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What is enterprise asset management (EAM)?

Enterprise asset management (EAM) is the systems and software that oversee physical asset lifecycles and equipment maintenance to improve utilization and cost controls.
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Enterprise asset management

Enterprise asset management (EAM) combines systems, processes, and software to control physical assets and equipment. EAM is a business application used by asset-intensive industries to optimize capital investments, oversee maintenance and repair activities, and manage costs. “Enterprise” refers to business assets across departments that support operations, from industrial machinery, production lines, fleets, and back-office facilities to frontline equipment serving customers. . The actual assets tracked vary greatly in quantity, value, and type by vertical. 

Ideally, EAM makes the most effective use of each asset throughout its lifecycle from refresh planning and deployment to retirement and disposal. The purpose is to get a larger picture of all assets owned and maintenance performed to reduce CapEx and OpEx. EAM typically involves asset maintenance, inventory management, work management, and financial management and planning capabilities.

Devices connected through the Internet of Things (IoT), like sensors, vehicles, and machines, can help with the incorporation of analytics and artificial intelligence (AI) systems into EAM. This helps with the gathering of insights for better practices, informed decisions, increased efficiency, and effective condition-based preventative maintenance.

EAM software

EAM has a future in the cloud with SaaS services, as organizations are rapidly migrating to the cloud and services that are managed from a centralized location—ideal for asset management. Data needs can be more easily accommodated using cloud software, as there is flexibility in storage options and storage expansion.

An EAM system should be applied for better planning, execution, tracking, and optimization of assets and parts. EAM can sometimes be compared to computerized maintenance management systems (CMMS), but there is a distinct difference between the two. EAM software and its holistic view can account for MRO parts and materials management, asset lifecycle management, service contracts, financial management, and analytics. EAM oversees assets and supports their performance from beginning to end, including a hierarchical asset database, inventory levels, utilization, and location as well associated documentation, work orders, and maintenance plans. CMMS are generally considered to be small-scale, single-site applications for work orders with less functionality overall.

Organizations can assess, track, optimize, and manage assets, including their utilization and quality using EAM, which is crucial to operations and the bottom line. There are countless types of assets a company can oversee, including fleets, devices, machinery, pipelines, facilities, consumables, leased equipment, and mobile items. Many items are industry-specific, such as transportation, medical, and retail operations. There are best practices to help teams work in a complex environment with greater control and efficiency.

Every day, organizations are looking for better ways to manage their enterprise assets—especially as value and interest in the assets increase. Laws and regulations have detailed requirements about the management of assets, including safety, privacy, and accessibility concerns. There is a high risk to not accounting for assets, their costs, their whereabouts, and their documentation—this is a great incentive to apply EAM to all types of asset management practices at all levels. EAM provides the opportunity for companies to glean real-time insight into assets as they apply to company revenue and operational needs. EAM helps organizations:

  • Maximize asset utilization: IoT and analytic tools can provide real-time data to extend the useful life of physical assets as well as report on any necessary condition-based maintenance.
  • Manage aging assets and infrastructure: The analytics generated by EAM lead to more informed strategies and business processes for equipment refresh cycles.
  • Resolve issues before they happen: EAM software can have preventative measures for equipment maintenance to keep operations continuous and stable for preemptive disruptions.
  • Monitor assets intelligently: Data can be aggregated through departments for more streamlined alerts and decision making and AI-powered monitoring can provide insights about the state of the assets.
  • Centralize asset information: Managers can access an asset’s location and automate critical assets workflows for ease of use and consistency.
  • Consolidate operational applications: All assets can be managed from a single technology system, which standardizes processes for ideal functioning across the business and multiple teams.

Asset lifecycle management

All assets and associated data can be documented and stored in an easy to access location for alteration or reporting. The assets can be managed along all steps of the asset management lifecycle, which provides flexibility.

Graphic showing the features and functions of enterprise asset management (AEM).

Planning

Companies must determine which assets to buy or lease and when and where they will be used. Often there are two types of asset planning – one centered on new assets for business expansion and the other on refresh cycles to replace aging assets currently deployed. Both planning exercises require finance and operations to coordinate on asset decisions that improve the bottom line and deliver better products or experiences.

