How To Use Enterprise Asset Management To Optimize Capital Planning
Information is power when it comes to capital planning and purchasing. Unfortunately, many companies still lack a single source of truth to drive enterprise asset management decisions.
Data on building leases, equipment, vehicle purchases, and technology investments often lives in siloed spreadsheets across different departments. Accounting maintains a record of all expenses, but they don’t have insight into the total cost of ownership for an expensive asset over its lifespan, including its maintenance costs.
Your purchasing department has a list of all vendors you’ve used in the past five years, but they can’t easily see the long-term impact of those investments to determine whether it makes sense to buy or lease similar equipment in the future.
Meanwhile, your maintenance team responds to work orders but doesn’t have enough insight to anticipate when certain building systems are most likely to fail.
An effective enterprise asset management strategy brings all this information together so your organization can make more informed capital planning and purchasing decisions.
Here’s a closer look at how enterprise asset management supports capital planning and how to implement a smart strategy.
How enterprise asset management improves capital planning
Enterprise asset management is a combination of activities your company implements with the goal of improving the useful life of your buildings and equipment, reducing costs, and improving long-term planning. These activities include asset tracking, cost analysis, inventory, inspections, maintenance, and more. EAM software sets the foundation for a strong enterprise asset management strategy by bringing all these activities into a single digital platform everyone on your team can access anywhere.
The collective effort enhances your capital planning processes in several ways, including:
Improving maintenance and cost transparency
Consolidating building, asset, and maintenance data into a single, centralized platform makes it easier to make capital planning decisions. With robust data analytics, you can see your company’s total maintenance costs at a glance and understand how every building and asset contributed to them.
This can help you identify trends and plan new investments accordingly.
For instance, if your maintenance team spent over $10,000 on plumbing repairs in a single building last year, it may be time to upgrade the entire system.
Facility managers and machine operators can also perform mobile inspections to enhance your understanding of your assets. They can use a standard inspection checklist and select pre-populated failure codes to give your company a more accurate assessment of the most common maintenance issues.
When you can pinpoint a single factor contributing to a significant portion of your maintenance costs, you can make more informed decisions about where to invest in improvements.
Reducing maintenance backlogs
If your facilities maintenance team has a growing backlog of deferred maintenance, you’re not alone. The average school building in the United States is over 40 years old and school buildings collectively report an estimated $500 billion in deferred repairs, according to security company Allegion. The same report found deferred maintenance costs up to 30 times more than early intervention when you factor in the costs of downtime and more expensive repairs required later.
A proactive enterprise asset management strategy streamlines preventative maintenance to reduce backlogs. With enterprise asset management software, facilities managers and maintenance technicians can schedule activities in advance according to the manufacturer’s guidelines and receive automated reminders when it’s time to make repairs.
Improving efficiency and productivity
When your team spends hours each week searching for information, they have less time to spend on more strategic priorities like developing a capital improvement plan and budgeting for new investments.
Enterprise asset management software makes your entire team more productive by allowing everyone to see what activities are scheduled, how much inventory you have on hand, and where to find your most important assets.
Your team can upload photos of new assets and important documents, such as lease and warranty information, directly into the system so they’re easy to reference later. They can retrieve any information about an asset simply by scanning a barcode on their mobile device.
Improving forecasting accuracy
By consolidating data across departments – including asset availability, maintenance needs, supply chain and inventory, purchasing and other financial functions – enterprise asset management software helps you monitor key performance indicators and forecast future needs.
It’s easier to decide how many parts you need to have on hand to keep your buildings and assets running smoothly, when to buy or lease equipment, and whether it is more cost-effective to repair or replace it.
Enterprise asset management best practices
Develop an asset strategy
Gathering information on your assets only wastes time and money if you have no plan for how to implement the information. Just as it’s imperative to have buy-in from the right team members when developing a preventative maintenance plan, it’s equally important to create a plan and involve your team when implementing EAM software.
Tap your facilities maintenance managers, operators, technicians, and purchasing managers who will benefit most from the solution. You’ll also want feedback from executives, including your CFO and corporate real estate manager, to determine what data they need for capital planning purposes. This cross-department collaboration will ensure the long-term success of your enterprise asset management strategy.
Find enterprise asset management software that supports your needs
Consider what aspects of asset management you want to simplify, automate, or improve. Are you primarily focused on asset tracking and preventive maintenance scheduling, or do you need more in-depth inspection capabilities and advanced reporting to conduct a cost analysis?
What other systems do you need to integrate with?
Do you use a GPS system to track the mileage on your vehicles? Do you use space management software to keep track of all your building data?
Will the software you choose work well with your existing accounting and lease management solutions?
You’ll also need to consider the pricing model and how easily you can scale the solution as your organization grows.
Invest in employee training
The software you choose should be easy for anyone to use, but the employees who use it most often need to be fully familiar with its features and functions. To maximize your investment in EAM software, employees need to feel confident, competent, and engaged in the new system. If they believe it will make their jobs easier, they will be more likely to use it in their daily activities.
The case for investing in EAM software
The International Data Corporation (IDC) released market analysis in June that projects enterprise asset management applications will reach almost $3.8 billion in revenue in 2025. They attribute this growth to the aftereffects of the global COVID-19 pandemic, which increased the need to assimilate on-site and remote information sharing and optimize capital planning and purchasing during a time of widespread uncertainty and disruption. To maintain a competitive advantage, your company needs full visibility into the performance of all your assets and their expected useful life so you can plan your purchases at the best possible time.
EAM software gives your team a clear picture of all your assets and how they impact your bottom line. The long-term benefit is smarter capital investment and a mindset of continuous improvement, leading to better business outcomes.
ManagerPlus offers powerful, lightning-fast, cloud-based enterprise asset management software that can help you in all these areas.
You can see detailed information about every asset throughout its lifecycle, manage preventive maintenance and work orders, optimize inventory, and create customized reports to manage the metrics that matter most.
Our EAM software sets the foundation for predictive maintenance and other advanced asset performance strategies by bringing all your critical data into one place.
To learn more, request a demo today.