Fulfilling the Promise of EAM
By Frederick Wedley, VP - Technology Services, CH2M
So your organization is abuzz about EAM and all of the benefits, especially after several suppliers presented how you can achieve large savings and run your business more efficiently. Now the task is to turn the hype into reality.
“Optimizing the lifecycle management of your physical assets is a business imperative that will help your organization improve performance and save money”
For practitioners starting down the EAM path for the first time, the vision of improving your capital asset management seems logical and straight forward, but this is much more than simply deploying a new software solution. I know, because I’ve been there.
In my 35 plus years of experience in the Transit and Rail industry, I’ve worked on both the operational end-user side of EAM, and as a former CIO, the EAM technical side of the equation. While there are unique characteristics and regulatory requirements for transportation, the fundamental goal of EAM is common among all businesses—the optimal lifecycle management of the physical assets of an organization.
Successful EAM implementations consider the entire program of asset handling, from planning and acquisition to maintenance and replacement. EAM software provides the tool, but without people and data it is of little to no organizational value. Any asset management (AM) program should take a holistic view that addresses people, processes and systems, including asset hierarchy management, budget management, purchasing and inventory management, work management and materials management. An effective EAM system can help support each of these functions.
Software vendors have made large investments to provide “turn-key” EAM solutionsmany of which are tailored to industry requirements.But at the end of the day, it is a computer-based system that will require IT support and potentially significant integration with other computer-based systems to support all business needs.
Operationaland/or administrative departments may be required to invest in learning new processes and skills and must be sufficiently staffed to handle the input and output of data. Leadership will also have high expectationsthat this investment results in more effective management of the agency. Executive dashboards are very popular, and leadership can view key performance indicators on their desktop or mobile devices tomake corporate decisions based on real-time information. The quality of system data will, of course, determine the effectiveness of any decisions made.
Senior management who are presented with an overall EAM plan will be challenged with committing to a potentially large corporate investment, and will want to know why they need EAM and what near-and long-term benefits they can expect to realize. Approaching EAM without a plan is a sure-fire recipe for disaster. The investments in manpower, hardware and software are too high to not have a structured plan with clearly defined goals and objectives across every area of your operation. The largest returns on investment go to those organizations that make AM an integral part of the culture. This begins with well-defined strategies and tactics. AM plans drive strategic information down to the maintenance management levels. Tactical information begins with your maintenance staff and runs up the organization to the executive leadership level. The program’s effectiveness is supported by both strong governance and an engaged management team. A well-coordinated and executed change management plan and knowledge transfer plan are essential ingredients for success.
The answer to the question “are EAM systems required?” is yes. Organizations need to understand that “systems” are much more than just the software and the ability to balance the investment and return are the keys to success. Optimizing the lifecycle management of your physical assets is a business imperative that will help your organization improve performance and save money.
As you prepare to launch an EAM system or program, consider the following best practices to prepare for a successful implementation that delivers long term results.
• The first question to ask is, who is responsible for EAM…Information Technology (IT), operational and/or administrative departments, leadership? The answer is everyone. While organizations will assign responsibility to an EAM lead, the success for large EAM implementation lies with the “buy in” and support from all levels of the organization.
• Make the business case by identifying costs upfront, for both labor and materials, and the anticipated benefits your organization will realize. Benefits may include increases in fleet availability and warranty cost recovery; reductions in material and purchasing costs; reduction in new equipment costs and inventory levels; and last but not least, improvement in labor productivity. Having the whole picture avoids misleadingcorporate expectations and negative views of the new EAM program.
• Industry-specific regulatory requirements shouldbe accounted for and included in the EAM planning process.For U.S. federal surface transportation, the Moving Ahead for Progress in the 21st Century Act (MAP-21) provides required guidelinesfor the Federal Transit Administration (FTA),the definition of the term “state of good repair,” and related standards for measuring the condition of capital assets (including equipment, rolling stock, infrastructure and facilities). A key component of the Transit Asset Management (TAM) requirement is the development of a TAM plan to preserve and expand transit investments.Having well maintained, reliable transit infrastructure—track, signal systems, bridges, tunnels, vehicles and stations—will help ensure safe, dependable and accessible services. The Occupational Safety and Health Administration and Environmental Protection Agency are additional examples of regulatory agencies.
• Make use of available industry best practices, such asPAS 55 and ISO 55000. PAS 55 was published by BSI British Standards and provides an objective structure forgood asset management. ISO 55000 is an international standard that covers the management of all physical assets. Organizations previously using PAS 55 can migrate to ISO 55000. Having a common structure with common terminology reduces the chance for “apples and oranges” within EAM.
• Acknowledge that EAM program implementations are complex and engage your stakeholders early and often. EAM is a living process and stakeholders as well as IT professionals should continue to monitor their business processes and system performance against corporate objectives and goals on an ongoing basis, both during and after program completion.