2007 CMMS/EAM Software Review

Incremental gains in CMMS features and functions have made many packages better at handling the myriad and specialized requirements of particular industries and facilities. But the big news has been the plethora of vendor mergers and acquisitions, which have left plant professionals concerned about whether and how their current system or future selection will be supported.

By David Berger

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There has been a lot going on in the kitchen since last year’s CMMS/EAM software review. Incremental gains in CMMS features and functions have made many packages better at handling the myriad and specialized requirements of particular industries and facilities. But the big news has been the plethora of vendor mergers and acquisitions, which have left plant professionals concerned about whether and how their current system or future selection will be supported.

Increased software capabilities in 2006 prompted us to expand the scope of the Plant Services CMMS/EAM Software Review, our detailed hands-on comparison of current offerings. The Review is now far too comprehensive to fit on the pages of the magazine – it resides on a purpose-built Web site at www.PlantServices.com/CMMS_Review. There, you can find detailed information in the form of verified answers to a detailed questionnaire covering 30 areas of vendor profile and package capabilities (see sidebar, “Characteristics quantified”). You can assign weight to every aspect to reflect its importance in your facility, and the site will rank the packages according to how well they fit your requirements.

This year, along with incorporating new owners and package names two-thirds of the listings being new or revised. There is now data on 13 packages from 12 vendors (Table 1). More continue to be added as they launch new versions and choose to participate.

The site also offers many resources and solid information for anyone who wants to better understand CMMS/EAM capabilities, solve an application problem or more fully use an existing system. But before you rush off for a hearty dose of data at www.PlantServices.com/CMMS_Review, enjoy this year’s juicy bits of background for an appetizer.

Feeding frenzy

In the entire history of the CMMS industry, North America has never seen such a merger and acquisition frenzy as we have witnessed during the past few years. Best-of-breed vendors both big and small have been snapped up by companies representing quite a wide range of industries, including:

  • ERP software
  • Venture capital
  • Plant automation
  • Technology services
  • General software
  • General manufacturing

There are several theories about what is transpiring to cause this heightened activity:

  1. Many of the entrepreneurs who started these CMMS companies in the ’80s or earlier are close to retirement age and are looking to cash out.
  2. Large, best-of-breed CMMS vendors are facing increased competition from Tier 1 ERP vendors that have been growing through acquisition and natural growth. These large ERP vendors are hungry for opportunities to expand their customer base and product mix.
  3. There is still lots of business to be won during the next few years, especially for those CMMS vendors that are targeting small- and medium-sized companies. Surveys I’ve conducted during the past five years have shown that about 30% of companies still don’t have a CMMS, and many plan to replace what they have. As the packages become progressively more sophisticated and easier to use, and as manufacturing and other industry executives look for ways to trim costs from areas that don’t produce revenue, the CMMS has proven to be a valuable tool for improving their return on assets.
  4. There’s no clear market leader in the standalone CMMS world. This is especially true for CMMS vendors in Tiers 2, 3, and 4, for which there are hundreds of package options. Although there are fewer Tier 1 standalone CMMS vendors, the market is certainly not as concentrated as that of Tier 1 ERP vendors. This leaves the opportunity for a company to build market dominance through acquisition of one or more CMMS vendors.
  5. Some technology-based companies interested in acquiring CMMS vendors are simply looking to expand their product and service offerings, vertically and/or horizontally. The CMMS provides an excellent complement to many such businesses.

Time will tell whether this increased merger and acquisition activity is in the best interests of the market. Certainly, if it means a greater pool of capital is available for areas such as research and development, and if competition remains healthy enough that prices don’t begin to climb, then it’s likely a good thing. This, of course, presupposes the CMMS industry remains a growth industry, and thus the acquirers of the CMMS vendors can extract a return on their investment. A shrinking market would likely require a reduction in the number of CMMS vendors for any of them to turn a profit.

Specialties bring in picky patrons

Although some might argue that industry and product specialization are more marketing gimmicks than real value to the customer, there’s no question that it’s a recent trend. I would say that companies are simply looking for a CMMS package that meets their unique needs, and a vendor that understands their industry. Some examples are as follows:

  • Pharmaceuticals require a CMMS that has electronic signature capability to comply with FDA 21 CFR Part 11.
  • Municipalities are looking for a CMMS package with sophisticated linear asset functionality for handling parks, underground water and wastewater networks, and so on.
  • Telecommunications companies want estimating capability with features such as compatible units.
  • Companies with considerable mobile equipment are looking for fleet management functionality, such as compliance with the vehicle maintenance reporting standards (VMRS) coding structure or the American Trucking Association’s standard listing of components.
  • Pipeline companies need inspection and risk assessment features.
  • Large oil and gas or nuclear plants need sophisticated safety-related functionality such as lockout/tagout.
  • Third-party service providers want features such as contract management, third-party billing, help desk and dispatch.
  • Government departments are keen on sophisticated budgeting capability including encumbrance accounting.
  • Asset-intensive companies experiencing considerable capital expansion can save millions of dollars if the CMMS can help integrate and follow the complete life cycle of asset-related data from engineering design to deployment to maintenance.

Thus, CMMS vendors continue to try to develop a competitive advantage and dominate a given market niche through industry/product specialization.

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