A Complete Guide To Enterprise Asset Management – What is EAM?

Controlling operational costs has to be a point of focus for any business, but especially for enterprises that have a big chunk of their capital tied in expensive physical assets and infrastructure. For them, the only way to efficiently deal with asset-related challenges is to implement EAM software and follow best enterprise asset management practices.  

What is not so obvious is the type of software to implement. Should they go with an EAM module, implement a CMMS system, or maybe even integrate both solutions with their existing ERP system? Finding an answer to this question requires an understanding of three things: 

1. what is EAM and what are its main functions
2. what EAM software offers compared to CMMS software
3. and what are your asset management needs  

The purpose of this guide is to help you navigate the space of enterprise asset management and EAM software, as well as to outline best practices you should follow, regardless of the vendor you go with.

Let’s start from the beginning.

What is EAM? 

EAM stands for Enterprise Asset Management, a set of processes and tools that enable companies to track and manage their physical assets (machines, equipment, buildings, and vehicles) throughout their lifecycle – from the moment they plan to purchase it to the moment the asset is disposed of. 

At its core, EAM is used to plan, optimize, execute, and track all maintenance activities with the associated priorities, skills, materials, tools, cost, and other information.

It’s a complete managerial resource with the aim of: 

• increasing performance and uptime of your physical assets
• extending their useful life
• reducing operational costs 
• boosting environment, health, and safety (EHS) initiatives
• streamlining all activities related to asset management through a centralized platform 

By investing in enterprise asset management, organizations can gain a reliable big picture perspective of their assets across locations, departments, and facilities, whether those assets are fixed or movable.

EAM can be used by all enterprise-level organizations, but it is most commonly applied in asset-intensive industries like utilities, manufacturing, energy, and construction. 

The key functions of enterprise asset management

Large organizations in asset-intensive industries can have thousands of assets that need to be taken care of. EAM helps such enterprises gain control of this kind of complex work environment and still maintain optimal levels of production, services, and operation. Enterprise asset management software aims to offer functionality that enables the following core functions to be executed properly.

Work management

Work management includes managing all planned and unplanned maintenance work. It covers the management of incoming maintenance requests, planning maintenance schedules, tracking work in progress, and coordinating maintenance work with outside contractors. This is why work order management is a core feature in every asset management software.  

Labor management

Organizing and tracking the assessment, training, and certification for different employees and contractors is the essence of labor management. As a feature in the EAM system, labor management also makes it easier to access, audit, and adjust work schedules, especially when the number of employees that needs to be coordinated grows to 3 or even 4 digits.

Supply chain and MRO management

EAM software comes with functionalities that greatly improve inventory and stock control procedures. It enables the control and monitoring of an enterprise’s supply chain,  covering areas like spare parts procurement, stock control, purchasing, estimating demand for materials, and making accurate inventory forecasts. Such inventory can range from cleaning supplies to machinery spare parts and lubricants (basically all maintenance, repair, and operations (MRO) inventory). 

Contract management

Asset management requires a lot of service contract management. There’s a need to create contracts with the company’s employees, partners, vendors, and customers, as well as oversee them to completion. That oversight includes tracking things like compliance and financial expenditures.

Asset lifecycle management

A key function of EAM is asset lifecycle management. It helps organizations to plan and streamline asset tracking and management at every stage of their lifecycle: 

• from developing a procurement strategy and commissioning the asset
• to maintaining and repairing asset throughout its useful life
• to cost vs replacement analysis and disposal

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Analytics and reporting

By incorporating EAM, organizations gain a full overview of their maintenance operations. Combined with an extensive array of reports, they have access to in-depth operational insights like:

• a summary of maintenance department’s activity in real-time
• use asset performance management to eliminate recurring problems and reduce unexpected downtime
• track a variety of key performance indicators (KPIs) and metrics to find the root cause of any major problem
• have a clear trail to track costs associated with every aspect of asset management (assets, parts, tasks, labor, downtime…) 

Financial management

Managing finance in the context of EAM means gathering data on spending across departments and forwarding that data to accounting to monitor expenses and project spending. By doing this, asset managers can more easily align their efforts with the organization’s financial goals.

The difference between EAM software and CMMS

It is true that CMMS and EAM software have many things in common, but they are not exactly the same.  

Computerized maintenance management systems (CMMS) are software solutions specifically designed and dedicated to automating and streamlining all tasks related to maintenance management.

EAM software covers all of that and builds upon it with additional functionality like tracking asset lifecycle, offering different accounting and finance management functionality, and more. It tries to take a more broad and holistic approach. 

In essence, CMMS can offer stronger core asset maintenance features, while EAM offers a wider range of functionalities. It’s like comparing a cyclist and a triathlon athlete. A person that does triathlons is good at three different sports, but will rarely beat a cyclist in a bicycle race.

One reason why it is so hard to draw a clear line between them is because both solutions have evolved significantly over the years and there are so many of them in the market. Depending on the exact two solutions you are comparing, you can find extreme scenarios where a comprehensive CMMS might offer more functionality than a barebone EAM solution. Your best bet is to make a list of features you need and look for software that matches your requirements.

