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What Is Enterprise Asset Management (EAM)? A Quick Guide

Ever feel like your business is running on fumes because equipment keeps breaking down? Or maybe you're struggling to keep track of maintenance schedules and inventory for all your physical assets.

If this sounds familiar, you're not alone. Many organizations grapple with managing their physical assets –  buildings, machinery, equipment, IT hardware, and more.

This is where Enterprise Asset Management (EAM) comes in.

This quick guide will explain EAM, how it benefits your business, and why it might be the key to keeping your operations running smoothly.

Main Takeaways from This Article:

  • Enterprise asset management (EAM) uses a strategic approach to manage your organization's physical assets throughout their lifecycle, from acquisition to disposal.
  • EAM plays an important role by helping you efficiently track and maintain assets, achieve compliance, and mitigate shrinkage losses.
  • Effective EAM solutions provide you with asset lifecycle management, maintenance management, asset performance management, fixed inventory and procurement management, compliance and regulatory tracking support, and reporting and analytics tools.
  • Implementing EAM contributes to your assets’ longevity, ensures regulatory compliance, promotes corporate social responsibility, and provides a strategic competitive advantage.
  • EAM serves a wide range of sectors, whether you’re in government, education, construction, healthcare, hospitality, manufacturing, non-profit organizations, religious institutions, or sports and athletics.
  • Keys to effective EAM implementation include migrating your existing data, selecting vendors who meet your requirements, and getting your team on board with EAM adoption through training and education.
  • RedBeam provides a cutting-edge tool that enhances your EAM efforts by simplifying asset tracking and preventive maintenance scheduling and providing real-time data for decision-making.

What Is Enterprise Asset Management (EAM)?

Enterprise Asset Management (EAM) is a comprehensive strategy for managing a business's critical physical assets across their lifecycle. It helps to get the most out of assets while cutting expenses, enhancing quality and efficiency, and ensuring safety and environmental guidelines are upheld.

What do we mean by physical assets when we're talking about enterprise asset management? EAM strategies apply both to:

  • Fixed assets (also known as non-current assets), referring to long-term investments not quickly convertible into cash
  • Current assets, consisting of short-term liquid assets quickly convertible into cash

Fixed assets include items such as:

  • Property
  • Buildings
  • Machinery
  • IT equipment
  • Office furniture
  • Vehicles

Current assets include:

  • Inventory
  • Cash
  • Accounts receivable

Enterprise asset management also may refer to software used to manage physical assets, known as EAM software or fixed asset management software.

EAM vs. Asset Management (AM)

You also can think of EAM as a specialized type of asset management (AM). Although these terms sometimes get used interchangeably, they have different connotations. Whereas EAM strategies apply to physical, tangible assets, asset management applies to both tangible and intangible assets. 

Typically, you'll hear the term asset management applied to financial assets, such as stocks and bonds. The term also may apply to intellectual assets such as patents, trademarks, and copyrights.

Because physical assets possess tangible properties lacking in intangible assets, AM and EAM differ in some noteworthy ways:

  • Scope: AM prioritizes financial tracking and performance management, while EAM includes acquisition, operational, and maintenance management strategies.
  • Functionality: AM tracks and manages asset value without special emphasis on asset lifecycle phases, while EAM optimizes the physical asset lifecycle in each phase from acquisition and use through maintenance and disposal.
  • Technology and integration: In contrast to AM features focused on financial management, EAM systems may support features such as work order management, preventive maintenance, and compliance tracking, while integrating with external software apps designed for these functions.
  • Use cases: AM supports financial reporting, while EAM promotes operational efficiency.

If you're searching for software, you may find the terms EAM and AM being used interchangeably. Additionally, some asset management software products specialize in IT asset management, digital asset management, or other specific areas. Check that the software you're considering supports the features you need.

Why Is Enterprise Asset Management Important?

Now that you have a better idea what enterprise asset management is, you might be wondering, why do you need it? EAM has always been important to organizations that depend on physical inventory and equipment. With the growth of the Internet of Things (IoT), the ability to connect physical resources to digital tools has made EAM increasingly vital for companies to achieve efficiency and gain a competitive edge. Companies today also depend on EAM to meet compliance obligations.

