Enterprise Asset Management
Encyclopedia
Enterprise asset management (EAM) means the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant
, equipment and facilities. "Enterprise" refers to the management of the assets across departments, locations, facilities and, in some cases, business units. By managing assets across the facility, organizations can improve utilization and performance, reduce capital cost
s, reduce asset-related operating costs, extend asset life and subsequently improve ROA (return on assets).
The functions of asset management are taking a fundamental turn where organizations are moving from historical reactive (run-to-failure) models and beginning to embrace whole life planning, life cycle costing, planned and proactive maintenance and other industry best practices. Some companies still regard physical asset management as just a more business-focused term for maintenance management - until they begin to realize the organization-wide impact and interdependencies with operations, design, asset performance, personnel productivity and lifecycle costs. This shift in focus exemplifies the progression from maintenance management to Enterprise Asset Management and is embodied in the British Standards specification PAS 55
(Requirements specification for the optimal management of physical infrastructure assets). See Institute of Asset Management
.
Enterprise asset management
is the business processes and enabling information systems that support management of an organization's assets, both physical (such as buildings, equipment, infrastructure etc.) and non-physical such as:
It is thus important for organizations to maximize the return on investment from their asset base. Life Cycle Asset Management (LCAM) and EAM are paradigms employed to achieve that goal.
Given a physical asset, the objective of LCAM is to extract maximum productivity from the asset and minimize the total costs involved in its acquisition, operations as well as maintenance. Quantitatively, the objective of asset management is to strike an optimal balance between maximizing Overall Asset Productivity (OAP) and minimizing Total Cost of Ownership (TCO). Furthermore, LCAM provides guidance on whether it is more cost-effective to continue to maintain, overhaul or replace a failing asset.
When the entire asset portfolio of the organization is considered, EAM takes over. As business and market requirements are dynamic, the output specifications for the organization’s assets change constantly (e.g., increase in output capacity due to new customers). EAM provides the framework for capital and labor allocation decision processes across the competing categories of equipment addition/ reduction, replacement, over-hauling, redundancy setup and maintenance budgets in order to meet business needs. Correspondingly, it merges the collective LCAM efforts and re-evaluates decisions based on long and short-term economic considerations at the enterprise level.
Public asset management expands the definition of Enterprise Asset Management
(EAM) by incorporating the management of all things which are of value to a municipal jurisdiction and its citizen’s expectations. An EAM requires an asset registry (inventory of assets and their attributes) combined with a computerized maintenance management system
. Public Asset Management is the term that considers the importance that public assets affect other public assets and work activities which are important sources of revenue for municipal governments and has various points of citizen interaction. The versatility and functionality of a GIS system allows for the control and management of all assets and land-focused activities. All public assets are interconnected and share proximity, and this connectivity is possible through the use of GIS. GIS-centric public asset management standardizes data and allows interoperability, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner by making the GIS geo-database the asset registry.
In the United States the defacto GIS standard is the ESRI
GIS for utilities and municipalities. An ESRI GIS platform combined with the overall public asset management umbrella of both physical “hard” assets and “soft” assets helps remove the traditional silos of structured municipal functions which serves the citizens. While the hard assets are the typical physical assets or infrastructure assets, the soft assets of a municipality includes permits, license, code enforcement, right-of-ways and other land-focused work activities.
This definition of “public asset management” was coined and defined by Brian L. Haslam, President and CEO of a leading International ESRI GIS-centric Computerized Maintenance Management System (CMMS) company located in Utah
whose software is certified by the National Association of GIS-Centric Solutions (NAGCS). GIS-centric public asset management is a system design approach for managing public assets that leverages the investment local governments continue to make in GIS and provides a common framework for sharing useful data from disparate systems. Permits, licenses, code enforcement, right-of-way, and other land-focused work activities are examples of land-focused public assets managed by municipal governments. These public assets occupy location just as in-the-ground or above-ground public assets do. Land-use development and planning is another area which is interconnected to other local government assets and work activities.
