Head in the cloud: How disruptive technologies are affecting your plant

April 15, 2015
In this Big Picture Interview, Dan Miklovic explores asset performance management and the cloud.

Dan Miklovic is principal analyst with LNS Research. He is the author of LNS' Best Practices Guide: Asset Performance Management, and his primary focus is research and development in the asset and energy management practices. Dan has more than 40 years of experience in manufacturing IT, R&D, engineering, and sales across several industries, as well as more than 20 years of industry experience at companies such as Emerson Electric, Mallinckrodt Chemical, Weyerhaeuser, and Scott Products, as well as several consulting companies and software provider Aspen Technology.

PS: Are cloud technologies having a disruptive effect on asset management and condition monitoring?

DM: For asset management, rather than having a disruptive influence, current cloud technologies are continuing to place evolutionary pressure on the more EAM/CMMS and other work- and inventory management-related asset management activities. Clearly the new cloud services are continuing to put downward pressure on delivery costs, making these types of solutions always more affordable.

On the EAM/CMMS side, the takeup rate is still less than 15% of the overall new implementations. That said, we have to remember that hosted/SaaS/cloud CMMS/EAM has been available for about 20 years, so the customer base is growing.

When it comes to condition monitoring, cloud is poised to have a transformative effect, although we probably haven’t seen the biggest impact yet. What we are seeing as early developments are a number of smaller specialized condition-based maintenance and reliability-centered maintenance (CBM/RCM) predictive analytics, usually by industry, start to enter into the market as alternatives to the bigger players, such as Predikto.

At the same time, bigger players like Meridium with their Asset Answers solution are showing the real potential of cloud in drastically changing the way we could think about reliability benchmarking going forward.

PS: Where there is reluctance to adopt cloud technologies, what are some key reasons for it?

DM: Many factors have slowed adoption. Asset performance management (APM) at the CBM level and even CMMS/EAM levels have been more operations-centered than IT-centered, unlike ERP or CRM, so the CIO has had less impact on the decisions by maintenance of whether to move to the cloud. Also, the idea of trusting a “software company” with your data hasn’t been popular.

The other big factor is that management is afraid of maintenance in the sense that they view it as a cost center, and the IT part of it is what they need to pay to keep the plant running, so CFOs and senior management have been reluctant to force maintenance to look at cheaper and better ways to support getting their job done.

PS: When there is enthusiasm and buy-in from customers, what are the reasons?

DM: Reasons include cost, speed to implementation, no need for IT support, accessibility from anywhere, best-in-class performance relative to a customer's individual needs, and an “always up-to-date” application.

When it comes specifically to SMB customers, I would add security to that list of benefits. With Amazon AWS and Microsoft Azure, the vendors offering APM solutions, in all categories, can offer better security than previously available. Unless you are a big enough company to afford your own IT group (which then has a strong security group), what you get in AWS or Azure or one of the other emerging platforms is going to be far better. SAP and Oracle are examples of companies that also can provide cloud-based solutions and still give you security, and they themselves will even provide the application(s).

PS: Given the comfort level of the Millennial generation with digital technologies, do you think cloud-based solutions are a better fit for these workers than more-mature CM/EAM technologies?

DM: Cloud solutions simplify mobility which helps with digital natives – they expect access anywhere at any time and cloud enables that. The other thing about digital natives is that they don’t tolerate bad apps. Cloud-based solutions evolve with frequent and regular fixes and upgrades just like their other apps, so they are more appealing than something that only changes every few years despite all its issues.