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EAM versus CMMS: What's Right for Your Company? Part Two: Integration Concerns

Written By: Predrag Jakovljevic
Published On: March 16 2004

Integration Concerns

Many of the benefits from enterprise asset management (EAM) software result from the ability to exchange data from other systems and subsystems. These interfaces are not trivial in design or construction. For example, one of the simpler interfaces involves inventory. Namely, EAM software needs access to inventory to determine the availability of repair parts, whereas your manufacturing system needs access to inventory to dispense ingredients or bills of material (BOM). Typically, EAM software will have its repository of inventory consisting of repair parts. On the other hand, a manufacturing ERP system will have its repository of inventory, which can accommodate ingredients, BOM, and repair parts. Designers of manufacturing systems are not that short-sighted to think that every company has computerized maintenance management systems (CMMS) or EAM software.

Some basic questions include

  • Where is the official inventory maintained?

  • How do you keep the inventories in sync?

  • What flares will go off when they go out of sync?

  • How do you put them back in sync?

However, in the software development world, these are difficult questions to answer and design for; moreover these are just the tip of the interface iceberg. The table below lists some of the potential EAM interfaces.

Granted some of these may be overkill, but, even if only half are needed or desired, the interface issues and construction represent a major commitment of time and resources, now and in the future. The good news is that if you can satisfy all of your software needs from a single source, which can be done through IFS and Intentia, your interfaces are most likely already resolved for you*. Again, this is a strong selling point for IFS and Intentia.

However, while most companies recognize the value of EAM software, many have not even taken the first step. These companies, of necessity, already have existing systems to control their inventory, payables, manufacturing, payroll, and other functions and, due to time and monetary considerations, are not likely to give to them up for new, fully integrated software. The bottom line? Companies selecting a new ERP system should include a review of the EAM functions in each product, particularly in process and asset intensive industries where good EAM is frequently seen as being critical to the business. However in most cases, companies will acquire EAM software but the interfaces to external systems will have to be constructed.

When providing a stand-alone solution, vendors may oversimplify the interface issues by suggesting the availability API's (application programming interfaces) or software-based integration services. They may also pressure you into buying more modules than you need. These statements may have validity. However, in the case of interfaces, it may be wise to be the "Doubting Thomas as you move to Missouri, the show me'" state: this is clearly a case where you must do your homework beforehand and not solely rely on the claims of the provider. Request references from clients who have actually created interfaces; determine the time and effort required; check the cost of any customization to meet your specific needs as a so-called "standard" interface rarely meets these; and verify that there are no degradation of performance on either side of the interface—existing and EAM software.

This is Part Two of a four-part note.

Part One defined EAM and CMMS.

Parts Three and Four will present an analysis of two major vendors.

*In this note offerings from software vendors IFS AB (XSSE: IFS) and Intentia (XSSE: INT B), two fellow Swedish providers of enterprise business applications for mid-size and large enterprises, are used to help illustrate some of the advanced features of EAM.

What Would ERP Vendors Do?

Prior to, during, and shortly after the Y2K phenomenon, enterprise resource planning (ERP) software vendors had plenty of sales and implementation work. ERP systems are suites that typically support most business functions inherent within an enterprise, and because ERP providers may tailor their solutions to meet the needs of various industries, ERP packages may also vary in their functional scope and supported modules. Namely, certain vendors focus on service-based (i.e. people-centric rather than physical products-centric) industries, others' solutions are geared towards retail distributors, while the manufacturing-oriented vendors support material management, production planning, scheduling, and execution. Many vendors tackle multiple areas though, both above-mentioned and beyond.

Still, given plant maintenance is a core business component of many manufacturing enterprises, one would expect ERP products to at least feature native CMMS functionality. Thus, it might not be too dazzling a fact that IFS and Intentia (as well as SAP, Oracle, Ramco Systems, and former J.D. Edwards now PeopleSoft) have been offering maintenance modules for years. Well, not quite, given most ERP vendors have deliberately stayed away from addressing the needs of the maintenance departments, which had created the opportunity for CMMS/EAM specialists.