ITEAM focuses on both hardware and software asset management, ensuring that the organization has the ability to manage these assets throughout their life. In the case of software, there is the added component of ensuring license compliance.
See the International Association of IT Asset Managers (IAITAM)http://www.iaitam.org for more details.
(SLM).
In the event of asset failure, quick response time is critical. In recent years, stringent industry-specific environmental health and occupational safety regulations are being enforced by government oversight agencies, with industrial owners and operators responsible for compliance. Asset registers, risk registers, work planning and scheduling, life cycle costing and systematic methods for problem identification, root cause analysis and continuous improvement are increasingly seen as prerequesites for a robust asset management system.
By providing a platform for connecting people, processes, assets, industry-based knowledge and decision support capabilities based on quality information,EAM provides a holistic view of an organization's asset base, enabling managers to control and optimize their operations for quality and efficiency.
EAM systems are often not integrated with the rest of the company's enterprise systems (including purchasing, HR, inventory, etc.), which increases management overhead and prevents the organization from realizing the system's full potential.
can be leveraged to improve dispatch processes. Traditionally, work order dispatch relies on an antiquated, paper-based system. This process is cumbersome because technicians are required travel back-and-forth between work sites and the dispatch center for new assignments. With mobility, technicians can receive their assignments in the field, spend more time working, and create work orders right on their devices.
Also, companies have been using mobility to allow their technicians to access EAM information while on-site. Mobile technology lets technicians view more EAM relevant data. As a result of this increased access, technicians are better prepared to service assets when they require maintenance, service, or inspection.
Finally, with mobile technology, field technicians have the ability to capture more, and better quality, EAM data. Improved data capturing processes allow for better analysis and evaluation; as a result, companies are quickly embracing mobile solutions. With the many uses for mobility, the EAM solution market has seen steady growth over the last few years. Commonly sought providers have solutions that enterprises deploy based upon factors, such as: ease of configurability, integration with back-end systems, cost, features, availability of support, etc. As companies continue to mobilize their EAM processes, the market is expected to continue expanding.
HEAM provides complete visibility of the asset base across the health system, enabling active control of the planning, acquisition, tracking, maintenance and retirement of capital assets.
(EAM) by incorporating the management of all things which are of value to a municipal jurisdiction
and its citizens' expectations.
An EAM requires an asset registry (inventory of assets and their attributes) combined with a Computerized Maintenance Management System
. All public assets are interconnected and share proximity, and this connectivity is possible through the use of GIS.
GIS-centric public asset management standardizes data and allows interoperability, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner by making the GIS geo-database the asset registry. A GIS-centric public asset management which standardizes data and allows interoperability
, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner.
In the United States the defacto GIS standard is the Esri
GIS for utilities and municipalities. An Esri GIS platform combined with the overall public asset management umbrella of both physical “hard” assets and “soft” assets helps remove the traditional silos of structured municipal functions. While the hard asset
s are the typical physical assets or infrastructure assets, the soft assets of a municipality includes permits, license, code enforcement, right-of-ways and other land-focused work activities.
This definition of “public asset management” was coined and defined by Brian L. Haslam, President and CEO of a leading international GIS-centric Computerized Maintenance Management System (CMMS) company which software is certified by the National Association of GIS-Centric Solutions (NAGCS). GIS-centric public asset management is a system design approach for managing public assets that leverages the investment
local governments continue to make in GIS and provides a common framework for sharing useful data from disparate systems. Permits, licenses, code enforcement, right-of-way, and other land-focused work activities are examples of land-focused public assets managed by local government
. These public assets occupy location just as in-the-ground or above-ground public assets do.
Land-use development and planning is another area which is interconnected to other local government assets and work activities. Public Asset Management is the term that encompasses this subset of land-focused asset management, considering the importance that public assets affect other public assets and work activities and are important sources of revenue
and are various points of citizen interaction.
Physical plant
Physical plant or mechanical plant refers to the necessary infrastructure used in support and maintenance of a given facility. The operation of these facilities, or the department of an organization which does so, is called "plant operations" or facility management...
