The pros and cons of enterprise-wide asset management and the silo approach

May 10, 2011
David Berger, P.Eng., contributing editor, explores the differences between integrated asset management and asset classes.

In brief:

  • As technology improves, assets are getting smarter and are therefore more easily integrated and centralized.
  • The need for specialized knowledge across traditional silos is pushing companies to think more strategically about how to maintain assets.
  • Once maintenance processes are standardized, it’s critical to consider the functionality of CMMS packages that best support those processes.
  • When every asset class is maintained under one roof, there’s a potential clash of priorities.
  • Consider the quantity and skill sets of maintenance resources when determining the optimal degree of centralization.

Most companies manage a wide range of asset types. Historically, this has been done by clustering assets into logical groupings commonly referred to as “asset classes.” There are five asset classes, namely, plant equipment; facilities; mobile equipment or fleet assets; infrastructure such as roads, bridges and pipes; and IT assets. Many companies have someone responsible for the maintenance of each asset class, depending on the number and complexity of assets in that class. Others take a more integrated or enterprise-wide approach with most or all asset classes managed by a single maintenance group. Here are the pros and cons for each approach, as well as options in between.

Enterprise approach

The fully integrated enterprise model for asset management is emerging as follows for a number of reasons. First are the smarter assets. As technology improves, assets are getting smarter and are therefore more easily integrated and centralized. This allows an enterprise-wide perspective on every asset class. Mobile equipment, for example, has GPS tracking devices and computer-based diagnostics onboard, so that asset location and condition can be monitored or even controlled. Similarly, facilities have building monitoring systems, as well as systems for fire, security and so on. Infrastructure assets can be monitored using SCADA and advanced inspection equipment. Finally, plant equipment and IT assets have for many years been heavily automated, oftentimes using centralized control rooms.

The second reason is specialized knowledge. The factor changing our silo mentality regarding asset classes is the need for specialized knowledge. True, one can argue that maintaining a computer requires technical skills found exclusively in the IT department, and maintaining, say, doors of a building requires traditional carpentry or locksmith skills within the facilities maintenance department.


But in today’s more technologically advanced world, who should maintain the computerized lock and security systems that monitor and control every access point and door locks — facilities or IT? And who is responsible for maintaining high-security doors within a data center — facilities or IT? Similarly, who should look after security systems or emergency exit door alarms in a manufacturing plant — plant maintenance, facilities or IT? These are but a few examples of how the need for specialized knowledge across traditional silos is pushing companies to think more strategically about how best to maintain assets throughout the enterprise, regardless of asset class.

The third reason is a need for productivity improvement. A factor influencing the integration of asset class silos is the ever-increasing drive most companies experience as they obtain greater levels of efficiency and effectiveness. One way to increase productivity is to develop and implement common processes that transcend traditional asset class silos. For example, is there really a difference in how PMs are planned and executed for plant equipment, a forklift truck, flooring or playground equipment?

Work order initiation, work execution, planning and scheduling, spare parts inventory management and other key processes can be standardized with allowances for acceptable variations in asset class, asset type and location. For example, PMs for snow removal and grass cutting will differ depending on whether you are based in the south or the north.

The fourth reason is CMMS functionality. Once maintenance processes are standardized, it’s critical to consider the functionality of CMMS packages that best support those processes. For two decades, CMMS vendors have been working on enterprise solutions that cross the boundaries of asset classes. This is true for both best-of-breed and ERP systems. The more comprehensive CMMS packages have functionality relevant for each asset class as part of an integrated solution.

Thus, companies can configure most modern CMMS packages to manage every asset class centrally with a high degree of integration, or to manage separately individual plants, locations, lines of business, cost centers, asset classes or other logical groupings. There are, of course, many configuration options between these two ends of the spectrum.

Although the depth and breadth of features varies from one CMMS package to another, most leading packages cover a large portion of the needs of every asset class because there are a growing percentage of common features relevant to more than one asset class. Any unique features associated with one asset class seem to prove useful to maintenance personnel managing other asset classes. The following are some examples of this growing trend.

  • PM routing was a feature originally associated with CMMS vendors specializing in facilities maintenance, but the feature was quickly adopted by maintenance management responsible for plant equipment and infrastructure.
  • Maintenance technicians of both plant equipment and infrastructure value calibration functionality.
  • Campaigns and recalls are useful features to both fleet and plant maintenance shops.
  • GIS integration and mapping capability benefits maintenance departments responsible for infrastructure (linear assets) or multiple facilities.
  • Service or help desk functionality is important to managers of both IT and facilities assets.

Sometimes CMMS vendors choose to handle features unique to a given asset class through creative workarounds or integration with third-party software.

A fifth reason is organizational design considerations. To build on common processes and systems for integrating asset classes, the organizational structure and design principles should provide an enterprise perspective. Some companies have a centralized structure wherein one group is responsible for maintenance of every asset regardless of class. Other companies use a distributed approach in which there’s a small central maintenance group providing thought leadership, policies, standard procedures and systems support, as well as separate groups handling the maintenance of each asset class or every asset at a given location. These separate, distributed groups are physically located in the field, but have either a solid line reporting relationship to the central maintenance group and dotted line to local management, or vice versa.

Silo approach

There’s a counter argument to centralizing the maintenance function across asset class silos. Although the following two factors should by no means negate the need for some level of centralization, standardization, coordination and integration, they nonetheless should be considered before jumping on a fully centralized, enterprise-wide asset management model.

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First is prioritization. When every asset class is maintained under one roof, there’s a potential clash of priorities. For example, if there’s one central maintenance function at an airport, and a light on the runway is out or the baggage system needs repair, what level of priority would be given to a ripped carpet, plugged toilet or damaged sign? Work related to facilities will almost always take a back seat to work on airside equipment. If there was a separate facilities maintenance group, it could focus on maintaining facility assets to the satisfaction of customers, employees, retail vendors and others. Under this scenario, some functions can still be centralized such as common policies, standard procedures and a shared CMMS.

Then, there’s the jack of all trades, master of none. A key factor to consider when determining the optimal degree of centralization is the quantity and skill sets of maintenance resources required to do the work. In many manufacturing plants, for example, plant maintenance looks after facilities, mobile equipment and infrastructure. The temptation is to make technicians into jacks of all trades who are responsible for a wide range of asset types. To prevent this, some companies outsource maintenance of various asset classes. In companies where there are sufficient economies of scale, separate groups might be established for each asset class, such as facilities maintenance responsible for maintaining the building envelope of every facility the company owns, including the production facilities. Regardless, various functions such as common processes and a common CMMS still can be centralized and integrated.

Email Contributing Editor David Berger, P.Eng., partner, Western Management Consultants, at [email protected].