Ron Lanzo looks to the future of Asset Management
Mary Gorczynski 1100006B54 email@example.com | | Tags:  eam service-management asset-management maximo ibmontwitter tivoli software ibmsoftware
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Today's entry comes from Ron Lanzo.
I’ve been thinking a lot about the future lately. Not, my future so much, but the future as it relates to Assets. Asset Management systems are driven more by the past and present asset information than by the future. At the core exists an asset database, with current information about an organization’s assets. This data is kept as up to date as prudence suggests, in some cases even in real time. Then there is the work management, which details the historical evidence of work performed on the assets. Work Orders are used to capture failures, document inspections (and findings), track repairs, and capture all elements of cost related to assets. The results of these transactions are typically analyzed to determine the performance of both the assets and the people who support them… based entirely on the past because it’s a known quantity.
Anyone here follow stocks? Let’s use the analysis of public shares an illustrative example. For most of the last century, companies were valued based on past performance. They reported revenues and earnings in annual reports and from this historical data a series of metrics emerged including Earnings per Share, Dividend Yield, Price to Sales, Price to Book, Return on Assets, Return on Equity, and so on. As information has become more available and timelier, analyst projections of future performance have become more widely available. Now the market is aware of an average of projections for future revenue, earnings, and dividends. This has lead to a new wave of metrics like Forward P/E, Price to Earnings Growth ratio, Forward Dividend Yield, etc. These new forward metrics and future performance are now paramount; it’s not uncommon to read a story about company x who beat expectations for revenue and earnings, but the stock dropped because of future guidance.
I’ve oversimplified to make a point… in fact Asset Management systems do have some future perspective; the systems typically include Preventative Maintenance routines which project future work orders as well as the typical work order backlog. But overwhelmingly the systems are run based on past and current performance. Some of these elements can be leveraged to provide views into the future. Using predictive techniques and technology, engineers can help spot an impending equipment failure. This type of prediction works best in a mature maintenance environment for industrial operations with skilled personnel focused on key assets.
The area where an asset’s future may be most important is in the world’s infrastructure. The high capital investment precludes the kind of component replacement strategies common in industry. Infrastructure must be designed for long life and repair efforts targeted at elongating that lifespan. The investment decisions are based on multiple factors including the asset’s condition, expected lifespan, level of service requirements, future population growth, and the impact that a given action will result in extending the assets lifespan or decreasing its future costs. This type of prediction is much more financially focused and is the result of coordination between maintenance, construction engineering, and finance where the goal is the greatest asset performance for the lowest total cost.
So look into the future… where our experience and capabilities for managing assets in the present is no longer based exclusively off of the past, but a well reasoned expectation of future asset value (performance/cost). Is this a major philosophical shift or evolution of existing capabilities? What underlying functions will we need to add to our current systems to support this shift?
More next week.