Work order management

Carefully track and diagnose work orders and associated issues, quickly analyze needs, and turn over the work order to the proper team to craft a deliverable. Also oversee scheduling, parts procurement, involve employees and contractors, and track work through the process.

Maintenance, repair, and operations (MRO) materials management

In EAM, materials management refers to the parts, tools, and consumables that workers need to keep assets functioning properly. This could range from light bulbs in a local storeroom to a specialized wrench required to tighten a machine bolt during monthly inspections. Ensure work is not held up because of stockouts or missing parts.

Labor management

Employees and contractors can be trained, certified, and assessed when they are responsible for asset management and field service. They can also be assigned across necessary work orders, maintenance tasks, and associated with assets.

Financial management

Analyze work costs and find proper financial software for the management of enterprise asset spending. EAM systems can analyze work orders, the cost of operations, the cost of downtime, emergency scenarios, and refresh cycles for obsolete equipment.

Reporting and analytics

Issues with assets can be spotted before they grow into larger issues, and predictive maintenance can be administered. A company will be able to make more informed decisions by collecting key performance indicators from the entire asset estateand analyzing the reports for a holistic analytical view.

While they are often associated with each other because of their degrees of use for maintenance and management, there are key differences between CMMS and EAM.

What is CMMS

CMMS, or computerized maintenance management system, primarily oversees repairs and maintenance when the equipment is actively being used. At the core of a CMMS is a database that organizes basic information about assets and planned maintenance schedules. A CMMS database enables:

  • Asset registry: Store information about assets like serial numbers, positions, costs, codes, statistics about performance, documentation like videos and images.
  • Planned maintenance: Organize assets that are under different orders, then schedule preventive maintenance as needed. Work orders for maintenance can be automated based on dates or pre-set times.
  • Reporting: Gather, analyze, and report on information collected from assets, to produce common performance metrics such as mean time between failures (MTBF), mean time to repair (MTTR), and average cost of repair.
  • Work order management: Collect information about work orders, including the number, description, type, cause, associated persons, and the necessary materials for the work order. Management of work orders can also include scheduling employees, assigning out work order needs, reviewing the status of work orders, and attaching associated information or documentation

The difference between CMMS and EAM

CMMS and EAM are often used interchangeably. While some functions are certainly similar, there are important differences between the two. EAM solutions encompass CMMS capabilities, but not all CMMS tools have EAM functionalities. An EAM system handles larger and more complex assets across applications and locations from before an asset is procured to its decommissioning It may support audit processes, asset tracking, transfers, catalogs, reservations, product recalls, lease-end decisions, risk management, amongst other advanced capabilities. CMMS may be an appropriate solution for smaller sized enterprises, and EAM is more appropriate for larger enterprises, which have outgrown CMMS structures. But it does ultimately depend on the intended use of the system and the types of assets managed.

EAM is relevant across several industries, including:

  • Manufacturing: EAM are part of overall process management for manufacturing sectors that include defense, electronics, industrial products, and automotive. It can track a product lifecycle and manage requirements.
  • Transportation: Logistics and services function best with an EAM application, as it provides details about inventory and assets. Such uses can include fuel management, spare parts, bay schedules, and driver logs.
  • Healthcare: EAM helps manage relationships between equipment readiness and facilities. It can also help locate assets, comply with reporting, integrate with health information systems, and monitor facilities conditions.
  • Life sciences: Helps with the monitoring of facilities, mobile assets, equipment, and regulated substances. This is also important for meeting crucial compliance requirements.
  • Retail: Retail locations depend on a wide range of equipment to run the store, from the storage areas, displays, building, and point of sale systems. With digital commerce, new pick-up and customer service processes require different assets like customer lockers.
  • Facilities: Offices, education, and public sector facilities use EAM to track the building systems, furnishings, operational equipment inside, and on the grounds. With greater scrutiny of facilities with the new ways of working, reporting helps inform long-term strategies for building asset.
  • Utilities and energy: The transmission of services from utility and energy companies require assets like power lines and pipes, which need to accommodate scheduling and geospatial information.

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