Patrick Connaughton Senior Analyst Forrester Research

TeleconferenceNext-Generation Enterprise Asset ManagementPatrick Connaughton

Senior Analyst

Forrester Research

May 30, 2006. Call in at 11:00 am Eastern Time

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Theme

Moving from a reactive to a predictive state of

maintenance in enterprise asset management

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Agenda

• New technologies re-energize enterprise asset management.

• Solution providers seek to meet clients’ evolving EAM needs.

• Reactive culture hinders wide EAM adoption.

• EAM solution providers focus on adoption challenges.

• To achieve PdM, EAM solutions need to move upstream.

4Entire contents © 2006  Forrester Research, Inc. All rights reserved.

Agenda

• New technologies re-energize enterprise asset management.

• Solution providers seek to meet clients’ evolving EAM needs.

• Reactive culture hinders wide EAM adoption.

• EAM solution providers focus on adoption challenges.

• To achieve PdM, EAM solutions need to move upstream.

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EAM enabling technologies

• RFID and GPS

• GIS

• Wireless rugged PCs

• Handheld devices

• Ultrasound

• Thermal imaging

• Wireless sensors

Mobile asset tracking

Geographic asset details

Automated data entry

Condition monitoring

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EAM enabling technologies

Mobile asset tracking for a company like JR Freight, railway transportation

Forklift-mounted GPS antenna and RFID reader

• Pinpoint the exact location of a tagged shipping container

• Reduces time to locate assets

• Improves supply chain visibility

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EAM enabling technologies

Geographic asset details for utilities providers like Southern Company

• GIS technology with drill-down asset information

• Answers common field questions at a moment’s notice

• Streamlines field service work

• Increases efficiency with more readily available data

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EAM enabling technologies

Automated data entry for companies like Pratt & Whitney

• Wireless bar code-based data collection

• Mobile computers

• Bar-code scanners

• Improve parts inventory data

• Streamlines the receiving process in the warehouse

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EAM enabling technologies

Condition monitoring for a company like Chevron

• Embedded wireless sensors

• Monitor offshore oil wells

• Early problem identification

• Avoid more costly repairs

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EAM’s expanding functional footprint

Role-based analytics and reporting

Reliability-Centered Maintenance (RCM) Predictive Maintenance (PdM)

Requisition and purchasing eCommerce

Event management and alerting

Spare parts management

Financial reporting

HR skills registry

Warranty management

Workforce management

Work order management

Preventive scheduling

Asset registry

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Agenda

• New technologies re-energize enterprise asset management.

• Solution providers seek to meet clients’ evolving EAM needs.

• Reactive culture hinders wide EAM adoption.

• EAM solution providers focus on adoption challenges.

• To achieve PdM, EAM solutions need to move upstream.

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Vendor landscape

Integrys AssetPoint TabWare EFx

Datastream DataStream 7i

Indus Asset Suite

IFS EAM

Intentia EAM

MRO Software Maximo Enterprise Suite

Mincom Ellipse

Oracle E-Business Suite EAM

Oracle JD Edwards EnterpriseOne ALM

SAP Service and Asset Management

Vendor Product

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Vendor landscape

• Two major categories

» Best-of-breed

» ERP

• Offerings

» Standalone with out-of-the-box ERP integration

» EAM solutions within larger ERP offerings

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Agenda

• New technologies re-energize enterprise asset management.

• Solution providers seek to meet clients’ evolving EAM needs.

• Reactive culture hinders wide EAM adoption.

• EAM solution providers focus on adoption challenges.

• To achieve PdM, EAM solutions need to move upstream.

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Common day-to-day reactive issues

• Bad data and low user adoption

• Poor inventory management of service parts

• Inability to create proper work schedules

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Agenda

• New technologies re-energize enterprise asset management.

• Solution providers seek to meet clients’ evolving EAM needs.

• Reactive culture hinders wide EAM adoption.

• EAM solution providers focus on adoption challenges.

• To achieve PdM, EAM solutions need to move upstream.

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EAM addresses common day-to-day reactive issues

• Bad data and low user adoption

Automated data entry

Refined validation rules

• Poor inventory management of service parts

Applied supply chain best practices

• Inability to create proper work schedules

Added business logic

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Agenda

• New technologies re-energize enterprise asset management.

• Solution providers seek to meet clients’ evolving EAM needs.

• Reactive culture hinders wide EAM adoption.

• EAM solution providers focus on adoption challenges.

• To achieve PdM, EAM solutions need to move upstream.

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Firms need tools that react, predict, and recommend

• Firms must integrate

» Asset monitoring/diagnostics and EAM tools

• Planners must consider all-in-one

» EAM data

» Asset monitoring trends

» Predictions

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How firms will benefit …

• Real-time performance management

• Enterprise-level analytics

• Increased efficiency in labor management

• Closer ties between diagnostics and remediation

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What’s the hold up?

• Present integration is only to import predefined work order tasks.

• Tasks are created in silos without priority or cost considerations.

• Tremendous amount of work to combine diagnostics and EAM.

» Rationalize all the data across all systems.

» Import to EAM.

» Analyze.

» Report.

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Core EAM Preventive maintenance

EAM application development

Past Recent Past Present Near Future Future

Complete PdM

RCM

•Mobile asset tracking•GIS asset details•Automation•Condition monitoring

Large Jump

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Benefits of Reliability-Centered Maintenance

• Presents a well-defined methodology for process re-engineering.

• Defines key performance metrics for assets under review.

• Identifies underlying causes, probabilities, and impact of failures.

• Maps preventive tasks.

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Recommendations

• Conduct a thorough RCM assessment before system upgrades and new installations.

• Harness the results from RCM by applying them to work orders within the production system.

• Firms must allocate resources proportionate to the cost and yield of each maintenance task.

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What it means…

• Improved asset management =

» Better Utilization

» Better Reliability

» Better Returns

• Improvements require a holistic approach to EAM.

• Third-party outsourcing can expedite firms’ transformation to improving maintenance with cost optimization in mind.

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Patrick Connaughton

+1 617/613-6486

pconnaughton@forrester.com

www.forrester.com

Thank you

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Selected bibliography

• April 24, 2006, Market Overview “Next-Generation Enterprise Asset Management”

• April 4, 2006, Topic Overview “Topic Overview: The Extended Internet”

• March 15, 2006, Topic Overview “Topic Overview: Enterprise Mobility”

• December 22, 2005, Topic Overview “Topic Overview: Service-Oriented Architecture”

• October 18, 2004, Best Practices “Are Our Supply Chains Less Vulnerable Now?”