17 July 2017

5 Reasons Your Enterprise Asset Management (EAM) Should Be Part of Your ERP


Enterprise Asset Management (EAM) is a technology-empowered method for organizing assets, improving efficiency, and maximizing your investments. Managing all of your assets across departments, facilities, and locations can optimize and extend their life cycle. There are several reasons to use EAM, including:

  • Maximizing return on assets (ROA)

  • Reducing costs and risks

  • Making informed decisions about assets

  • Reducing total cost of ownership (TCO)

  • Increasing uptime and improve predictability

Typically, physical assets are managed in one of two ways: either as a module included in enterprise resource planning (ERP) software or through a specialized EAM application.

What’s the Difference Between EAM and ERP?

ERP is an enterprise application, meaning it’s designed for large organizations to manage business processes. ERP can make an enterprise more efficient by automating tasks related to tech, human resources, products, services, and more. Usually ERP software consists of several modules that work together. ERP is designed to combine all of a company’s activities into a single database.

EAM is a broad term, used to define software that is specifically designed to manage physical assets, such as an organization’s building, manufacturing equipment, and more.

Why EAM Should Be Part of Your ERP

There’s an ongoing debate among finance, IT, and operations personnel about whether it’s better to include EAM as part of your ERP or to invest in a separate EAM application. Here are five benefits to including EAM as part of your ERP:

  • Get insight into the financials. EAM software will give you insight into the lifecycle of your assets, which can improve predictability and help you avoid costly breakdowns. When you incorporate your EAM into your ERP platform, you can get more information about how asset management impacts your financials. The EAM module can help you schedule, plan, and execute work, while the financial costs, depreciations, and capitalizations are handled in the ERP as a whole.

  • Avoid duplicate tasks. Streamline the asset management process by adding EAM to your ERP. When you use separate EAM software, you can lose sight of the impact asset management has on your enterprise. It’s far too easy to duplicate tasks or mishandle information when you have to input numbers into two separate systems.

  • Make your assets more profitable. Assets must be monitored and controlled in order to bring them to life and maximize your ROA. Integrating your EAM with your ERP allows you to manage assets while controlling their financials, resulting in savings. For example, let’s say your assets are worth $5 million. If you use your ERP to monitor and control those assets to increase their life by 10 percent over three years, you have $500,000 in additional value or profit.

  • Make your processes more efficient. Adding an EAM module to your ERP gives you the opportunity to automate important tasks that will extend the lifecycle of your assets. For starters, minimizing paper-based administration will improve efficiency. You can also automate the creation of quality checks to keep an eye on your equipment, keep tabs on your parts and inventory, and efficiently plan and schedule new jobs.

  • Increase up-time. Without an EAM system, it’s too easy to lose track of assets — especially if you’re managing several facilities in various geographic locations. EAM will give you insight into your inventory so you can manage service calls and repairs, and keep your equipment in working order. Unexpected breakdowns are costly, and an EAM can help you avoid them.

Manage Assets and Financials in One Place

Organizations that rely on assets need an ERP system that can provide important EAM functionality. Both ERP and EAM systems bring unique value to your organization. While EAM modules do a better job of managing physical assets, ERP software is best for managing financials. When you combine these systems with effective integration, you’ll be able to leverage your asset management to impact your bottom line. 

This is a guest blogpost by Megan Pacella. Megan Pacella is a contributor for TechnologyAdvice.com, with specializations in enterprise software, customer service, and sales. She also provides health, wellness, and travel content for a variety of outlets and organizations, including USA Today, InterContinental Hotels Group, CHOICE Hotels, Where Traveler, and more.

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Peter van Leeuwen
Peter van Leeuwen,
Peter van Leeuwen,
Manufacturing Industry Specialist

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