Cloud-based vs on-premise software installation

Let’s quickly define both terms so everyone is on the same page.

Cloud-based solutions (often referred to SaaS – Software as a Service) are hosted on the vendor’s servers. The user doesn’t have to install anything and can immediately access the software through a web browser. You pay a monthly/yearly subscription fee to continue using the software. 

On-premise software has to be installed locally, on the company-owned internal servers. It is often done after acquiring a perpetual license, though it can still be subscription-based.

No matter which software (CMMS or EAM) you choose to implement, most vendors should be able to offer you both of these options. While the on-site implementation was a standard in the ERP industry for a long-time, businesses are moving to the cloud at an astounding pace. According to the 2020 report on the state of cloud computing, 93% of enterprises are already using multiple cloud-based solutions to execute their business services. 

There are still situations where on-premise implementation makes more sense, but decreasingly so. Here are a few reasons why businesses choose to keep everything on their internal servers:

• they want to have complete control over their business data and its security
• they already have an on-premise ERP system they want to integrate with
• they plan to buy a perpetual license for the EAM module because they need to heavily modify it to fit their unique manufacturing process

If you do not tick any of those boxes, you are better off going with a cloud-based system. 

For the sake of being thorough, let’s briefly discuss other factors that could impact your decision. Surprisingly, the cost isn’t one of them as the Total cost of ownership seems to converge over time:

The initial difference in cost between these two approaches reflects the higher implementation costs of the on-premise approach.

Here is another graphic that summarizes the main differences:

Before we wrap up this section, let’s also mention that these two approaches can be combined within an increasingly popular method called hybrid cloud implementation. Simplified, the company can make the software run on their own cloud servers. This comes with its own set of challenges, but can be a great solution for those who want the best of both worlds.

Enterprise asset management best practices

Software alone can’t be a solution to all of your problems. If you are looking to reduce operational costs and improve your profit margins, you need to have a strategic approach to asset management. There are many things to plan, track, manage, and control.

Let’s use this opportunity to discuss best enterprise asset management practices and point to particular areas that you should be focused on.

Look for the right software support

Effectively managing a large volume of assets simply can’t be done without proper software support. So much so that “the concept of enterprise asset management” and “EAM software” have basically become synonyms for each other.

Be it an EAM module or a CMMS, every enterprise organization needs to have software to manage their physical assets, labor, and inventory, as well as all associated costs that come with it.

Improve asset database and data capture

Detailed and up-to-date data presents the foundation for a strong enterprise asset management strategy. It is downright dangerous to exchange misinformation and make decisions based on inaccurate information.

When employing EAM software, it is paramount to ensure the data that is being entered into the system is correct and as up-to-date as possible. For an enterprise, that might mean developing and implementing a data strategy. 

One of the reasons why ERP, EAM, and CMMS software are gaining traction is because they serve as centralized digital platforms and eliminate data silos (situations where only one group of people has access to certain data).

Implement the right mix of maintenance strategies

The choice of your maintenance strategy decides, well, almost everything. It impacts the volume of routine and preventive work you need to perform, how much spare parts inventory you need to hold, the volume of unplanned vs scheduled downtime you need to contend with, and more.

In our opinion, the best approach is to implement a mix of different maintenance strategies. For example, you can use condition-based maintenance or predictive maintenance on expensive/critical assets and preventive maintenance for all other important assets. 

Every strategy comes with its own set of pros and cons. The final decision will depend on your available resources. One thing we can say for sure is that you should focus on proactive maintenance because the alternative is dangerous in more ways than one. 

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Standardize everything you can

The growth of an organization always comes with a linear increase of rules and guidelines that need to be followed. They give a structure that prevents enterprises from crumbling down. One thing to be wary of, though, is to leave some level of flexibility so that structure doesn’t become too rigid.

When it comes to EAM, there are many different things that can be standardized like:

• writing standard operating procedures for tasks that are carried out on a regular basis
• writing health and safety guidelines (like LOTO procedures) 
• creating preventive maintenance checklists 
• rules for tracking and managing MRO inventory
• rules for negotiating with 3rd party vendors
• rules for hiring and onboarding new members of the maintenance department
• setting a clear organizational structure (who is responsible for what and who reports to whom)
• …

Setting guidelines is just the first step. Making sure that they are followed in practice is a separate challenge. 

There are two ways to get around that. One is to ensure all employees get proper training and learn the rules that are pertinent for their job position. 

The second “solution” is to go digital. Digitizing business processes helps you streamline your workflows and generate automated reports. Most importantly, any action that is taken leaves a digital trail that can be used to improve accountability throughout the organization.

Improve communication between roles and departments

In their lifecycle, assets will go through many different hands, and information about those assets will go past even more eyes. If you want to keep them operating smoothly, you need to have a good information flow.

Machine operators and other non-maintenance employees need to have an easy way to report asset issues and submit maintenance tickets. The maintenance team has to be able to schedule and coordinate work between technicians. Field mechanics should have a simple way to submit field data and reports. Inventory managers need to get timely notifications so they can create emergency orders or cancel an automated purchase. Accounting wants to be able to quickly review and approve those kinds of orders.   

