EAM: A Comprehensive Approach to Enterprise Asset Management

The assets of an enterprise are the basis of its activity and competitiveness. The efficiency of their use determines the success of a business, especially in an increasingly competitive and resource-constrained environment.

With rapid growth, large organizations face challenges in asset management. How to track the condition of hundreds of pieces of equipment at different production sites? How to optimize fleet utilization? How do you manage the asset lifecycle from planning and procurement to write-off and disposal? These challenges require a systematic approach.

EAM (Enterprise Asset Management) system – software for comprehensive management of physical assets of the organization at all stages of their life cycle. EAM allows you to keep records, plan usage, optimize processes and monitor the condition of assets. The result is increased efficiency, reduced costs and better-informed management decisions.

In this article, we will look at:

• The key capabilities of EAM;
• Business benefits of implementation;
• Differences of EAM from ERP and what is the relationship to ITAM;
• Application of EAM in different industries;
• Practical steps to get started with asset accounting;

This article will help you evaluate the potential of EAM to transform your organization’s asset management and make it more competitive.

What is Enterprise Asset Management (EAM)?”

EAM (Enterprise Asset Management) is a comprehensive approach to managing an organization’s physical assets. An EAM system is software that allows you to track, analyze and optimize the use of enterprise assets throughout their lifecycle.

Unlike traditional accounting systems, EAM covers all aspects of asset management:

• Inventory and accounting:accurate information about the location, condition and characteristics of each asset.
• Planning and forecasting: determining the optimal timing for replacing or upgrading equipment.
• Procurement management: automating the processes for acquiring new assets and spare parts.
• Operation Control: monitoring asset utilization, identifying downtime and inefficiencies.
• Analysis and reporting: collecting and processing data to make informed asset management decisions.

EAM systems are applicable to a wide range of assets, from manufacturing equipment and vehicles to buildings and facilities. They are particularly effective for organizations with a large number of physical assets spread across multiple locations.

Key components of an EAM system:

• Asset Database: a centralized repository of information about all of an organization’s assets.
• Planning Module: tools to optimize asset utilization and plan asset maintenance.
• Monitoring system: real-time data collection on asset condition and performance.
• Analytics module: data processing and reporting for decision support.
• Integration capabilities: interoperability with other corporate systems (ERP, ITSM, ITAM).

Enterprise Asset Management (EAM) systems are becoming increasingly in demand in the digital transformation of business. They enable organizations to make the most efficient use of their resources, reduce maintenance costs, and improve overall operational efficiency.

EAM System Capabilities

Enterprise Asset Management (EAM) systems are transforming the approach to asset management. Here’s how it works:

Asset Accounting and Inventory

• Create and maintain a detailed inventory of all assets
• Tracking the location and movements of assets
• Storage of technical documentation and specifications
• Automating inventory processes

Planning and optimization of asset utilization

• Scheduling of equipment operation
• Predicting the need for new assets
• Optimizing resource utilization and allocation
• Planning for asset replacement and modernization

Asset lifecycle management

• Asset condition tracking at all stages
• Planning and controlling new asset procurement processes
• Manage the write-off and disposal of obsolete assets
• Estimating the total cost of ownership (TCO) for each asset

Monitoring and Control

• Collecting real-time data on asset performance
• Detection of deviations from normal performance
• Predictive analytics to prevent failures
• Compliance monitoring

Cost Management

• Accounting for direct and indirect asset maintenance costs
• Analyzing the efficiency of asset investments
• Optimization of maintenance and repair budgets
• Controlling energy and consumables costs

Analysis and reporting

• Formulation of detailed reports on the condition and utilization of assets
• Data visualization with informative dashboards
• Analyzing key performance indicators (KPIs)
• Decision support based on up-to-date data

Integration and scalability

• Interoperability with other corporate systems (ERP, ITSM, ITAM)
• Ability to expand functionality as the business grows
• Cloud solutions for remote access and management

The capabilities of EAM systems allow organizations to improve the efficiency of asset management, reduce costs and optimize business processes. At the same time, the specific set of functions can vary depending on the specific industry and the needs of a particular enterprise.

