Strategy, people and processes: Fulfilling the promise of enterprise asset management

Executive summary

Companies in asset-intensive industries such as utilities, oil and gas, and airlines have long sought to manage their huge investments in assets more effectively. Yet even after significant investments of time and money in formal asset management programs, typically called enterprise asset management (EAM), companies often come away disappointed that their programs have not delivered on the promised benefits of more reliable assets, lower costs, and improved safety. And all too often executives aren’t sure why the benefits haven’t materialized.

When EAM programs fall short, it is often because the company has concentrated its efforts on technology upgrades without addressing underlying problems. The latest technology solution in itself will never enable companies to manage assets effectively. A successful EAM program must begin with the right strategy for managing assets, and then focus on the people, processes, and technology needed to carry it out.

A successful EAM program should integrate the three key disciplines of EAM: planning for and managing assets throughout their life cycles, carrying out the efficient maintenance of those assets, and managing the maintenance workforce. Companies must first develop an overarching asset strategy that includes all three of these elements. Then they must execute that strategy effectively, ensuring the participation of all stakeholders, designing the right processes and procedures, training employees well and managing the change process, optimizing the necessary data, and integrating asset maintenance tightly with the supply chain.

The right strategy, people, and processes

Good EAM practices can yield significant benefits to companies — cost savings, operational efficiency, increased asset reliability, longer asset life, and increased safety. Implementing EAM, however, is a highly complex endeavor, and there are many reasons that it can fail to produce the hoped-for benefits.

Surprisingly, the most critical reasons aren’t technological, but rather strategic, people-based, and process-oriented. With the right people, strategy, and mind-set, these problems can be solved. The key is to devise a complete and coherent strategy, backed up by a full business case, and then to translate that strategy into the processes and technology needed to carry it out. Companies determined to create such a program must enlist the right set of employees — from top executives on down to field-level employees — to put the program into operation, and then to consistently monitor its results. With hundreds of millions of dollars at stake, the rewards of getting it right are high.