LNS Research Principal Analyst, Dan Miklovic continues his series on the Digital Transformation, and the large role Enterprise Architecture plays.
At LNS Research, we hold the position that Asset Performance Management (APM) encompasses a broad range of solutions, all of which contribute to the process of keeping the production assets used to produce a businesses products or services operating at optimal levels.
But what do our survey respondents have to say about which solutions contribute most to their success?
APM solutions range from the sensors on the plant floor all the way to the enterprise level software such as Enterprise Asset Management (EAM), or computerized maintenance management software (CMMS) applications. With such a broad range of solutions some of the questions we asked in our APM user survey were “Which vendors contribute to your APM performance?” and “Which have the least impact?”
We categorized vendors as automation vendors, traditional APM vendors [such as those that enable Condition-Based Maintenance) (CBM)], Reliability Centered Maintenance (RCM), and Enterprise Level Applications like EAM or CMMS. Not surprisingly, 38% of the respondents said all APM vendors were equally important. Of the remaining respondents there was wide disparity as to which types of solutions users see as contributing to the success of their APM programs.
Automation Vendors Viewed as Contributing Least to APM Success
With 21% of remaining respondents saying that automation vendors contribute the least to their APM success, it appears that the Industrial Internet of things (IIoT) has yet to take hold vis-à-vis APM. Since much of the information that enables APM comes from the automation systems and sensors in the plant, it seems clear that automation vendors need to both craft a better message about their role in APM, as well as provide value-adding solutions for APM, not that some don’t already do this.
LNS Research’s position is that the IIoT is going to enable new business models based on optimal APM performance such as providing capacity instead of capital. Another example would be selling manufacturing as a service such as Rolls-Royce already does with jet engines. Or, at the least, availability services will be sold by providing maintenance under contract with guaranteed uptime. Since automation suppliers will be providing much of the technology that Original Equipment Manufacturers (OEMs) use to enable these capabilities, they play a critical role in the APM value chain, lest they become commoditized. They need to address the perception they are not as important to APM performance as other solution providers.
EAM & CMMS Vendors Are Not Far Behind in Value Perception Problem
With 18% of the remaining respondents indicating that EAM and CMMS vendors contribute the least to their APM success, these vendors came in second as to which solution class contributes the least to APM success. Like the automation vendors, enterprise software providers need to consider the APM value they are bringing to the table as well as their messaging regarding how they can enable better APM performance. Since most of the enterprise level providers also offer cloud-based Big Data and predictive analytics capabilities. They do play in the APM IIoT sector, although like automation vendors, many are not adequately explaining how they can deliver value to clients.
Specialized APM Vendors Perceived as APM Adding Value
Only 8% of respondents said their specialized APM solution provider was the least important to their APM success. This is not surprising since the core of APM is about improving asset performance, and the specialized solution vendors have focused on CBM and RCM related functionality. Both of these areas are key to achieving optimal asset performance. The solution providers delivering this functionality have done a good job of establishing their value proposition. EAM/CMMS and automation vendors that have CBM and predictive analytics capabilities need to both better communicate their capabilities, as well as provide proof points that they offer functionality equivalent to the specialist providers.
Some Users Do Not View Solution Providers as Providing Value
The most interesting revelation from the survey was that 15% of the respondents said none of the vendors were important to their APM success. Unfortunately, there was no follow-up question for respondents that answered this way to explain where they did see value. Based on responses to similar related questions, we believe the message they were conveying was that the technology is not as important as ensuring the right processes and people are in place.
This view may be somewhat shortsighted. Technology by itself cannot compensate for poor processes or unskilled people but it does play an important role. It is the balance of people, process, and technology that enables Operational Excellence (OE). Regardless of whether you are looking at APM, Manufacturing Operations Management (MOM) or any other critical business process area, Operational Excellence is dependent on ensuring that the right technology is in place to enable people to accomplish the proper processes.