Benefits of EAM implementation for business

Implementing an enterprise asset management (EAM) system can have a significant impact on the effectiveness of a business’s asset management. Organizations using EAM report a number of key benefits in various aspects of their operations.

Enhancement of asset utilization

Reduction in maintenance costs

Improve planning and decision-making processes

Enhance transparency and control

It is worth noting that the realization of these benefits depends on many factors, including the specifics of the enterprise and the quality of the EAM system implementation. Each organization may experience the effects of EAM implementation differently, and some benefits may not be realized immediately, but over the long term.

When considering an EAM implementation, it is recommended to thoroughly analyze current processes and evaluate the potential return on investment of the new system.

EAM vs ERP: What’s the difference?

EAM (Enterprise Asset Management) and ERP (Enterprise Resource Planning) are two different but often complementary approaches to enterprise resource management. Understanding their differences can help you determine which system is best suited for your organization’s specific objectives.

The main differences:

• Focus of attention
ERP: Covers a wide range of business processes, including finance, human resources, logistics, manufacturing, and sales.
EAM:Specializes in the management of physical assets throughout their lifecycle.
• Depth asset management
ERP: Typically includes basic asset accounting and depreciation functions.
EAM: Provides advanced capabilities for detailed asset management, including maintenance, repairs, and usage optimization.
• Analytics and Reporting
ERP: Focuses on financial performance and overall business performance.
EAM:Provides in-depth analytics on asset performance, maintenance costs, and failure prediction.
• Resource Planning
ERP:Focuses on resource planning for common business processes.
EAM: Specializes in resource planning related to asset maintenance and operations.
• Integration with IoT and real-time data
ERP: Not typically designed to handle large amounts of data from sensors and IoT devices.
EAM: Often includes capabilities for integration with IoT systems and real-time data analysis.

Despite these differences, EAM and ERP are not mutually exclusive systems. In many organizations, they are successfully integrated to complement each other:

• EAM provides detailed asset information, which is then used in ERP for financial planning and reporting.
• ERP supplies procurement, supplier and overall financial performance data to EAM.
• The integration of the systems allows the creation of a single information environment for making complex decisions on the management of the enterprise.

When choosing between EAM and ERP (or deciding to use them together), organizations should consider:

1. The scale and complexity of asset management;
2. Current resource management challenges;
3. Strategic goals of the enterprise;
4. Enabling integration with existing systems;

For businesses with a large number of physical assets or complex manufacturing equipment, implementing a specialized EAM system can bring significant benefits, even if an ERP is already in use. At the same time, for organizations with less focus on physical assets, ERP functionality may be sufficient for basic asset management.

The relationship between EAM and ITAM

In the era of digital transformation, the line between physical and IT assets is becoming less and less clear. Manufacturing equipment is being equipped with computers, buildings are becoming smart objects, and vehicles resemble mobile data centers. In this environment, there is a need to integrate approaches to managing different types of assets.

Enterprise Asset Management (EAM) and ITAM (IT Asset Management) are two interrelated areas of asset management that increasingly overlap in today’s organizations. Let’s take a look at how they interact and complement each other.

Similarities:

1. Purpose: Both systems aim to optimize asset utilization and reduce total cost of ownership.
2. Lifecycle:EAM and ITAM cover all stages of the asset lifecycle, from acquisition to decommissioning.
3. Financial aspect: Both systems help control costs and optimize asset investments.

Differences:

• Management Object:
EAM: Physical assets of the enterprise (equipment, buildings, transportation).
ITAM: IT assets (computers, servers, software, licenses).
• Performance Metrics:
EAM:Equipment uptime, overall equipment effectiveness (OEE), maintenance costs.
ITAM: IT service availability level, license compliance, IT costs per user;
• Regulation:
EAM: Frequently subject to industry standards and regulations.
ITAM: Focuses on IT industry standards and information security requirements.
• Integration with business processes:
EAM: Close connection with production and logistics processes.
ITAM: Integrated with IT service management (ITSM) and information security processes.

