The computerized maintenance management systems (CMMS) and enterprise asset management (EAM) software marketplace is no place for the uninitiated. With more than 100 packages from which to choose, finding software that’s just right for your plant can be an awesome task. Solutions range from small, local vendors that sell simple, shrink-wrapped CMMS packages for less than $1,000, right up to some of the largest companies in the world selling sophisticated, multimillion-dollar software designed for complex international enterprises.
I’ve conducted this CMMS/EAM software review annually since 1987 (published in Plant Services since 1997), and have observed many changes over the years. Computerization isn’t a panacea, but there’s one consistent theme I’ve seen year after year: A genuine desire to improve a company’s bottom line, through features and functions that increase the accuracy and timeliness of information available to those on the front line and their managers. With better information available sooner, people can react quicker to suboptimal situations. This ability eventually translates into greater asset availability and performance, improved asset reliability, higher and more consistent quality of output, and a lower asset life cycle cost. In turn, this means a lower cost of doing business and higher return on capital employed.
Year after year, hardware, software and telecommunications capabilities continue to improve dramatically, albeit at a slower pace now than the early years when computers first appeared. During the past three decades, the big surprises are:
- The comparatively poor 70% rate of adoption of CMMS packages
- The relatively constant 50 % failure rate in implementing them
- An inability to exploit the CMMS features and functions after they’re implemented (about 35% average utilization)
- Continued resistance to changing the attitudes, behaviors and procedures the CMMS functionality supports, which results in less-than-optimal bottom-line improvement (more than 80% of companies don’t even track CMMS cost versus savings).
Executives see big opportunities
So, as our technology improves, it appears human nature doesn’t. Although this revelation shouldn’t astound anyone, it never ceases to amaze me just how often we fall into the same traps, company by company, implementation after implementation. Even organizations now working on their third- and fourth-generation CMMS struggle with getting the most out of this investment.
In my view, this will surely change sometime in the near future for one simple reason: We’re running low on big ways to improve corporate profitability, and the CMMS enables one of the largest opportunities available. As more senior managers understand the potential bottom-line results, the focus and resourcing will shift to make more productive use of the CMMS.
There are many factors in play that weren’t as prevalent earlier, and hence weren’t driving senior executives to focus on their assets. Some of the more significant factors that caused the shift in attention in the corporate suite are:
Economic downturn: A weakened economy means senior executives are scrambling to satisfy profitability targets that shareholders demand. Typically, in bad economic times, companies spend less on maintenance, which produces even greater pressure to get more out of existing assets with less money to spend.
The Green bandwagon: Under the banner of green, asset sustainability, corporate social responsibility (CSR), conservation, climate change and so on, senior executives have had to show their employees, customers and shareholders that they’re doing their part to make the world a better place. When it comes to asset management, however, this isn’t about lip service. An increasing number of executives discovered that saving the planet and saving money aren’t necessarily mutually exclusive.
In fact, more informed leaders have found more money in asset sustainability than in traditional savings from a CMMS. This is especially true for asset-intensive companies. The annual market for MRO in the United States is about $100 billion, whereas the average spend on energy is about $300 billion. When the executive suite discovers that the CMMS can assist in better managing energy expenditures, as well as carbon and other emissions, expect a huge spike in corporate attention and action.
Heightened risk: Regulatory pressure and risk mitigation go hand-in-hand with asset sustainability. If top management doesn’t understand or embrace change that stems from sustainability, they’ll eventually be dragged into it by legislation or actions to avoid risk exposure. As the world becomes more complex, thereby increasing risk, and as executives learn that avoiding risk can mean avoiding jail time, there’s a shift in senior management’s attitude toward better management of critical assets. This means better planning, monitoring and control systems that predict and prevent catastrophic consequences such as asset failures, environmental upsets and health and safety risks.
Aging workforce: As baby boomers age, a large chunk of our most knowledgeable workers will be gone in a relatively short time. Numerous studies point to the issues surrounding an aging workforce, yet little action has been taken. However, as the talent loss becomes more acute, it’s likely that senior management will have an increased interest in capturing that disappearing knowledge in the form of best practices, procedures, standards, measures, equipment history and so on, using the CMMS as a data depository and knowledge-management tool.