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Will best of breed EAM packages be taken over by ERPs?

Couple of months ago, one of the colleagues from my previous organization was discussing with me on this topic. His point of view was that now these days ERPs (SAP & Oracle in addition to few others) are coming with almost all the features which EAMs provide. CIOs do not want to handle the complexities associated with multiple pack ages & vendors, unending complex integration issues, and of course IT cost escalations. Hence ERP packages would soon dominate the asset management space as well and there may not be many takers for EAM packages. He also ratified his point of view by his recent experience with two of his prospective clients opting for an ERP instead of an EAM; SAP being selected over maximo in both these cases.

Though I am convinced that EAM packages do have a bright future and would continue to have a large user base, yet a best of breed EAM package being my bread & butter for last one decade forced me to revisit & endorse my views on this. So, I wore the hat of a package evaluation team and considered following facts -for an EAM package selection:
• Within an organization, Business decides the solution and IT is the facilitator
• The packages are evaluated based on the business process fitment & best practices
• Ease- of - use : Change management also plays an important role
• Maintenance departments are no longer perceived as cost centers and single asset failure even for a second may be very expansive to afford
• Of course, total cost of software & related implementation would also be a deciding factor
The ease of use is one of the most important factors which should be seriously looked into while selecting a package for production & maintenance department users as most of these users mainly work on the shop floors, operating heavy critical machines and they do not have luxury to sit in offices and explore software packages. The software, they use, should assist them in entering & analyzing the data quickly & easily. Most of the time, these production assets are operated on 24X7 basis, with people working in shifts to get maximum output without any damages to human life & surrounding environment, hence software should be built for users rather users accommodating themselves for software.
Considering these high level points, I compared ERPs & EAMs in general without getting into specifics of individual packages and what I found is as follows:
(1) ERPs are mainly developed keeping in mind of business needs of accounting, material management, manufacturing, sales, finance & payroll processes etc.
(2) While ERPs continue to add EAM features to their products, EAMs are also not lagging behind. EAMs, specially maximo, have added many more unique features, industry specific solutions within the product e.g. liner assets, various other industry solutions etc, in last few years.
(3) EAMs cannot be used in silos and they would need integration at-least with financial function of an ERP or client's legacy financial system.
(4) ERPs tend to be rigid in terms of ease of use (specially for shop floor users), configurable option and customization possibilities, as compared to EAM packages. EAMs provide an easier navigation & presentation layer to deal with.
(5) Maintenance operations are becoming more complex & mature day-by-day and need robust software solutions to take care of business

Considering all of the above, I found that both ERPs & EAMs would continue to gain more maturity and EAMs would be one step ahead of ERPs in terms of overall benefits for asset intensive organizations. If implemented, EAM module of an ERP, often take a back seat against much heavier accounting & manufacturing modules, and fail to provide the real benefits.  EAMs, with their rich functions, ease of use, best practices & business process maturity would continue to be selected by asset intensive organizations. But at the same time, EAMs also have to find the easier way to integrate with ERPs so that businesses can take advantage of both the solutions together resulting into ERP+EAM rather than ERP Vs EAM.

Additionally, we need to realize that in today's world, an EAM package is not about just creating some asset records and doing regular PM jobs etc. The technology is advancing, world is getting interconnected, assets are becoming smarter, problems are getting more & more complex (not to forget the recent oil spill), hence the businesses need smart & intelligent EAM packages rather than just a maintenance module. So long live EAMs.



Interesting analysis. I ve been EAM consultant for quite sometime and have been doing my introspection on ERP Vs EAM enigma. Its more to do with the Total Cost of Ownership, maintenance & sustenance of the package chosen. As you rightly said, all asset intensive verticals will adhere to the EAM packages owing to the fact that their business are driven by these assets and so the business dictate the choice. ERP packages lack the options you can have in EAM as of now but they might upgrade the options available as of now just like the way EAM has been building a mini-me-ERP modules in newer versions with almost all functionalities of a full proof ERP package. Its gonna be the cost, size & processes within business that will lead to the choice of packages. Both are growing and are integrating paving the way for us consultants to indulge more. :)

Well, thats my opinion.

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