Saving Time Locating Assets

To underscore the importance of enterprise asset management, consider some common challenges of managing assets when you don't have an EAM system. For example, let's say your company owns a large warehouse and you need to find a small product or replacement part. Without EAM, you might waste a long time looking for the item before you locate it. 

In fact, workers spend an average of one full work week per year trying to locate items without the help of EAM systems. Finding items can get even more complicated if you store items at multiple facilities in different locations. EAM can allow you to locate items instantly.

Reducing Maintenance Downtime Interruptions

Or let's say you run a manufacturing plant with equipment that depends on regular part replacements for smooth operation. If you leave maintenance schedules up to intuitive guesswork, you may lose production time from equipment breakdowns. From 2021 to 2022, the average large plant lost 25 hours a month to unplanned downtime, costing $129 million annually. Companies are turning to asset management tools to help mitigate these enormous losses.

Achieving Compliance Efficiently

Then there's compliance. For example, if you maintain physical inventory, you probably have to spend at least a day or two a year counting it in order to complete your tax reporting obligations. A cloud-based EAM system with barcode scanning integration can cut your time down and help you reduce the risk of manual counting errors. Similarly, EAM can help you automate the process of meeting industry-specific compliance standards.

Reducing Shrinkage Losses

And don't forget shrinkage. While you're counting inventory, you'll probably discover something doesn't add up. In 2022, the average retailer lost 1.6% of inventory to shrinkage, representing $112.1 billion in total losses. Causes of shrinkage range from employee theft to supplier and receiver errors. EAM helps you track shrinkage and recover and prevent losses.

So if you're still trying to manage your assets with a pen and paper or a spreadsheet, you face risks like misplacing items, losing productivity to inventory hunts and equipment downtime, wasting time on inventory counts, and bleeding profits from shrinkage. 

Meanwhile, you're not taking advantage of the productivity gains you could enjoy if you were using the latest enterprise asset management technology. If you're looking for ways to save time and money and increase productivity and profits, EAM definitely represents a worthwhile investment candidate.

Key Components of EAM

Key Components of EAM-1

If you're wondering what makes up an effective enterprise asset management system, let us break down the crucial components that contribute to a robust and efficient EAM infrastructure.

1. Asset Lifecycle Management

EAM takes care of every stage of an asset's life, from its procurement to its retirement. It makes sure the asset lasts for a long time, is used efficiently, and is thrown away in a way that's good for the environment. This all results in a better ROI for the asset.

2. Maintenance Management

Maintenance management involves employing preventive, predictive, and corrective measures to uphold the condition of assets. The use of the Internet of Things (IoT) has improved predictive maintenance by enabling live tracking and data review to quickly find possible problems.

3. Asset Performance Management

EAM uses high-tech analytics and machine learning to improve processes. These modern tools help predict how well assets will perform, allow for preventative repairs, and reduce downtime. They convert complex data into useful information for better decision-making, improving the overall performance of assets.

4. Fixed Inventory and Procurement Management

Managing fixed inventory costs is a delicate task, where you need to maintain enough stock to satisfy demand without overspending. By integrating the global supply chain, you can connect fixed inventory data across various regions and departments. This allows for better management, improved forecasting, and financial efficiency.

5. Compliance and Regulatory Tracking

Depending on your business model, your organization may be subject to international asset management compliance standards such as ISO 55001 or industry compliance standards such as HIPAA. Additionally, any organization with inventory faces the task of completing inventory counts for taxes. Finally, you may have internal asset management policies, such as tracking stocks of products or maintenance parts. EAM simplifies your compliance burdens by automating asset tracking and auditing for conformity with compliance checklists.

6. Reporting and Analytics

To be useful to your organization, asset tracking data must be displayed in a form easy to digest, manage, and apply. EAM tools provide asset reporting and analytics features to help you display the data you need, mine it for business insights, and share it with decision-makers. Filters, customized display orders, and export options let you see data about asset checkouts and check-ins, history, transactions, and inventory.

The Benefits of Implementing EAM

Benefits of Implementing EAM-1

Now, let's explore the many benefits of incorporating Enterprise Asset Management into your operations.

1. Operational Efficiency

EAM improves operational efficiency by making processes smoother and reducing unexpected downtime. It also helps ensure that important assets are working reliably and are always ready to use, keeping your business running smoothly.

