For many years, a debate has raged regarding the relative merits of enterprise resource planning (ERP) and enterprise asset management (EAM) systems. Typically, this debate pits an organization’s finance department against its operational teams, with IT stuck somewhere in the middle. Finance might argue that ERP is critical to the business, and ERP modules can provide some EAM functions; with this approach, all data is stored in one place, and IT has just one system to manage. Based on this reasoning, finance often wins the argument.
Unfortunately, the business loses, particularly in asset-intensive industries. In taking a “one size fits all” approach to enterprise software, organizations miss out on the rich functionality that an EAM system provides. ERP is designed primarily for financials and accounting, manufacturing processes, supply chain management, and customer relationship management. EAM, on the other hand, is purpose-built to drive operational improvements through effective asset management.
Problems start to emerge before the ERP system is even implemented. ERP is the finance team’s “baby,” and other departments and functions tend to get pushed to the back of the line. Given the time and effort involved in an ERP implementation, the operations team can end up waiting months (years?) for asset management functionality. Then, when the system is finally deployed, the asset management modules can be hard to use and lack critical features that operations teams need.
EAM systems, however, provide robust tools for full-lifecycle asset tracking, maintenance scheduling and workflows, Maintenance, Repair, and Operations (MRO) materials management, and more. Analytics capabilities enable predictive maintenance that helps to prevent costly downtime and helps organizations deliver the highest quality service to customers. For organizations implementing sensors and other Internet of Things (IoT) devices to monitor and manage assets, EAM becomes the key to maximizing the value of IoT data.
The finance team might argue that EAM isolates an essential component of the company’s financials: the capital and ongoing operational costs of assets. To ensure that those costs are properly allocated, and invoices are paid, EAM data must be passed to the ERP system. Traditionally, integrating ERP and EAM has been extraordinarily difficult, so much so that many organizations simply give up on the notion of ever implementing EAM.
Today, large enterprise software vendors take a platform approach with standards-based architectures that make it easier to combine EAM with ERP. Modern middleware tools have also become platforms with graphical tools that allow nontechnical personnel to map data flows between applications.
That’s not to say it doesn’t require thought. Integration of the two systems should minimize the number of information flows and duplication of documents. The key is to let each application do what it does best. EAM excels at capturing asset costs as part of the management of all maintenance and operational activities. It’s better to have the ERP system obtain those costs from the EAM system than the other way around.
The bottom line is, asset-intensive organizations need both EAM and ERP to optimize their operations and gain maximum value from their strategic investments. Clango has extensive expertise with EAM, and an application development team that is adept at EAM and ERP integration. Let us help you implement an EAM solution that works hand in hand with your ERP system.
For more information about EAM and ERP, please send us an email at (firstname.lastname@example.org).