No matter what your industry or requirements for implementing an asset management system, it’s always a struggle to determine the right level of expenditure. Is a manual system sufficient, or perhaps a simple spreadsheet? Can you write a simple custom program or download a free or low-cost solution from the Internet? Should you purchase something simple and buy a more sophisticated solution when you’re ready or purchase a package now that fits your future needs? Is cash flow an issue? Let’s provide some guidance in answering these and other questions when exploring less expensive CMMS solutions.
The larger your company, the less likely free or low-cost CMMS solutions will satisfy your needs. However, sometimes this is not the case. For example, suppose you run a small site within a large multinational corporation. Perhaps you employ only a few maintainers to look after some simple production equipment. Is it really necessary to adopt the corporation’s comprehensive enterprise-wide solution? Sometimes the answer is “yes” because the benefits to the enterprise outweigh the additional cost borne by the small site. But there are times when adoption of the more complex enterprise solution is completely unnecessary. The hard savings and soft benefits must be explored for each alternative solution in order to determine the best option for both the site and corporation overall.
For small companies and mid-sized companies with relatively few maintainers, spending big money on a CMMS package is more than likely unthinkable. However, regardless of company size, there is always benefit in some systematic approach to work order control, preventive maintenance, spare parts inventory control, and tracking equipment history. This is because every company can benefit from ensuring the maintenance staff is efficient and effective and from making certain the physical assets experience maximum availability, perform at the expected level, are reliable, produce quality output, and cost little to maintain over their lifetimes. Implementing one of the many options from manual systems to full-function CMMS packages will almost always pay for itself, if you can scale the solution to your technical requirements and budget.
The first step in determining the right solution for your needs is to develop technical requirements. Although this may appear obvious, it’s surprising how many companies will skip this step and move immediately to researching the marketplace. Picking a solution based on essentially which vendor mounted the best marketing and sales effort will rarely result in an optimum solution. It’s important to begin by developing future-state process flows and a list of system requirements that support each flow. Develop workflows for how work is to be planned, initiated, scheduled, executed, recorded, and analyzed to identify improvements. Once supporting requirements are drafted and prioritized, you’re in a much stronger position to see beyond the sales capability of each vendor and focus on which solution best satisfies your highest priority needs.
As a speaker at various conferences, I have asked participants with CMMS to state approximately what percentage of the available features and functions their company actually uses. On average the response is somewhere between 15% and 30%. This statistic is not surprising, as one would expect that software built for multiple industries, company sizes, locations, applications, and workflows would yield similar results, including spreadsheets and word processors. The more critical question is which features and functions are being used, not what percentage. This is why matching a solution to your needs is so important — find the CMMS that best fits your requirements, and make the best use of its functionality.
Consider starting with manual or semi-automated systems to test some of your future-state flows. Much of the preparatory work will have to be done anyway, whether systems are manual or computerized, such as developing job plans for repetitive work. You can then more easily determine if the incremental gain in moving to a full-function CMMS package is worth the additional cost.
There are also a host of specialty CMMS packages that focus on a given industry; asset class, such as facilities or mobile equipment; asset type, such as roof or boiler; or specific maintenance processes, such as PM, calibration, or root cause analysis. These solutions should be rated against your prioritized list of requirements to see if there is a fit.
Cash flow considerations
Even if there is a clear payback for purchasing a CMMS, smaller companies may not have the cash to outlay for license fees, implementation, customization, and ongoing maintenance of the system. There are other options available as described below.
Hosted solution: At companies that do not want the expense and hassle of managing their own servers and hardware, you can use the Internet to access your CMMS running in the cloud or at a specific third-party vendor site.
Software as a service (SaaS): Another option is to pay for both hosting and access to the CMMS via the Web. Instead of paying a one-time license fee and annual maintenance costs, you can pay a monthly or annual subscription fee or for blocks of time logged onto the system — on a per-use basis. The CMMS vendor owns the software and servers. The fee typically includes regular software upgrades, maintenance of the software (bug fixes), and limited phone or online support. Some CMMS vendors also include basic implementation costs such as assistance in data loading.
|David Berger, a Certified Management Consultant (C.M.C.) registered in Ontario, Canada, is a Principal of Western Management Consultants, based in the Toronto office. David has written more than 200 articles on a variety of topics such as maintenance management, operations management, information technology, e-commerce, organizational design, and strategy. In Plant Services magazine, he has written a monthly column on maintenance management in the United States, as well as three very extensive reviews of maintenance management systems available in North America. David has done extensive work in the areas of strategy, information technology and business process re-engineering. He can be reached at email@example.com.
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Advantages: Some of the key advantages of using an application service provider (ASP) as described above are:
- hardware and software costs are consistent and predictable
- service levels can be guaranteed through a service level agreement
- there is no large outlay of cash for licenses, new hardware, and implementation services
- the CMMS vendor keeps the software and hardware current
- because the vendor services multiple clients, the economies of scale should ensure that more sophisticated and reliable equipment is being deployed and more skilled resources are available.
Disadvantages: An ASP has potential disadvantages as well, including:
- loss of control over the hardware/software; you’re at the mercy of the ASP (security breach, bankruptcy, policy changes, data ownership issues)
- possible difficulty integrating the CMMS to external software applications such as your accounting package, especially if the CMMS is constantly being upgraded
- the possibility that the ASP model is a more expensive solution than the traditional license model, especially for a time horizon of, say, greater than 10 years.
One key factor that is often overlooked in weighing various asset management system options is the value that the CMMS vendor brings to your company. Many of the CMMS vendors have considerable specialized knowledge of not only their systems, but the industries to which they sell. Do not underestimate the value a long-term partnership with the right CMMS vendor can bring to your company, including help in implementing best practice processes, measurement, and industry benchmarking.
The business case
Typical savings from implementing any manual or automated system for asset management stem from four major sources, including the assets, parts, labor and operations. Some companies focus on the asset-related savings, such as reduced asset downtime, increased asset performance and reliability, and lower total cost of ownership. Others focus on spare parts inventory savings, such as reduced stock levels, obsolescence, and stockouts. Still others are looking for labor productivity savings, including better operator and maintainer utilization, efficiency, and effectiveness. However, sometimes the most significant savings are in terms of operations, such as increased revenue from producing higher-quality output faster, cheaper, and in greater quantities.