, equipment and facilities. "Enterprise" refers to the management of the assets across departments, locations, facilities and, in some cases, business units. By managing assets across the facility, organizations can improve utilization and performance, reduce capital cost
Capital cost
Capital costs are costs incurred on the purchase of land, buildings, construction and equipment to be used in the production of goods or the rendering of services, in other words, the total cost needed to bring a project to a commercially operable status. However, capital costs are not limited to...
s, reduce asset-related operating costs, extend asset life and subsequently improve ROA (return on assets).
The functions of asset management are taking a fundamental turn where organizations are moving from historical reactive (run-to-failure) models and beginning to embrace whole life planning, life cycle costing, planned and proactive maintenance and other industry best practices. Some companies still regard physical asset management as just a more business-focused term for maintenance management - until they begin to realize the organization-wide impact and interdependencies with operations, design, asset performance, personnel productivity and lifecycle costs. This shift in focus exemplifies the progression from maintenance management to Enterprise Asset Management and is embodied in the British Standards specification PAS 55
PAS 55
PAS 55 - Optimal management of physical assets is a Publicly Available Specification published by the British Standards Institution.This PAS gives guidance and a 28-point requirements checklist of good practices in physical asset management; typically this is relevant to gas, electricity and water...
(Requirements specification for the optimal management of physical infrastructure assets). See Institute of Asset Management
Institute of Asset Management
The Institute of Asset Management, known usually as the IAM, is an international, not-for-profit organisation and learned society, currently based in the United Kingdom...
.
Enterprise asset management
Enterprise Asset Management
Enterprise asset management means the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities...
is the business processes and enabling information systems that support management of an organization's assets, both physical (such as buildings, equipment, infrastructure etc.) and non-physical such as:
- Physical asset management: the practice of managing the whole life cycle (design, construction, commissioning, operating, maintaining, repairing, modifying, replacing and decommissioning/disposal) of physical and infrastructure assets such as structures, production and service plant, power, water and waste treatment facilities, distribution networks, transport systems, buildings and other physical assets. Infrastructure asset managementInfrastructure asset managementInfrastructure asset management is the integrated, multi-disciplinary set of strategies in sustaining public infrastructure assets such as water treatment facilities, sewer lines, roads, utility grids, bridges, and railways. Generally, the process focuses on the later stages of a facility’s life...
expands on this theme in relation primarily to public sector, utilities, property and transport systems. - Fixed assets managementFixed assets managementFixed assets management is an accounting process that seeks to track fixed assets for the purposes of financial accounting, preventive maintenance, and theft deterrence....
: an accounting process that seeks to track fixed assets for the purposes of financial accounting. - IT asset managementIT asset managementIT asset management is the set of business practices that join financial, contractual and inventory functions to support life cycle management and strategic decision making for the IT environment...
: the set of business practices that join financial, contractual and inventory functions to support life cycle management and strategic decision making for the IT environment. This is also one of the processes defined within IT service managementIT Service ManagementIT service management is a discipline for managing information technology systems, philosophically centered on the customer's perspective of IT's contribution to the business. ITSM stands in deliberate contrast to technology-centered approaches to IT management and business interaction...
. - Digital asset managementDigital asset managementDigital asset management consists of management tasks and decisions surrounding the ingestion, annotation, cataloguing, storage, retrieval and distribution of digital assets...
: a form of electronic media content management that includes digital assets.
What is enterprise asset management?
In capital-intensive industries such as utilities, process/discrete manufacturing, healthcare as well as real estate, physical assets (buildings, infrastructure and equipment) form a significant proportion of the total assets of the organization. These industries face the harsh realities of operating in highly competitive markets and dealing with high value assets and equipment where each failure is disruptive and costly. At the same time, they must also adhere to stringent occupational and environmental safety regulations.It is thus important for organizations to maximize the return on investment from their asset base. Life Cycle Asset Management (LCAM) and EAM are paradigms employed to achieve that goal.
