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Why asset management software is more important than ever
Doing more with less has long been important -- but in the last couple of years, the idea has taken on new relevance. Learn how asset management software can help.
In the last couple of years, business and technology leaders have reevaluated their priorities and one thing has come to the fore: They can't take for granted what they have.
To this point, asset management software offers details that organizations can use to better maintain and optimize machines, vehicles and other equipment. More companies are turning to asset management software due to factors such as COVID-19 constraints and interest in climate action.
"I think the big interest at the moment is around better uses of finite resources," said Paul Miller, principal analyst at Forrester Research.
That applies to expensive machinery, the energy those machines consume, and the raw materials that go into maintaining them and keeping them operational, Miller said.
Asset management software has also proven more crucial than ever for companies during the COVID-19 pandemic because in-person oversight and tracking of assets became problematic, Miller said. Many organizations switched to fully remote work or operated facilities with only skeleton crews. Assets that companies once monitored using old-school paper-based methods or simple spreadsheets fell out of use. Even systems with a certain degree of automation had problems managing their assets, increasing the risk of higher operational expenses or reduced revenues.
A need to better manage assets
Asset management software can help companies get ahead of these problems. For example, software can provide an alert when equipment needs servicing, in turn preventing breakdowns and associated downtime.
Asset failure can result in significant impacts, said Nicole Foust, senior principal analyst at Gartner. These include environmental disasters such as oil spills and wildfires, property loss, service loss, unmet customer expectations and even loss of life. Asset failure can also affect the company's ability to provide products and services.
This is especially true for asset-intensive companies.
"These organizations may also be subject to industry or regulatory policies, which, if unmet, can carry penalties," Foust said.
Other drivers prompting companies to turn to asset management software include climate issues, aging assets, and infrastructure and sustainability concerns.
Organizations invest in asset management tools and technologies to reduce unplanned repairs, as well as planned but unnecessary repair work; improve asset availability, reliability and safety; minimize maintenance costs; and reduce the risks of critical assets failure, Foust said.
A wide range of assets can benefit from asset management software, from the micro to the macro. On the larger end are the obvious capital-intensive assets such as containerships, aircraft, vehicles, construction equipment, buildings and machinery used in manufacturing or process industries.
On the micro level, asset management turns into inventory management at some point, when components by themselves are largely elements to be used or consumed. But little things can matter: In a healthcare setting, for example, non-disposable surgical tools may count as an asset.
On an accounting level, assets are things with economic value that can provide a future benefit and that finance teams potentially report on a company's balance sheet.
Types of companies that use asset management software
Some industries are particularly reliant on asset management software.
Business and operation capabilities drive certain organizations to invest more heavily in the tools and technologies that support asset management and maintenance, Foust said. Without such software, organizations could easily lose sight of assets entirely. Here are some examples of the types of organizations that particularly rely on asset management software and the assets that drive that use:
- Construction companies. Companies that build, manufacture and repair structures require a vast array of equipment. This includes cranes, earth movers, dump trucks, flatbed trailers, staging, trenching equipment, mixers, heaters, portable sanitation equipment and power tools.
- Healthcare organizations. Asset management software can help medical organizations track the existence, condition and whereabouts of key devices and equipment to ensure timely and quality patient care.
- Oil and gas companies. Particularly critical in the oil and gas fields is proper and timely maintenance of equipment and infrastructure, both to ensure reliable and profitable operations and to avoid environmental and personnel risks.
Other examples include manufacturing, mining and natural resource extraction, telecom operators, transportation and facilities management.
"For these industries, asset management success impacts the bottom line directly," Foust said.
Common types of asset management software
Different types of asset management software exist, and software buyers will need to understand their differences.
EAM and CMMS
Enterprise asset management (EAM) and computerized maintenance management systems (CMMS) are two common categories of asset management software. The difference between EAM and CMMS essentially comes down to a focus on computerizing asset management versus a more comprehensive oversight. In a nutshell, EAM software is the more comprehensive system, fully managing capital assets across their entire lifecycle, from procurement through to disposition. In comparison, a CMMS is a smaller-scale technology that focuses primarily on maintenance.
Both types of software support maintenance, Foust said. Organizations can use them to help maintain various corporate assets, including the following:
- fixed plant assets, such as manufacturing equipment and oil refineries;
- linear assets, such as power lines, railways and pipelines; and
- mobile and fixed fleet assets, such as service equipment, rail cars, locomotives, trucks, transformers, pumping stations and wind generation machinery.
Asset performance management (APM) software offers advanced maintenance decision support to optimize asset reliability and operation, Foust said. APM uses data integration, analytics and visualization to improve maintenance decisions and to identify when to perform maintenance and inspection activities on which industrial assets. APM products provide capabilities and functionality for advanced maintenance needs, supporting asset strategy, risk management, predictive maintenance, reliability-centered maintenance and financially optimized maintenance activities.
Asset investment planning (AIP) is a capital planning decision support tool that asset-intensive and asset-centric industries use to create capital investment plans for assets over extended time frames, Foust said. AIP systems analyze data from EAM systems, APM software and other tools -- primarily concerning asset conditions, maintenance costs, criticality, budgets and risks -- to produce capital investment plans. These plans usually go beyond current budget cycles and can extend 20, 30 or even more than 40 years out.