Let us understand what is Enterprise Asset Management. The holistic management of physical assets in an organization is called Enterprise Asset Management. It is used for optimizing assets lifecycle, which also includes design, operations, commissioning, maintenance, decommissioning and replacement. EAM also manages different business functions like payroll, human resources, finance, skill development, etc.
It is evident hat EAM is vital to the health of any organization. If handled effectively, it can be the key reason to have continued operations. It can enhance the return on investment and postpone any new purchases for the organization.
EAM is classifies as below:
- Physical Asset Management
- Infrastructure Management
- Digital Content Management
- IT Service Management
- Fixed Assets Management
To handle the full asset lifecycle and address business needs, an organization requires integrated visibility, control, and automation across its technology and business assets. This will help to achieve the objectives efficiently and enhance the value of all assets.
With increased visibility of all assets in the enterprise, the business can respond quicker and make better decisions. Having better control of the assets and its data, an organization can manage and secure their investment, reduce operational risk, reduce inventory cost, control expenses and maintain safety and security. Enhanced automation allows the organization to be flexible and active in their operations, utilize assets with better asset management and improve reporting techniques using key performance indicators and dashboards.
With better asset reliability and availability, EAM gives a basis for improving service delivery and increasing revenue. When an organization synchronizes their supply chain to meet definite supply level, the availability of the asset should align with the demand plans. There are various value drivers in EAM. Let us take a look at how it affects the business.
Increased customer satisfaction, asset or service availability with lower risk contributes to the revenue. The increased labor productivity and reduced material and service costs give a basis for better operation cost. With an increased revenue and reduced operating cost, there is an effective service delivery and profit generation. Thus, EAM has a direct impact on justifying the price and hence determining an organization’s profitability.
Reduced equipment and facilities investment, fixed capital can be controlled. With an increase in inventory and receivable turnover, working capital can be effectively be used.
This shows us that with better profit and efficiently used capital, there is a high return on investment and shareholder value.
To summarize, a good EAM:
- Provides a good foundation for asset strategy, objectives, and plans
- Optimizes performance by a holistic control of assets
- Prioritizes planned maintenance
- Develops short-term and long-term performance targets to achieve optimal use of assets
- Manages risk related to all assets in the organization
- Measure and improve the effectiveness of an organization’s approach to a continuous review.