2. Cost Reduction

Investing in EAM can lead to considerable savings through improved asset utilization. This comes from its capacity to enhance the use of assets and manage operational and upkeep costs. It tactically positions organizations toward cost efficiency, making the best use of resources and maintenance, resulting in notable cost reductions.

3. Risk Management

With EAM strategies, businesses can reduce risk by automating tracking and reporting, ensuring consistent regulatory compliance. The system actively detects and resolves potential asset problems and compliance concerns, thus strengthening risk management.

4. Data-Driven Decisions

EAM systems are designed to provide up-to-the-minute data and powerful analytics, helping organizations make quick, knowledge-based decisions. Insights from predictive analytics and machine learning promote smart decision-making, leading to better asset management and smoother operations.

5. Asset Longevity

You can strategically extend the life of your company's assets by using EAM strategies. These strategies help create smart maintenance plans. Plus, they promote good management practices that are kind to the environment. As a result, businesses can operate in sustainable and eco-friendly ways.

6. Enhancing Regulatory Compliance

By bolstering adherence to both international and industry-specific regulations, EAM enhances regulatory compliance. With today's EAM solutions, preparing for audits is easier, as they come equipped with features for thorough documentation and strong reporting capabilities.

7. CSR Contributions

When you use EAM, your organization demonstrates a clear commitment to ethical practices and environmental sustainability. By openly sharing your CSR actions, you build stronger relationships with communities and people who have a stake in your company.

8. Strategic Competitive Advantage

Using EAM can give organizations a unique advantage. It helps improve customer loyalty and satisfaction by making operations smooth and efficient. Plus, EAM encourages an innovative and flexible work culture. This lets organizations quickly adjust to market changes and tech advancements, giving them a competitive edge.

Who Uses EAM Systems?

EAM Industries-1

EAM is a boon to many industries, from manufacturing to healthcare and government offices to sports & athletics. This shows how adaptable EAM is. Let's take a look at how EAM transforms various sectors.

1. Government

EAM is extremely useful for governmental organizations as it helps manage their extensive public assets and crucial infrastructure. Additionally, it aids in meeting regulatory requirements, which helps make government operations smooth while boosting supervision and control.

2. Education

The EAM system helps manage every aspect of an educational institution effectively. It takes care of everything from the upkeep of facilities to the use of advanced teaching tools. It also enhances resource use and ensures regular maintenance, leading to cost reductions and improved productivity.

3. Construction

In the construction industry, EAM streamlines equipment tracking, minimizing unplanned downtime and maximizing utilization. It provides instant updates on project progress, helping to finish tasks on time. It also helps control expenses through precise predicting and budget planning, which enhances the project's profit margin.

4. Healthcare

EAM makes managing critical medical tools and buildings in healthcare easier, leading to efficient operations and safe patients. It helps meet health regulations, enables quick responses to regulatory checks, and ensures the best use of assets.

5. Hospitality

In hospitality, EAM enhances the management of physical properties and guest service equipment for excellent guest experiences. It ensures smoothness from room services to restaurant operations, spa facilities, and more, thus enhancing customer satisfaction and driving repeat business.

6. Manufacturing

In manufacturing, EAM improves processes effectively, maintaining equipment and handling fixed inventory and predicting needed maintenance, which cuts down on interruptions and boosts the stability of the production line. This leads to better production quality, increased yield, and more revenue.

7. Non-profit Organizations

Non-profits use EAM to make the best use of their resources by thoroughly tracking and managing their assets. This not only cuts down on operating costs but also helps focus more finances on important initiatives, thereby creating a bigger impact on society. Plus, EAM provides an extra helping hand in meeting regulatory requirements and promoting financial openness.

8. Religious Institutions

EAM solutions empower religious institutions to efficiently manage large inventories of assets such as facilities, artifacts, and community goods. By optimizing asset utilization, ensuring timely maintenance, and streamlining service delivery, these tools promote institutional efficiency and the overall quality of community services.

9. Sports and Athletics

In the sports and athletics sector, EAM plays a crucial role. It helps keep facilities and expensive equipment in top shape. It also streamlines athletic programs, ensuring assets are ready and safe to use, ultimately boosting the performance of athletes.

