Now is the time for asset management modernization

June 29, 2022
Outdated systems are no match for today’s multidimensional challenges.

Asset managers are facing an unprecedented level of complexity and change. Powerful digitalization developments coupled with externalities such as the economy and changing business practices make clear the inadequacy of legacy asset management processes and systems.

In the economy, we are seeing a return to an era where financial control is a necessity. Across the board, firms are reporting higher costs for goods, services, and labor. As the cost of capital also continues to rise, it is essential to be efficient. Thus, firms are putting more emphasis on metrics such as asset and inventory turnover while simultaneously scrutinizing both the performance of the current plant and future investment. Added emphasis on operational and capital expenditures makes it essential for organizations to possess capabilities in investment planning, budget control, and overall visibility.

In terms of business practices, asset management used to be a primarily autonomous function but now there are multiple factors involved that demand collaboration. Asset managers must continuously have contact with contractors, customers, and owners, as core services such as maintenance and reliability continue to be outsourced; outcomes instead of tasks continue to be sold through servitization; and asset fleets continue to be traded. The prevalence of mergers, acquisitions, and asset transactions adds another layer to this challenge, because traditional practices and systems are ill equipped to handle constantly growing and shrinking asset fleets.

Further compelling modernization is the growing availability of digital transformation technologies and data-driven asset management capabilities. Innovative internet of things (IoT) technology and low-cost sensors make data abundant, and that data can be utilized to improve asset performance by helping managers to better understand the behavior and condition of the assets. This strategy, coined as Asset Performance Management (APM), obliges asset managers to find tools and processes to organize and exploit data to refine maintenance—not just for specific fleets, but also for individual assets.

Though the accumulation of challenges may seem insurmountable, putting careful thought into the design of enterprise asset management (EAM) systems and processes makes it all manageable.

Legacy system weaknesses

Fundamentally, EAM needs to become less introverted and more externally focused. This will empower organizations to deliver on their “Moments of Service”—the term IFS uses to describe the critical moments that define the success of the asset manager’s customer relationships. It involves organizing your processes, logistics, skills, and resources to be what your customer needs you to be in that moment.

To determine your system’s adequacy to deliver in the Moment of Service, consider the following questions:

  • Does your EAM know what your customer’s needs and values are? It is paramount to understand the link between the assets and the metrics and strategies of the firm to build value.
  • Does the system deliver actionable data? IoT and data science are revolutionary, but the key lies in the ability to interpret the data to improve the business.
  • Does your EAM support collaboration? When working with multiple stakeholders, such as operators, customers, vendors, remote staff, on-site staff, and contractors, quality insights and analytics need to be delivered without undermining security.
  • Is your EAM agile enough to be configured and reconfigured as needed if your firm grows or gets smaller? It needs to adapt with your business as it expands, separates, or requires a new process to be built.
  • Is the system broad enough to encompass your needs, or will it require purchasing other systems to fill the gaps? Processes such as project management, scheduling and dispatch, and customer engagement have been known to be underserved by EAM.
  • Does the system provide your engineers with data that will help them develop asset management strategies? It needs to deliver the outcomes that owners and internal and external customers care about.

The overarching concern is that when organizations implement many different systems, it becomes incredibly challenging to manage collaboration between all of them. After 40 years of EAM being a category of software, it is still very siloed, which typically forces customers to implement solutions from several software vendors. Not only does this cause issues with integration, but it also puts financial strain on the organization.

Today, there are a multitude of ways to approach modernization. Among them are swapping out many systems at once, selecting the most aged systems first, or tackling the systems with the largest user population first. Every firm is different and there is not one right answer.

One example solution, IFS Cloud EAM, is designed to be as much or as little as a client needs it to be. It is as open and flexible as possible while having the functionality normally attributed to tens of systems. Its 16,000 open APIs translate to 16,000 individual functions that can potentially be attached to a client’s systems, all controlled from a graphical process modeler. Rollout is focused on the client’s unique requirements and playing well with the other systems in the client’s architecture, thereby improving their business with the right scope and at the right pace for them.

Modernization pays off

Being efficient pays off internally through cost reductions and externally through higher customer satisfaction. For instance, when organizations can schedule mobile workers better, they gain valuable time. When organizations can remedy a problem 14% faster, they avoid penalty payments. When organizations can successfully streamline a process, they reduce internal costs.

An IDC audit of IFS EAM customer benefits found an average of $4.2M productivity gains in administration. Other gains included an increase of tens of millions of dollars in sales, 14% faster order lifecycle, and 28% more orders completed overall. These results validate how predictive, preventive, and customer care capabilities adds value. Recently, IFS won the business of a global maintenance firm with over 3,500 engineers on a simple premise: enabling them to complete one more job, per day, per technician. Their board saw huge value in that result and it is a goal IFS sets for all its customers.

The time for modernization has come. Developing your Moment of Service with a modern asset management solution tailored to your needs will help you to stand up to the challenges of changing business models, economic forces, and asset management practices.

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