EAM's Roots and Future

Enterprise asset management (EAM) was born in the 1970s, a child of CMMS, computerized maintenance management systems, notes Houghton LeRoy, director of research at the ARC Advisory Group, a Dedham, Mass. research and consulting firm. CMMS solutions were industry's first efforts at automating the manual processes needed to keep the production floor running, explains Chip Drapeau, MRO Software's president and CEO. "They were closely focused on rudimentary practices of preventive maintenance. These CMMS solutions were point solutions with no reach beyond a department or plant. A company with 200 plants might be populated with 100 CMMS systems," adds Drapeau. "They were islands of information dedicated to the preventive maintenance function." EAM emerged in the last decade as users sought an integrated enterprise view of their process and business infrastructure. "Now instead of being limited to a maintenance focus, EAM has become an asset life cycle concept -- covering issues from cradle to grave," Drapeau explains. "EAM begins with planning, buying and implementing the asset and concludes with operating, maintaining and disposal." Beginning in the 1990s, the central EAM issue became return on assets -- performance and availability. In their latest iteration, EAM solutions are Web hosted, enabling easy solutions for sharing best practices across a distributed organization. With the advent of personal portals, real time data presentation can be tailored to individual users. "Expect the majority of EAM's market growth to come from Web-hosted solutions by application service providers, says LeRoy, the author of a new ARC study of the worldwide market. He says customer service requirements are increasing while software license sales are declining. Currently at $1.6 billion (he includes IT asset management) EAM is growing at a projected cumulative annual rate of 3.1%. By 2007 ARC anticipates the global market reaching $1.9 billion. Consider the IT market segment as an exciting bellwether of what will happen with the emergence of intelligent production assets, adds LeRoy. "Intelligent assets are beginning to change the model for EAM. "We're moving to a collaborative asset life cycle management concept which means sharing responsibility and risks with suppliers and service providers. As with computers, the average internal service provider will not have the tools and knowledge to repair the equipment." In the search for stronger revenue growth, LeRoy sees many suppliers continuing a total EAM strategy that encompasses all the hardware and software assets from the shop floor to the top floor.