Given a physical asset, the objective of LCAM is to extract maximum productivity from the asset and minimize the total costs involved in its acquisition, operations as well as maintenance. Quantitatively, the objective of asset management is to strike an optimal balance between maximizing Overall Asset Productivity (OAP) and minimizing Total Cost of Ownership (TCO). Furthermore, LCAM provides guidance on whether it is more cost-effective to continue to maintain, overhaul or replace a failing asset.
When the entire asset portfolio of the organization is considered, EAM takes over. As business and market requirements are dynamic, the output specifications for the organization’s assets change constantly (e.g., increase in output capacity due to new customers). EAM provides the framework for capital and labor allocation decision processes across the competing categories of equipment addition/ reduction, replacement, over-hauling, redundancy setup and maintenance budgets in order to meet business needs. Correspondingly, it merges the collective LCAM efforts and re-evaluates decisions based on long and short-term economic considerations at the enterprise level.
Public asset management expands the definition of Enterprise Asset Management
Enterprise Asset Management
Enterprise asset management means the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities...
(EAM) by incorporating the management of all things which are of value to a municipal jurisdiction and its citizen’s expectations. An EAM requires an asset registry (inventory of assets and their attributes) combined with a computerized maintenance management system
Computerized Maintenance Management System
Computerized maintenance management system is also known as enterprise asset management and computerized maintenance management information system ....
. Public Asset Management is the term that considers the importance that public assets affect other public assets and work activities which are important sources of revenue for municipal governments and has various points of citizen interaction. The versatility and functionality of a GIS system allows for the control and management of all assets and land-focused activities. All public assets are interconnected and share proximity, and this connectivity is possible through the use of GIS. GIS-centric public asset management standardizes data and allows interoperability, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner by making the GIS geo-database the asset registry.
In the United States the defacto GIS standard is the ESRI
ESRI
Esri is a software development and services company providing Geographic Information System software and geodatabase management applications. The headquarters of Esri is in Redlands, California....
GIS for utilities and municipalities. An ESRI GIS platform combined with the overall public asset management umbrella of both physical “hard” assets and “soft” assets helps remove the traditional silos of structured municipal functions which serves the citizens. While the hard assets are the typical physical assets or infrastructure assets, the soft assets of a municipality includes permits, license, code enforcement, right-of-ways and other land-focused work activities.
This definition of “public asset management” was coined and defined by Brian L. Haslam, President and CEO of a leading International ESRI GIS-centric Computerized Maintenance Management System (CMMS) company located in Utah
Utah
Utah is a state in the Western United States. It was the 45th state to join the Union, on January 4, 1896. Approximately 80% of Utah's 2,763,885 people live along the Wasatch Front, centering on Salt Lake City. This leaves vast expanses of the state nearly uninhabited, making the population the...
whose software is certified by the National Association of GIS-Centric Solutions (NAGCS). GIS-centric public asset management is a system design approach for managing public assets that leverages the investment local governments continue to make in GIS and provides a common framework for sharing useful data from disparate systems. Permits, licenses, code enforcement, right-of-way, and other land-focused work activities are examples of land-focused public assets managed by municipal governments. These public assets occupy location just as in-the-ground or above-ground public assets do. Land-use development and planning is another area which is interconnected to other local government assets and work activities.
Professional bodies
Investment Recovery Association- Institute of Asset ManagementInstitute of Asset ManagementThe Institute of Asset Management, known usually as the IAM, is an international, not-for-profit organisation and learned society, currently based in the United Kingdom...
- National Property Management Association (NPMA)
- Asset Management Council
- Plant Engineering and Maintenance Association of CanadaPlant Engineering and Maintenance Association of CanadaThe Plant Engineering and Maintenance Association of Canada is a national, not-for-profit industry and technical association for plant and facility maintenance, reliability and physical asset management practitioners and professionals in Canada....
