In the past, organizations viewed two separate approaches to managing physical assets using technology. Either an enterprise resource planning (ERP) system could be employed, presenting a large-scale solution to govern asset-related processes, or an enterprise asset management (EAM) application could be utilized for a more specialized means to track and predict the behavior of assets. Decision-makers pursuing either of these methodologies all desired the same results — increased productivity, lower costs, extended asset lifespans, and a reduction in energy usage.
ERP solutions offer the ability to manage multiple activities within the same system through the combination of function-specific modules and applications. Companies benefit from access to a single, consolidated database, which provides greater visibility into processes and helps to eliminate the need for third-party technologies. In comparison, EAM solutions are designed to specifically support assets, equipping organizations with functionality designed to increase asset lifespans and cut costs through preventive maintenance and a more in-depth look into asset performance. Also known as computerized maintenance management systems (CMMS), EAM applications deliver best-of-breed capabilities to monitor everything from physical assets to buildings and equipment.
While ERP is a great fit for managing production, the supply chain or financials, its capabilities can fall short when used for asset management. From the perspective of a CIO, relying on one system to support a wider variety of company needs is very appealing. But the reality is that this one-stop-shop approach doesn’t provide the necessary functionality to perform critical asset management and sustainability tasks.
In contrast, using an EAM application provides users with the necessary tools to improve the operational performance of assets and help the company to establish facility and maintenance best practices. However, an EAM system doesn’t take the needs of finance, IT, or manufacturing into account, making it necessary to implement other systems to meet these requirements.
An integration approach
Essentially, it’s impossible for one type of software system to effectively address the goals and prerequisites of an entire organization. While it’s tempting to invest in only one solution, this route will only provide shallow capabilities that enable simplicity and unification but are lacking in depth and reliable functionality.
This is why industry leaders now look to integration between ERP and EAM systems to help companies achieve desired results across the enterprise. Historically, it has been very costly and complex to attain the necessary level of connectivity, with different databases, structures, and system limitations making it difficult to sync applications. However, with today’s lightweight middleware options, organizations can reduce the complexity of such an integration to achieve the desired level of communication between applications.
To integrate EAM and ERP systems, organizations should keep these four tips in mind.
- Define what processes will look like beforehand. Determining which system will execute processes prior to undertaking the integration will help to reduce configuration costs and ensure the project is not prolonged with last minute decisions.
- Ensuring connectivity between financials is critical, so note this as a key goal of the initiative. Organizations must correctly allocate costs and pay vendors. All financials related to asset management activities, such as MRO purchasing, should be passed to the ERP system and not just tracked within EAM.
- Performing all work management such as purchasing, maintenance, and engineering in the same system is the most efficient way to capture asset lifecycle costs. Make sure these functions reside in one system, preferably EAM, but are still integrated with other financial data.
- No matter how good your middleware or strategy is, it will still be a complicated process. Ultimately having visibility into costs from an individual asset level will promote better-informed business decisions that save the organization money in the long-term.
The future of asset management
Today’s leaders in asset management are looking to cloud deployment, as well as mobile and social platforms, to take sustainability and energy consolidation efforts to the next level. Organizations should seek to integrate systems now, as the future of asset management will require this level of real-time connectivity to undertake these next-step initiatives. If decision-makers want to keep pace with competitors, then equipping plant managers with access to the company’s EAM system via their mobile devices or providing a social collaboration platform where employees can discuss business challenges must be in the conversation. Without integration between assets and manufacturing processes, organizations will not be equipped to move the asset management technology strategy forward.