Managing any kind of business is not an easy task, and with today’s competitive marketplace, you can use all the help that you can get. And in many cases, you can help your business grow with many different systems. Here we will look at two of them: EAM vs ERP systems.
Every business has so many aspects that require proper handling, maintenance, and organizing at all times.
It is merely impossible for one person or even a team of people to always stay on top of everything, especially when it comes to small business asset management. Luckily, we live in the era of technology, and there are some useful systems that can make your job so much easier and more efficient.
In case you are not familiar with EAM and ERP systems, or you just have trouble deciding which one would suit your company the best, keep reading.
We prepared some interesting facts and comparisons in order to help out with this difficult decision.
Defining the EAM and the ERP systems
For starters, let’s think about these two systems separately. We are going to define them one by one in order to compare them properly.
What is EAM?
EAM (Enterprise Asset Management) is also known as CMMS (Computerized Maintenance Management Systems), or rather an extension to the CMMS.
It is specifically meant for managing and maintaining the physical assets of a company. The goals are to maximize and improve those assets, as well as to increase their profit.
These are the main functions of the EAM software:
- Cutting costs
- Monitoring and improving assets performance
- Risks forecasting
- Safety and materials management
- Planning and scheduling
Since EAM is most beneficial to companies that use expensive and complex equipment operations, here are some industries that use EAM software the most:
- Gas and oil companies
- Mining
- Chemical industry
- Manufacturing
What is ERP?
ERP (Enterprise Resource Planning) is created as an extension of its predecessor MRP.
It is software designed to integrate different aspects of your company into a single system.
All your business activities are organized and managed, while also easily accessible to every department of your company.
This software consists of modules, and here are a few main ones:
- CRM
- HR
- Supply chain management
- Sales
- Finance
Here are also the main benefits of the ERP system:
- Automation of certain tasks
- Improving efficiency by creating a single database
- Forecasting and lowering risks
- Promoting your team’s collaborations
- Eliminating duplicate and incompatible technologies
The Comparison
Now that we managed to define the two systems, we are able to make a thorough comparison which will help us to deliver the final verdict.
ERP is a system that is created for HR and sales sectors while also handling any process connected with assets costs.
On the other hand, ERP lacks functions such as condition monitoring and asset maintenance, which is something a lot of companies are looking for.
That is the area EAM is in charge of. This software is made exactly for maintaining and managing assets, as well as improving quality. Its goal is to improve operational performance.
So, when we compare them like this, what is the conclusion?
The main crucial difference between these two systems is the fact that they manage different areas of the company.
ERP software is primarily focused on financial assets and EAM on the physical ones.
It is impossible for one single software to serve all purposes. Different functions require specific tools adjusted to a specific type of needs.
An example
Delek Refining, a company that operates two oil refineries, was involved in a massive software selection and evaluation process.
In this endeavor, they were aided by a consulting and technology service company called Stratum Consulting Partners.
These are the areas being evaluated:
- system navigation
- asset management and asset reliability
- planning and scheduling
- work management
- shutdown coordination
- capital project tracking
- inventory and vendor management
- accounts payable
- purchasing and reporting.
And what was the result?
Both in functionality rating and in ease of use and efficiency rating, EAM came up with better scores.
Keep in mind: This is research of just one company. For their needs, EAM seems to be a better choice.
If focused business asset management is your top priority, chances are, you will agree with their findings.
The Integration
Why not both?
If they are in charge of different things, maybe the solution is to combine the two. But this is when it gets a little bit tricky.
Don’t get us wrong, it is not an impossible task, but it is not without its challenges. They must be integrated properly.
Both systems are intricate, complex, and expensive. They also have very different databases, table structures, and upgrade issues.
So basically, it is quite a challenge to get them in sync, communicating, and sharing data.
In order to relieve some of the costs and make the integration process run a bit more smoothly deciding where the business process (ERP or EAM) will be executed is a key factor.
Also, here is some other good news – The integration process is easier than it was before. That is mostly thanks to these few developments:
- constant and rapid advancements in technology
- rationalizing the flow of information between these two systems
- and, as we mentioned earlier, understanding where certain businesses should reside.
The Verdict: Partners or Competitors
As far as the competition is concerned, EAM and ERP can hardly be called competitors.
They are focused on different areas of the company, and there is rarely any overlap.
This means that if they are integrated, they tend to complement each other.
In other words, each system is beneficial on its own, but it can also be a part of an exquisite and productive partnership (as long as there is an effective integration strategy in place).
Whether it is based on financial or technical (or some other) aspects, some companies tend to choose just one of these systems. While others seek and form their strategic plan in the cooperation of both ERP and EAM.
So, when starting your own company, it is especially important to know these differences, the benefits, and the whole process.
Good planning is the key to a successful, well-organized, and profitable business. And thorough research can help you make the right decisions and cut costs wherever possible.
Final Thoughts
Both ERP and EAM have their own specific purposes.
Since they are focused on different areas of business, it is difficult to say which one is better for your company.
Perhaps integration is the way to go. In that case, successful cooperation between these two systems might be the perfect solution.
That decision is completely up to you, and now you have all the necessary information to make it.
