What is Enterprise Asset Management (EAM)?
Enterprise Asset Management (EAM) is the management of all the physical and financial assets within an organization. These assets are monitored throughout their lifecycle to ensure each is maintained in the most effective way. Recently, Vantage Market Research projected the EAM market will hit $5374.1 million USD by 2028, growing at a Compound Annual Growth Rate (CAGR) of 8.5%.
Implementing EAM within companies will be a huge factor in their future growth and financial success moving forward. Gone are the days of segmented and compartmentalized management that slows workflow, lacks communication between departments, and lowers customer satisfaction. A central location to monitor work functions is the new best-practice form of management that is here to stay.
The Benefits of Utilizing EAM
Monitoring the assets within a large organization is incredibly challenging, especially when monitoring is done manually and workflows are segmented. EAM solves many challenges and allows monitoring to be done within one central location. Effective monitoring will allow for efficient operations, service levels, and high levels of customer satisfaction for your business.
EAM software can help monitor all of your assets in real-time. It tracks supply chains, work orders, and contracts workflows, and will help to improve collaboration among various teams. Ensuring that these processes are thorough and accurate through the data and analysis process and making changes, where it’s needed, can save your company valuable time and money.
Key Components of EAM
There are 7 key components within EAM. They include Work Management, Asset Management, Labor Management, MRO (Maintenance, Repair, Operations) Management, Contract Management, Analytics and Reporting, and Financial Management. Each element is essential to the success of a company and each one can be successfully managed through EAM software.
Work management consists of necessary activities required to manage assets. This includes maintenance requests, schedules for planned maintenance, and coordination of schedules between different teams. One of the greatest components within EAM is work order management, which not only ensures that maintenance is completed when necessary but also simplifies schedule coordination. Having scheduling for multiple departments in one place ensures there are no overlaps or scheduling errors that can cause delays in maintenance or repairs.
Improperly managing and maintaining assets can lead to supply issues, downtime for unplanned maintenance, and inferior performance; so proper management is essential for a proper business function.
Asset management, or asset lifecycle management within EAM, is the process of managing all areas of the lifecycle in one location. Traditional forms of management require different teams to track assets on spreadsheets or different software which is segmented and inefficient.
Tracking within EAM allows the streamlining of processes and improves communication between teams. One central software tracks everything from procurement and acquisition, to maintenance and everyday operation of assets, and to the disposal of assets at the right time. This improves efficiency, saves money, and increases success.
Labor management is the process of tracking and managing all components within the labor force. Proper tracking within this area saves money and extensively reduces the burden on HR, management, and compliance employees.
An EAM system stores information regarding hiring, scheduling, training, certification, and licensure in one location. This ensures simple changes in work schedules and effective training is done in a timely manner and eases the burden of future audits.
MRO (Maintenance, Repair, Operations) Management
MRO management is the process of managing the inventory necessary to create, manage and maintain assets. EAM allows supply chain management to be done in a central location which streamlines the process.
MRO controls purchasing, stock, and spare parts, and estimates the demands for material procurement/inventory, as well as the material necessary to maintain equipment such as additional parts and lubricants. The proper management of assets is essential to efficient processes and ensures supply and demand are equal.
Contract management is the process of managing every contract necessary for business functions. Companies manage contracts with clients, vendors, business partners, and even employees. Traditionally, these have been managed by different departments depending on their purpose and who the contract is for. This again has created a fragmented system that is hard to track and expensive to maintain.
EAM software allows all contracts to have a central location and includes additional details to help with compliance such as financial agreements and payment information. A strong contract management procedure can help with payments and invoice accuracy and speed.
Analytics and Reporting
Analytics and reporting are often underutilized but contain amazing tools to help grow business, streamline processes, and create successful companies. EAM allows you to see your operations through a variety of reports through a central location.
Analytics reports help improve processes by keeping track of key performance indicators (KPIs) within your industry and help identify and correct issues early on. Custom reports and dashboards can be built to track specific areas or measures and contribute to process improvement.
Financial management is the process of monitoring expenditures across all departments and is essential for tracking and maintaining financial goals that lead to success.
EAM compiles all financial data from each department and puts it in an accessible central location. Not being tasked with going through spreadsheets or multiple software allows finance departments to focus on more important things than tracking down missing line items from expense reports.
What EAM Software is Right for My Company?
When considering the type of software that is right for your company, there are many things to consider.
Cloud-based software has reduced upfront costs and easy implementation, but may leave fewer options for customization. Also, because it’s not housed on internal servers, security is handled by the software provider rather than the company, which could pose audit risks if not contained properly.
In-house software has increased upfront costs because infrastructure must be held on-site. However, security can be built to meet company needs. Customization may still be limited but can have some flexibility depending on the software.
Listing out your needs is the first step to ensuring you find the best EAM software that meets all requirements.
How to Make EAM Successful:
- Ensure a Successful Integration: Once you have selected the software that best meets your needs, you want to ensure that it will integrate with existing software you plan to continue to utilize such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), accounting, and maintenance. This is essential for successful implementation.
- Ensure User-Friendly Access Across All Devices: Regardless of the software you choose, it must be successfully installed and used on the various devices your employees use in the workforce. It’s best to be sure it can be operated on devices such as computers, tablets, and smartphones (both Apple and Android).
- Take Advantage of Analytics for Process Improvement: EAM software is built to improve processes and efficiencies, but just implementing software will not necessarily make this instantly possible. Learn what the analytics capabilities are, determine what KPIs you plan to track, and utilize the data to identify weaknesses, implement changes and use the data to measure success.