EAM and ITAM interoperability:

• Data Integration:Information from ITAM can be used in EAM for comprehensive analysis of all enterprise assets;
• Collaborative planning: Coordination of IT infrastructure renewal plans with the overall asset management strategy;
• Unified processes: Applying best practices from both areas to create common asset management standards.

Interaction example:

An industrial enterprise uses EAM to manage manufacturing equipment. This equipment includes embedded computers and software that are accounted for in ITAM. When planning a production line upgrade, data from both systems is taken into account, allowing for a comprehensive decision that considers both the physical and IT aspects of the upgrade.

Modern IT asset management solutions, such as SimpleOne ITAM, provide comprehensive tools for process optimization. When implemented and configured properly, such systems can be effectively scaled to the EAM level, covering all categories of enterprise assets. This enables organizations to implement a holistic approach to asset management, improving operational efficiency and reducing total cost of ownership.

Application of EAM systems in various industries

EAM systems find application in a wide range of industries. Let’s look at the specifics of using enterprise asset management systems in different sectors:

EAM solutions are also finding their way into the IT industry, although here they often overlap with ITAM (IT Asset Management) systems. The main uses of EAM in the IT industry include:

• Data center infrastructure management
• Monitoring and maintenance of network equipment
• Scheduling upgrades and replacement of hardware components
• Optimize IT infrastructure power consumption
• Management of physical assets of IT companies (servers, storage systems, telecommunication equipment)

When implementing EAM-systems in any industry, it is important to take into account the specifics of a particular business, existing business processes and regulatory requirements. This allows to adapt the EAM-solution to the needs of the organization and get the greatest benefit from its use.

Where to start asset accounting at an enterprise?

Implementing an asset accounting system is an important step to improving the efficiency of enterprise asset management. Here’s a step-by-step plan to help get the process started:

1. Audit existing assets and processes
   Conduct a comprehensive inventory of the physical assets of the business, compiling a complete list of all assets with key characteristics (type, model, serial number, location) for each item, as well as an assessment of their current technical condition.
2. Define key performance indicators (KPIs)
   Identify key asset performance metrics specific to your industry, set target values for each KPI, and establish requirements for regular monitoring and reporting on selected metrics.
3. Develop an asset management policy
   Define roles and responsibilities in the asset management process, establish rules and procedures for each stage of the asset lifecycle, and create an asset classification system that meets your business needs. Develop a decision matrix for different asset management scenarios.
4. Choose the right solution.
   Analyze available enterprise asset management systems, evaluate their functionality against your needs and consider integration with existing systems (ERP, ITSM, ServiceDesk, ITAM).
5. Analyze the available enterprise asset management systems, evaluate their functionality against your needs and consider integration with existing systems (ERP, ITSM, ServiceDesk, ITAM).
6. Prepare your infrastructure and staff.
   Provide the necessary IT infrastructure for the EAM system, train employees on the new system, and assign responsibility for various aspects of asset management.
7. Start with a pilot project.
   Select a limited group of assets or a specific department for a pilot implementation, test all processes and functions of the system, gather feedback from users, and make adjustments as needed.
8. Gradually expand your reach.
   Roll out the system to other departments or asset groups in phases, analyze results and make improvements regularly, and continue to train and support users.
9. Regularly review and optimize processes
   Conduct periodic audits of your asset management system, analyze achievement of established KPIs, implement new technologies and best practices in asset management.

Remember that asset management is not a one-time action, but an ongoing process that requires digitalization and automation.

Conclusion

Asset management in today’s business goes far beyond simply keeping track of equipment. EAM systems are transforming the approach to utilizing enterprise assets, transforming them from passive objects to strategic tools for improving competitiveness.

EAM implementation is not just a technological upgrade, but a rethinking of the role of assets in business processes. It requires a change in corporate culture, where every employee recognizes the value of effective asset management.

The future of EAM is inextricably linked to the development of artificial intelligence, the Internet of Things and predictive analytics. These innovations will enable a shift from reactive maintenance to proactive management, where systems themselves predict potential problems and offer optimal solutions.