By Rob Stummer, Managing Director, IFS Australia and New Zealand
For organisations in engineering, construction and public works, the difference between long-term success and failure can hinge on how effectively they manage assets.
Those that excel at asset lifecycle management can deliver more value and will have an advantage. Enterprise software capable of supporting operations and maintenance, not just financials, is part of the foundation for success.
With technological advances, new assets will be smarter and more reliable than those seen before and many will communicate directly back to their original manufacturers or designers.
However, these are just a few links in the asset lifecycle management chain, Colin Beaney, IFS Global Industry Director says.
“An approach that looks at the full lifecycle is needed. Especially when you are spending all of that money, a primary focus has to be on the project management of the initial asset design," Beaney explains.
The scope of the challenge goes well beyond tactical monitoring of assets to larger lifecycle issues, such as accurate master data, effective collaboration with contractors, and disciplined project control. And, since public works carry many environmental, health and safety impacts, organisations must pay close attention to compliance.
A Single Source of Truth
Because of the importance of maintenance to asset-intensive organisations, enterprise asset management solutions are widely used. Enterprise resource planning (ERP) solutions, while widely used to run finance and operations, are often perceived as a poor fit because they may lack full-blown, integrated asset management functionality.
Complicating matters further, to manage the installation of major new capital assets, organisations also employ best-of-breed project management solutions. As a result, what often occurs is a fragmented mix of software, with ERP used for financials, asset management systems for maintenance, and standalone tools to manage projects.
The success of asset-intensive organisations is inseparable from how well they manage assets over their entire lifecycle, and that means tight control over capital projects, close collaboration with engineering and construction firms, and effective handover of asset design data into systems for procurement and maintenance.
A standalone enterprise asset management system is not going to fulfil all these asset lifecycle management goals. Supply chain processes, HR master data and many other areas are best handled by ERP systems.
For example, the smooth handover of assets from construction firms and design teams into the hands of the asset owner sets the stage for success in efficiently running that asset and deriving maximum value from it over time. Ideally, this handover should not be a cumbersome “point to point” linkage between design systems and asset management systems, but should flow into one consistent repository for asset master data. An ERP solution with a common schema for asset engineering data can serve as this “single source of truth”.
Yet, because of the shortcomings of most ERP solutions when it comes to asset management, a standalone enterprise asset management system is often considered the most “critical” business system.
With an integrated solution, however, the organisation has a consistent asset record and hierarchy that can be tapped for everything from procurement, to projects, to HR records that track who is certified to install, run or maintain specific assets.
While a standalone asset management system might be able to trigger an order for a critical piece of equipment that has failed, it’s also crucial to operations that managers have visibility into exactly when it is going to be delivered. And, when an asset is due for a major upgrade, you want the related asset data to flow right into the project control and costing for the upgrade project.
Simplified Compliance
Better master data for asset lifecycle management is also essential to compliance and adherence to safety standards.
While asset management functionality is not a “drop-in” means of compliance and/or meeting standards such as ISO 55000, having an integrated solution that takes a strategic, long-term planning view puts you in a better position to prove that asset management procedures are sound.
An integrated solution supports this by establishing one single source of truth for asset data and should be capable of tracking the tasks handled by subcontractors. Providing a consistent integrated system for authoring and accessing asset data and responsibilities simplifies compliance. A system with document management capabilities further eases the auditing of procedures.
In short, an integrated solution which combines business-critical ERP, enterprise asset management and project control functions is the key to organisations maximising their effectiveness over the entire lifecycle of their assets.
About the Author
Rob Stummer is Managing Director, Australia and New Zealand for global enterprise applications company IFS, achieving significant growth over the last five years. He holds a Masters in Information Technology from Melbourne University and has consulted to many of the region’s Top 500 companies.