How To Implement an EAM System

If you're ready for your organization to start benefiting from the efficiency of EAM, how do you get started? The specifics will vary with your organization and the software you adopt, but here are some top tips for effective implementation:

Migrate Your Legacy Data

To get started with an EAM system, you'll need to populate your new software with information about your assets. If you've been using spreadsheets, you can save time by choosing an EAM system that lets you import your assets data in spreadsheet or CSV format.

For assets you haven't entered into a spreadsheet, the easiest way you can enter data is by tagging items with asset barcodes and scanning them in with a scanner, mobile device, or RFID emitter. To do this, you'll need an EAM system that supports both scanning hardware and asset tracking software.

Know What to Look for in EAM Software

What do you look for when you're shopping for EAM solutions? Depending on your requirements, top considerations may include:

  • Support for the number of users and assets you require your solution to manage
  • Cloud-based design to let you access and manage your assets data from anywhere
  • Asset tagging and mobile scanning support to simplify the process of entering asset data and tracking assets
  • Smart data importing to make it easy for you to add existing spreadsheet information or new files
  • "Store and forward" transmission to ensure your counting and scanning capability remains intact even if your network connection goes down
  • Custom field options to control how your data is entered, stored, tracked, and displayed
  • Detailed asset history to support auditing
  • Reporting and analytics features that display your data in digestible form and highlight the information you need for actionable insights
  • Role-based access permissions so you can control who in your organization can access your assets data and what they can see
  • REST API interfacing that lets you integrate your EAM software with other apps where you store your assets data
  • Strong technical and customer support to help you get the most out of your investment

Your priorities will vary with your needs. Set up customized criteria by using your own ranking system to score potential vendors in the categories that matter to you.

Get Your Team Ready

When evaluating vendors, another criterion you may want to consider is training support. To implement your EAM solution, you'll need to get your team on board. This includes employees and managers as well as decision-makers in upper management and other stakeholders. A suitable vendor should provide strong training resources such as demos, tutorials, knowledge bases, and live training opportunities via on-site or remote sessions. Your vendor's sales team also should provide materials and presentations to help you communicate the value of their product to decision-makers at your company.

Where RedBeam Fits in the EAM Framework

RedBeam offers a cloud-based fixed asset tracking software solution designed to save time and money for companies of all sizes, from small businesses to enterprises. Top RedBeam features and benefits include:

  • User-friendly asset inventory and tracking: Assign and scan barcode labels for efficient tracking and data integrity.
  • Automated check-in/check-out management: Track assets as they move within or between locations so you can always see when they were checked out, who took them, and where they went.
  • Simplified audit and compliance reporting: Generate reports that support your financial goals and regulatory audit requirements.
  • Comprehensive multi-location asset visibility: View and manage assets across multiple facilities.
  • Secure role-based access control: Keep your data secure by restricting system access based on user roles.

Features like these have made RedBeam one of today's top EAM solutions for clients across a wide range of industries, from government agencies like the Federal Aviation Administration to educational institutions like Vanderbilt University to construction contractors like Internova Electrical Contractors, to name a few. Our pricing packages meet the needs of larger companies like these as well as small businesses.

So, take your EAM practices to the next level. Start a free trial today and learn how RedBeam's advanced asset management solutions can transform your organization.

Need more information? Book a demo now!

Enterprise Asset Management FAQs

What is the difference between ERP and EAM?

Enterprise Resource Planning (ERP) systems handle company-wide concerns, including finance and human resources, by integrating several business processes. On the other hand, EAM works to better manage physical assets like infrastructure and machinery, paying attention to their lifespan and enhancing their performance and longevity.

What is the difference between EAM and CMMS?

While both EAM and CMMS play a role in maintaining assets, they are not identical in their functions. EAM is a comprehensive system that handles not just maintenance but also procurement, fixed inventory tracking, and field service management. On the other hand, a Computerized Maintenance Management System (CMMS) is more focused on centralizing and optimizing information related to maintenance, aiding in EAM implementation but on a smaller scale.

What is the difference between EAM and IT Asset Management?

EAM and IT Asset Management both manage assets, but they focus on different types. EAM handles physical assets like machinery or infrastructure, while IT Asset Management manages the software and hardware in an organization's IT network.