Nonetheless, ERP vendors have lately been scrambling to provide maintenance and asset management for various reasons, such as the bolstered competitiveness through an enlarged functional footprint and existing customers' or prospects' inquiries and demands. Furthermore, now that they are chumming for additional sales, these entrant vendors are facing the same interface issues when attempting to incorporate an EAM solution with existing software functionality. Consequently, it is not surprising that typical ERP software has not traditionally excelled in the EAM or CMMS arena. Of late, the landscape is starting to change with more ERP vendors, either reluctantly or not, beginning to challenge the standalone EAM solutions. At least, major vendors of EAM/CMMS software face strong head-to-head competition from several suppliers of ERP software that natively offer maintenance modules, bundled into the larger ERP or supply chain management (SCM) context.

The contest here is classic, and dj vu, in SCM and CRM arenas —the user will have to chose between standalone best-of-breed (BOB) software and a fully integrated module that often lacks some of the "bells and whistles" featured in a BOB offering (see Best of Breed Versus Fully Integrated Software: The Pro's and Con's) . Also, since pure play EAM vendors do not rely on existing ERP modules to support certain maintenance operations, their more complete functionality may provide a better fit with how certain maintenance departments operate than with internally developed EAM solutions by ERP vendors. Also, as the EAM software has been evolving into a mature, slower-growth market, many incumbent vendors are responding to this by offering high-margin, value-added services, such as helping to install, integrate, maintain, and even host the software, which has already been purchased by many of the major customers in asset-intensive industrial sectors.

Given slower projected growth and competition from ERP vendors, major vendors of stand-alone EAM or CMMS packages such as Datastream Systems, Indus, Avexus, Mincom, MRO Software, and PSDI have been reengineering their product suites around the Web and enhancing their global capabilities. Additionally, they have been adding capabilities such as e-commerce, fleet management, facility and property management (stretching beyond production facilities to offshore drilling platforms, fleet, IT equipment like local- and wide-area networks, computers, mobile devices, and even point-of-sale terminals), often by partnering with specialized players to be more competitive in various niches. They are targeting large existing customers in process industries (petrochemical and oil refiners as well as mining and metals processing) and hybrid sectors as prime candidates for their value-added services. However, the major challenge of these vendors is to win increased acceptance among discrete manufacturers that have not readily purchased this increasingly proven productivity tool in the past, and which has been ERP vendors' more fertile area.

Reliability-Centered Maintenance

Going back to the EAM/CMMS comparison, reliability-centered maintenance (RCM) is the critical differentiator between a CMMS and EAM software. RCM is a process for defining a cost-effective schedule for each asset necessary to maintain reliable performance. In order to establish this schedule, reasonable expectations of performance, limitations, and priorities must be established for the physical asset. Instead of focusing on preventing an asset from failing, RCM concentrates on ensuring on its continued reliability. It shifts the maintenance paradigm from one of prevention to one of prediction so that appropriate action can be taken early on. Furthermore, creating a RCM environment is not a one-time process. Rather, it is a continuous, evolving, and ever-improving process of analysis.

Both IFS and Intentia's EAM offering provide the bio-feedback process. Through its cost and statistical data, Intentia's EAM analyzes failure patterns, determines the consequences of these failures, suggests alternative maintenance programs, analyzes the cost of maintenance programs versus the cost of failure, and activates the selected program upon approval. This multi-step analysis can be repeated at the discretion of the user or when conditions, namely repeated failures, warrant it.

Similarly through its equipment metering, monitoring and performance modules, IFS' RCM functionality is enabled through data collection from automated systems and criticality analyses. IFS' approach is that, through continuous investigation and examination, the right jobs are done at the right time, ensuring proactive asset management, minimal waste of time, and ongoing asset reliability.

This concludes Part Two of a four-part note.

Part One defined EAM and CMMS.

Parts Three and Four will present an analysis of two major vendors.

About the Authors

Predrag Jakovljevic is a research director with Technology Evaluation Centers, Inc. (TEC), with a focus on the enterprise applications market. He has over fifteen years of manufacturing industry experience, including several years as a power user of IT/ERP, as well as being a consultant/implementer and market analyst. He holds a bachelor's degree in mechanical engineering from the University of Belgrade, Yugoslavia, and he has also been certified in production and inventory management (CPIM) and in integrated resources management (CIRM) by APICS.

Joseph J. Strub has extensive experience as a manager and senior consultant in planning and executing ERP projects for manufacturing and distribution systems for large to medium-size companies in the retail, food and beverage, chemical, and CPG process industries. Additionally, Strub was a consultant and Information Systems Auditor with PricewaterhouseCoopers and an applications development and support manager for Fortune 100 companies.

He can be reached at JoeStrub@writecompanyplus.com.

 
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