Enterprise asset management
Enterprise asset management (EAM) means the whole life optimal management of the physical assets of an organization to maximize value.[clarification needed] 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 costs, 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 ISO 55000 (Requirements specification for the optimal management of physical infrastructure assets; sponsored by the 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:
- 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 management expands on this theme in relation primarily to public sector, utilities, property and transport systems.
- Fixed assets management: an accounting process that seeks to track fixed assets for the purposes of financial accounting.
- IT asset management: 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 management.
- Digital asset management: 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 (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 (CMMS). 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 de facto EAM standard is the ESRI GIS for utilities and municipalities. An 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 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.
Enterprise Asset Management 2.0 expands the definition of Enterprise Asset Management (EAM) even more to include not only physical assets used by a company or organization but it also includes all of the services and intangible assets. It is a method of cataloguing all a company's physical assets and services within a quadrant framework. The quadrant framework has two axes with the following endpoints:
Axis 1: Physical Assets to Virtual Assets This is obviously more of a dichotomy than a continuum, but it works well as an axis nonetheless.
Axis 2: Infrastructure to End-user
With these two axes, four distinct quadrants are realized:
End-users / Virtual Assets: These include all of the services and software used by your employees over the course of their daily work. Examples include Salesforce.com or Office365. End-Users / Physical Assets: These are all the devices used by individual end-users (most of whom do not belong to the IT department) to access the assets described in the above quadrant. Any items that can be physically counted and associated with an end-user (e.g., VPN tokens and smartphones) would be classified under this quadrant.
Infrastructure / Virtual Assets: With the growing pervasiveness of cloud computing, even physical servers no longer have to be confined to company premises. There are now virtual servers as well – i.e., virtual infrastructure. Effectively, this a case of assets being assigned to the company itself rather than any single end-user. This is obviously necessary – virtual infrastructure assets still need to be tracked and managed, and their costs must be accounted for. Beyond virtual servers, wireline or wireless contracts and specific software licences also belong in this quadrant. Infrastructure / Physical Assets: Of course, many businesses still deploy physical servers, among other “hard-copy” infrastructure assets. These can (and should be) physically counted and labelled. Because they serve a wide number of end-users, they are usually assigned to a department, branch, or even the entire company. This category encapsulates important items such as servers and PBX, but can also include more mundane objects like furniture.
- Investment Recovery Association
- Institute of Asset Management
- National Property Management Association (NPMA)
- Asset Management Council
- Plant Engineering and Maintenance Association of Canada
- American Water Works Association AWWA
- National Association of GIS-Centric Solutions NAGS
- Indian Association of GIS-Centric Asset and Security Management LYF
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) for more details.
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
|This section does not cite any references or sources. (June 2011)|
Enterprises use mobility to improve their EAM system in a number of ways. First, 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
||The examples and perspective in this U.S. may not represent a worldwide view of the subject. (December 2010)|
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 Management (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 A 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 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.
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.
- Baird, G. "Defining Public Asset Management for Municipal Water Utilities". Journal American Water Works Association May 2011, 103:5:30, wwww.awwa.org
- Physical Asset Management(Springer publication) Nicholas Anthony John,2010.
- Enterprise Asset Management 2.0