- American Water Works Association AWWA
- National Association of GIS-Centric Solutions NAGS
Information technology enterprise asset management
ITEAM differs from EAM only in its focus on IT assets. This focus is important for a number of key reasons:- Organizational dependence on these assets
- High cost, particularly of datacenter assets
- Rapid pace of change/turn-over for assets
ITEAM focuses on both hardware and software asset management, ensuring that the organization has the ability to manage these assets throughout their life. In the case of software, there is the added component of ensuring license compliance.
See the International Association of IT Asset Managers (IAITAM)http://www.iaitam.org for more details.
Why is EAM important?
Competitive pressures force organizations to minimize asset total cost of ownership and streamline their asset management operations (these typically involve myriad activities ranging from inventory, parts and labor management to contracts and vendor management for new works). As downtimes become increasingly expensive, both in terms of lost production capacity and unfavorable publicity, organizations are compelled to maximize their asset productive life cycles via optimal maintenance programs. When EAM is used in collaboration with all other forms of service-based operations to achieve better customer retention, it is called Service Lifecycle ManagementService lifecycle management
Service lifecycle management is defined by industry analyst firm AMR Research and described as a holistic approach which helps service organizations better understand the revenue potential by looking at service opportunities proactively as a lifecycle rather than a single event or series of...
(SLM).
In the event of asset failure, quick response time is critical. In recent years, stringent industry-specific environmental health and occupational safety regulations are being enforced by government oversight agencies, with industrial owners and operators responsible for compliance. Asset registers, risk registers, work planning and scheduling, life cycle costing and systematic methods for problem identification, root cause analysis and continuous improvement are increasingly seen as prerequesites for a robust asset management system.
By providing a platform for connecting people, processes, assets, industry-based knowledge and decision support capabilities based on quality information,EAM provides a holistic view of an organization's asset base, enabling managers to control and optimize their operations for quality and efficiency.
EAM System Challenges
EAM systems need a lot of high quality data to track and analyze the execution of business processes. Capturing data in the field using traditional paper forms and manually inputting it into the EAM system often turns out to be too expensive to be practical. This often slows adoption and erodes the ROI of many EAM deployments.EAM systems are often not integrated with the rest of the company's enterprise systems (including purchasing, HR, inventory, etc.), which increases management overhead and prevents the organization from realizing the system's full potential.
Role of Mobility Technology in EAM
Enterprises use mobility to improve their EAM system in a number of ways. First, mobilityMobility
Mobility may refer to:* Mobility * "Mobiliy" , a song by Moby* Mobility * Mobility , the ability of military units or weapon systems to move to an objective-See also:* Academic mobility* Apprentices mobility...
can be leveraged to improve dispatch processes. Traditionally, work order dispatch relies on an antiquated, paper-based system. This process is cumbersome because technicians are required travel back-and-forth between work sites and the dispatch center for new assignments. With mobility, technicians can receive their assignments in the field, spend more time working, and create work orders right on their devices.
Also, companies have been using mobility to allow their technicians to access EAM information while on-site. Mobile technology lets technicians view more EAM relevant data. As a result of this increased access, technicians are better prepared to service assets when they require maintenance, service, or inspection.
Finally, with mobile technology, field technicians have the ability to capture more, and better quality, EAM data. Improved data capturing processes allow for better analysis and evaluation; as a result, companies are quickly embracing mobile solutions. With the many uses for mobility, the EAM solution market has seen steady growth over the last few years. Commonly sought providers have solutions that enterprises deploy based upon factors, such as: ease of configurability, integration with back-end systems, cost, features, availability of support, etc. As companies continue to mobilize their EAM processes, the market is expected to continue expanding.
Healthcare enterprise asset management
Healthcare enterprise asset management (HEAM) presents complexities not found in most other industries. Specifically, healthcare environments have a large number of relatively small, mobile, expensive and sophisticated pieces of equipment. Further, the availability, maintenance and cleanliness of these assets directly impacts the "environment of care" and patient safety, as well as the bottom line. Finally, hospitals are highly regulated and assets must be maintained in a manner that complies with JCAHO and U.S. Food and Drug Administration (FDA) requirements. HEAM can include the following components related to assets:- Inventory and depreciation
- Scheduling of repair and maintenance
- Location and logistics (RFID or barcode powered)
- Availability and utilization
- Safety monitoring and incident tracking
- Total Lifecycle Cost
- Performance management
- Capital planning support
HEAM provides complete visibility of the asset base across the health system, enabling active control of the planning, acquisition, tracking, maintenance and retirement of capital assets.
