive. An EAM system could learn based on analysis and historical data, predicting when maintenance is necessary. For example, if an asset has been historically audited and monitored every 30 days, the EAM software would automatically alert maintenance managers. This reduces the need to schedule each maintenance checkup manually.
Industry 4.0
Automation is omnipresent in asset-intensive industries, and technologies like the Industrial Internet of Things (IoT) and artificial intelligence are being adopted at a fast pace. Robots and intelligent equipment are replacing old assets, and some companies already have fully automated facilities. Intelligent assets are much more efficient than fixed assets but require predictive maintenance and advanced expertise. Furthermore, industry 4.0 equipment relies on real-time data exchange, which requires IoT networks and sophisticated sensors.
