LNS Research Analyst, Joe Perino, presents learnings from his latest APM and risk management research.
With the introduction of LNS Research’s Asset Performance Management (APM) Research Library in January of 2015, now is the time to look forward and provide some guidance as to what we expect to see in 2015 as the top trends that will impact APM. Since the APM coverage is just launching, there were no APM predictions in 2014 and we are starting with a clean sheet.
In essence this post will give you a sneak peek at the APM topics that will dominate our research next year.
1: APM Will Be a Poster Child for the Big Three Tech Issues
The big three technology trends in manufacturing are generally recognized as the Internet of Things (IoT), Cloud and Big Data, and Mobility. All three of these technology trends are manifesting themselves across manufacturing. From the shop floor right on up to the front office, all of these technology trends are impacting business, but all of them are suffering from a lot of skepticism as to what the actual payoff for investing in these technologies really is.
In 2015, expect APM to be at the forefront of case studies and examples of how the deployment of each of these technologies is returning tangible benefits to organizations. Looking at each in turn:
Internet of Things
The forecasts are for 20 to 50 billion devices to be connected via the IoT over the next ten to 20 years, yet many wonder what are the economic drivers for doing so? Invariably, we hear that today the best real-world benefit examples are coming from the use of IoT-generated data to facilitate better Condition-Based and Reliability-Centered Maintenance (CBM & RCM).
While LNS Research attended multiple user group meetings throughout the fall of 2014, we saw numerous presentations by users on how they we using IoT-generated data to drive uptime to new levels, reduce unplanned maintenance, and improve customer satisfaction. The industries reporting these improvements ranged from airlines to water treatment.
In 2015, we expect this trend to continue and the stories to emerge from an ever-increasing number of industries.
Cloud and Big Data
In spite of continued concerns over security, private, and hybrid Cloud architectures are making their way into select manufacturing applications in this fall’s run of user group events as well. Again, users from a variety of industries used APM as a key example of how, by moving data to the cloud, they were able to consolidate information and gain better perspectives on their assets were performing.
While many of these examples came from industries other than manufacturing, such as transportation and utilities, in 2015 we expect manufacturers in all sub-verticals to report similar types of gains using cloud-based big data to gain insight into how to drive asset performance to new levels.
APM, especially from a field service perspective, has already been an early adopter of mobility solutions in the form of tablets, smartphones, and ruggedized/handheld applications.
In 2015 we predict any APM solution that doesn’t have a credible mobility strategy, including the use of location services, will lose significant traction in the marketplace. At the same time, we expect mobility tools like Google Glass, and similar but industrialized products, to show real payback when used in maintenance activities.
Even wearables like bio-sensors will start to penetrate APM, although in this case we believe it will be experimentation and not yet high volume deployments with definitive paybacks.
So the bottom line for all three of these tech trends is that the APM space will generate among the largest number of successful examples as well as the examples with the largest and most consistent paybacks. APM will become the Poster Child for tech.
2: Analytics Will Drive APM Payoff
As noted above, APM is delivering real hard-dollar payback today in the form of downtime reduction, improved productivity, and higher product or service quality. The number one contributor to these results is the application of analytics to both the data collected from individual machines as well as aggregated data in the cloud.
CBM has been one of the biggest beneficiaries of the spread of analytics, and in 2015 we will see analytics play an even bigger role in driving the predictive aspects of APM. With many companies moving their enterprise applications to the Cloud, and cloud providers including basic analytic functionality as part of their cloud services, many more organizations will have access to powerful RCM capabilities.
There will be some bumps in the road, as the analytic engines cloud providers supply have the basic functionality needed, but no specific analytical models that make RCM and CBM functionality an out-of-the-box solution. Many vendors like SAP, Infor, GE and others are investing heavily in creating data science/analytic groups to provide that domain expertise, but these efforts are just taking root.
Users should expect that when vendors do provide packaged capabilities related to APM that they will have to pay extra to take advantage of that domain expertise. Regardless, analytics will be the number one application area driving APM payback in 2015.
3: APM Solution Providers Will Remain Stratified in 3 Categories
APM is a broad space representing disciplines and application areas ranging from MRO procurement right down to intelligent “pending failure” alarming on the plant floor by smart machines. As such, vendors ranging from enterprise suite solution providers like IBM, SAP, Infor, and others to automation vendors like Emerson, GE, and others are all part of the APM ecosystem.
While there has been some consolidation in the marketplace with automation vendors like ABB buying enterprise solution vendor Ventyx or automation vendors like Schneider Electric buying APM specialist InStep, Emerson acquiring services APM services provider MRG, and GE investing in Meridium, the market is still not ready for extensive consolidation.
In 2015, expect the APM space to remain stratified into three categories: Automation companies, Specialist APM firms, and Enterprise Suite solution providers. As fast as acquisitions are happening new market entrants are jumping into the APM space. With analytics driving so much of the payback of APM we see new market entrants with highly specialized domain expertise driving market growth throughout 2015.
There may be a couple of big deals in the APM space in 2015, but it will continue the trends we have seen over the last year or two with no land-grab type of activity.
The Long-Shot Prediction
It is always fun to try and figure out what could happen that might radically change the industry, even though such an event is highly improbable. To that end, we offer our long-shot prediction on APM: A universally accepted centralized repository for asset performance data emerges.
Ideally, a cloud-based repository of asset performance data that would provide detailed information on failure modes and conditions for virtually all equipment in all applications would allow process and plant designers and operators to exponentially improve performance. The advantages are obvious and the benefits huge, but we say this is a long-shot simply because it is too soon.
Such a system is theoretically possible and technologically feasible, but the challenges of security, data ownership, liability, and metric standardization remain the major hurdles. Like many other good ideas we will see progress in this direction but organizational, political, and legal issues will stall progress.
Understand the capabilities of twenty of the leading vendors in the APM space by downloading our APM Solutions Section Guide. The guide contains comparison charts for the factors listed above and the detailed profiles of the twenty vendors ranging from automation companies, to enterprise software providers and includes many specialized APM solutions as well.
All entries in this Industrial Transformation blog represent the opinions of the authors based on their industry experience and their view of the information collected using the methods described in our Research Integrity. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.