Using CMMS or enterprise asset management solution and integrating it with your ERP system is usually the best way to ensure quick access and exchange of relevant information.

Set up automated reports for identified goals and metrics

Defining your asset management goals and metrics is the only path to progressive and sustainable improvement. Organizations that do not have the ability to accurately track different performance indicators often focus too much on cost. Cost in isolation tells you nothing. You can have significant performance improvements that won’t be directly reflected in the total cost.

This is why it is so important to define and track metrics relevant to your goals. 

Once again, the software comes to the rescue. If you use software like Limble CMMS that offers granular reporting and the ability to set up custom reports, you can use its drill-down capability to find the root cause of identified problems.

For instance, let’s say you set up monthly reports for inventory costs, unscheduled downtime, and labor costs. You notice that in the last month there was a significant increase in inventory costs. By drilling down into this report, you can quickly discern if there is a problematic asset that breaks down a lot and has expensive spare parts, did the maintenance manager have to make a few emergency purchase orders, or did it just so happen that the department decided to restock inventory for a few months ahead.  

Check out our guide on the relationship between maintenance metrics and KPIs for more information.

Bonus tip: compare maintenance cost and team performance across different locations

Enterprises that have very similar setups across different locations can use this to their advantage. By comparing performance reports, they can see which locations are doing best and which ones are lagging behind. They can use this information to review best practices from top-performing locations and implement them across the entire organization.

Of course, you have to make sure that the locations operate in similar conditions so you don’t end up comparing apples and oranges.

Using Limble CMMS as your enterprise asset management software

When you have thousands of assets that need to be kept in good operational condition, you need to have the right software support. We have built Limble with enterprise users in mind.

Let’s highlight a few of Limble’s features that are very important for enterprise users:

#1) You can use a single account to track up to 1 000 000 assets over 1 000 locations.

#2) You can organize your assets in a clear parent-to-child hierarchy.

#3) Asset information is structured in centralized asset cards so you have all the important information in one place (general asset info, maintenance logs, PMs, WOs, reports). This not only speeds up the diagnose and repair process but allows for an actionable audit trail.

#4) You can manage assets more easily with QR codes. After a technician scans the barcode with their mobile device, Limble automatically opens the corresponding asset card. Alternatively, you can use different search and filtering functions inside Limble to quickly navigate to the right asset card.

#5) You can create custom fields and track only what you want – make, models, manuals, charts, meter readings, asset location, and anything else that is important to your organization. When you have hundreds of assets, you do not want to clutter your reports with a bunch of data you do not use.

#6) Limble comes with an inventory management module that makes sure you always have the right parts and tools in stock. Whenever technicians close a Work Order, they are prompted to enter which parts and materials they’ve spent. Limble uses this information to update inventory levels, send notifications about items that are low in stock, and help you make accurate inventory forecasts for the next month, quarter, or year. 

#7) Our enterprise package offers onsite support and implementation team. Do you want to install Limble on your internal servers? We can send over a team to help you set it up the way you want and make sure people get the hang of the software. It goes without saying that we offer a similar level of support for cloud-based implementations. In fact, each of our clients gets a dedicated account manager that helps with the implementation and provides ongoing support. 

#8) You can use our real-time granular reporting to inspect how much a single asset or group of assets is costing you, how quickly they are getting repaired (MTTR), how often they are breaking down (MTBF), what parts have been used on them, and how much time has been spent maintaining them. Additionally, you can easily compare performance and cost between different assets and locations.

I was looking for a proper asset management software with locations, assets, sub assets, components and not just a maintenance management software. I stumbled upon Limble and honestly I was pleasantly shocked. I like everything. I love the interface, I love the ease of use… I love being able to see my full factory in one place. A small yet very valuable thing which Limble does and which I did not find in any other software is that you can choose the generality of statistics that you want. If I want statistics on Asset level 1 I can get that. If I want statistics on Asset level 5 I can get it with just one click.

Mohammad Hassaan Akram, Factory & Maintenance Manager, Unilever

To make sure all of those features are fully utilized, we worked really hard to make Limble intuitive and easy to use. The less training is needed for the software to be adopted, the faster you can see results and make a return on your investment into CMMS. And Limble requires very little training.

If Limble CMMS is on your list of vendors you want to test and review, we have three different options for you:

• SCHEDULE A DEMO: Contact us and someone on our team will give you a walkthrough and get you familiar with all of the major features.
• TRY SIMULATED SELF DEMO: Clicking on this button will refresh your browser tab and load a simulated test environment where you check how Limble works at your own pace.
• START A FREE TRIAL: You can sign-up for a free 30-day trial to evaluate if Limble CMMS is a good fit for your organization.

Conclusion

Any way you look at it, managing a high-volume of assets is expensive. But, do you know what’s even more expensive? Not managing them.

Without the ability to track assets throughout their lifecycle and without a proactive maintenance plan to maximize the useful life of your assets, the only things you can expect are constant operational issues and an overblown maintenance budget.

You can avoid that scenario by using EAM software to establish strong asset management practices – and actually follow them.