Public asset management
Public asset management expands the definition of Enterprise Asset ManagementEnterprise Asset Management
Enterprise asset management means the whole life optimal management of the physical assets of an organization to maximize value. It covers such things as the design, construction, commissioning, operations, maintenance and decommissioning/replacement of plant, equipment and facilities...
(EAM) by incorporating the management of all things which are of value to a municipal jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
and its citizens' expectations.
An EAM requires an asset registry (inventory of assets and their attributes) combined with a Computerized Maintenance Management System
Computerized Maintenance Management System
Computerized maintenance management system is also known as enterprise asset management and computerized maintenance management information system ....
. All public assets are interconnected and share proximity, and this connectivity is possible through the use of GIS.
GIS-centric public asset management standardizes data and allows interoperability, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner by making the GIS geo-database the asset registry. A GIS-centric public asset management which standardizes data and allows interoperability
Interoperability
Interoperability is a property referring to the ability of diverse systems and organizations to work together . The term is often used in a technical systems engineering sense, or alternatively in a broad sense, taking into account social, political, and organizational factors that impact system to...
, providing users the capability to reuse, coordinate, and share information in an efficient and effective manner.
In the United States the defacto GIS standard is the Esri
ESRI
Esri is a software development and services company providing Geographic Information System software and geodatabase management applications. The headquarters of Esri is in Redlands, California....
GIS for utilities and municipalities. An Esri GIS platform combined with the overall public asset management umbrella of both physical “hard” assets and “soft” assets helps remove the traditional silos of structured municipal functions. While the hard asset
Hard asset
Hard Assets are investments with intrinsic value such as oil, natural gas, gold, farmland,natural colored diamonds and commercial real estate. Typically hard assets are an excellent inflation hedge. In general, commodities/hard assets are negatively correlated to both stocks and bonds. In other...
s are the typical physical assets or infrastructure assets, the soft assets of a municipality includes permits, license, code enforcement, right-of-ways and other land-focused work activities.
This definition of “public asset management” was coined and defined by Brian L. Haslam, President and CEO of a leading international GIS-centric Computerized Maintenance Management System (CMMS) company which software is certified by the National Association of GIS-Centric Solutions (NAGCS). GIS-centric public asset management is a system design approach for managing public assets that leverages the investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
local governments continue to make in GIS and provides a common framework for sharing useful data from disparate systems. Permits, licenses, code enforcement, right-of-way, and other land-focused work activities are examples of land-focused public assets managed by local government
Local government
Local government refers collectively to administrative authorities over areas that are smaller than a state.The term is used to contrast with offices at nation-state level, which are referred to as the central government, national government, or federal government...
. These public assets occupy location just as in-the-ground or above-ground public assets do.
Land-use development and planning is another area which is interconnected to other local government assets and work activities. Public Asset Management is the term that encompasses this subset of land-focused asset management, considering the importance that public assets affect other public assets and work activities and are important sources of revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
and are various points of citizen interaction.
See also
- Computerized Maintenance Management SystemComputerized Maintenance Management SystemComputerized maintenance management system is also known as enterprise asset management and computerized maintenance management information system ....
- Maintenance, Repair and OperationsMaintenance, Repair and OperationsMaintenance, repair, and operations or maintenance, repair, and overhaul involves fixing any sort of mechanical or electrical device should it become out of order or broken...
- Building lifecycle managementBuilding lifecycle managementBuilding lifecycle management or BLM is the adaptation of product lifecycle management -like techniques to the design, construction, and management of buildings. Building lifecycle management requires accurate and extensive building information modeling .-See also:*Computerized Maintenance...