INFOR EAM AND CAPGEMINI

Asset-intensive industries: Finding the straightest path to the cloud Industries like chemicals, refining, utilities, and manufacturing can hold more than half

of their balance sheets in heavy assets. In these industries, production depends on

asset availability, which becomes a key factor in profitability and revenue growth.

A proliferation of new technologies for connectivity, analytics, and predictive systems

have become available, promising to improve efficiency and results. However, these

coming changes can be overwhelming. Many companies feel pressure to adopt new

technologies all at once, but they don’t have a clear view of how or whether that

investment will pay off.

In this paper, Capgemini and Infor look at how companies are embarking on this

journey, and how a key metric—return on net assets, or RONA—can be favorably

impacted through a well-planned approach to technology adoption that makes

sense for your business.

1Perspectives: Capgemini and Infor EAM

The challenge: how to get there from here It’s not enough to follow a generic prescription for “where to

start.” Many companies hope to jump right in and adopt the

most sophisticated asset management tools and techniques

available. But every company’s asset management practices

need to mature on a predictable path in order to derive the

full value possible.

How mature is your asset strategy? For asset-intensive industries, profitability and growth

depend on how efficiently assets are employed. That

includes minimizing downtime, maximizing availability, and

managing changeovers, among other things. Capgemini

studies show that in recent years, RONA—the key metric

used to assess performance—is declining in many of

these industries.

Eliminate break-downs up to

70%

Reduce downtimeby up to

50%

Reduce scheduledrepairs by up to

12%

Increase overallproductivity by

24%

Overall productiongrowth up to

27%

Increase in OEEby up to

21%

Reduce maintenacecosts by up to

25%

Reduce capitalinvestment by

3-5%

Increase averagegross margin by

55%

Increase averageoperating margin by

18%

Operational impact Financial impact

Additionally, a McKinsey study shows that many asset-

intensive industries such as oil and gas, chemicals, mining,

and construction are lagging other industries in digitization

of the asset management function. This trend has been

especially pronounced since 2009, when these industries

began underinvesting in asset management as a result

of the market crash, and it correlates strongly to reduced

productivity growth today.

But current trends show an uptick in in the economy,

creating an opportunity for companies to catch up with the

investments they should have been making, in order to return

productivity growth to its full potential.

The building blocks of digitization A wave of new technologies—including machine learning,

analytics, and sensors—promises enormous benefits to

the asset management process. Sensors and connectivity

What is the value in going digital?

2Perspectives: Capgemini and Infor EAM

Introspection

• Evaluate current asset

management system and

practices

• Identify the organization’s

strengths and weaknesses

• Learn latest industry standards,

best practices and tools

Envisioning the future

• Leverage the best technology

• Understand how to evolve your

current process

• Create a roadmap

Root causing

• Productivity loss or quality issues

• Below par overall equipment

effectiveness (OEE) or

deteriorating performance

• Maintenance cost overruns

might be the biggest potential contributors to better asset

management, because they offer capabilities to obtain

performance data, apply analytics, and determine what’s

happening and what to expect next.

Enterprise asset management (EAM) software is a key

building block for achieving digital manufacturing benefits.

Companies hope to be able to devote any machine to the

highest margin product, and achieve the highest available

uptime from that machine. Every decision in the business

must follow from that. EAM makes decreased downtime and

in-depth analysis of data possible.

Smart factories are expected to yield significant benefits for

companies over the next five years. Capgemini studies show

that smart factories should improve performance by 7x to 13x

in on-time delivery, quality, inventory, logistics, labor cost, and

overall productivity. Improvements of that magnitude easily

justify the investment in updated technology. Now, 76% of

manufacturers report having a smart factory initiative at

some stage of development, but only 14% are satisfied

with their progress.

The value of going digital falls into two categories:

operational and financial. The operational gains flow through

to the financial side in predictable ways: fewer breakdowns

lead to lower maintenance costs, which leads to better

revenue and higher profitability. CFOs are likely to welcome

the prospect of lower maintenance costs, reduced capital

investment, higher gross margins, and better operating

margins. Other business benefits of digitization include better

SLA adherence and higher workforce utilization.

A McKinsey study shows that many asset-intensive industries are lagging other industries in digitization of the asset management function—and it correlates strongly to reduced productivity growth today.

Why EAM assessment?

3Perspectives: Capgemini and Infor EAM

Forming an action plan So where can you start? Look at metrics that contribute to

your RONA, then compare those to benchmarks for your

industry. Using that information, you can build an action plan

based on an asset management maturity model.

Capgemini and Infor are proponents of the concept that

every EAM action plan should begin by assessing the

organization’s current asset management maturity level.

You can’t successfully leap to the most sophisticated level

of asset management before mastering the entry and

intermediate levels—just as you can’t master calculus without

understanding algebra, which you can’t master without

knowing arithmetic. Attempting to jump ahead too quickly

will prevent you from achieving the full value of your asset

management efforts.

The purpose of the maturity model is twofold: To show

you what building blocks you need to have in place

before moving to your next phase of development, and to

understand how to build a roadmap that takes you to a state

of full maturity.

How and why it works Capgemini and Infor begin with an assessment. A common

scenario is that an organization has multiple systems tracking

various aspects of asset management, such as reliability,

labor, procurement, and so on, but those systems don’t talk

to each other. A firm in that scenario is put at level zero on

the maturity model. Once they implement more robust EAM

technology, automate processes, and have SOPs in place,

they move to level one, where efficiency starts to improve.

When they get to level one, they can start to think about

predictive maintenance, seeking a 360-degree view of

metrics, OEE measurement, and other areas. That’s where

they can begin to progress along the asset maturity path.

In one recent example, Capgemini worked with a company

that had excellent systems, but the limitations of those

systems revolved around a process. The company hadn’t

instructed technicians to record a cause code when

correcting equipment failures, so they had no data for

performing root-cause analysis. Without that data, the

technicians had too little information to perform predictive

maintenance. The company’s problem wasn’t technology, it

was their process, and so they couldn’t move up to the next

level. Once someone pointed out the gap in their process,

the solution was easier than they had thought.

Why do an assessment? Doing an assessment is the only

way to know your strengths and weaknesses. You’ll gain a

view of the root causes of problems, which may not have

been obvious before. You’ll also be able to build a roadmap

for moving towards digitization.

When you do an assessment, Capgemini and Infor

recommend beginning with a focus on six dimensions:

• Asset information management and analytics

• Process management

• Reliability and performance

• Governance and standards

• People and culture

• Tools and technologies

You need to deal with the people and process issues before

diving into the tools and technologies. Examine how you’re

training people. How do you evaluate them? How do you

incentivize them?

Once you do an assessment, you will find that you’re more

advanced on some dimensions than on others. Match your

state of maturity to your growth plans; make sure they’re

congruent.

Get input from end users for a first-hand view of your

technology. What’s working well, or not working at all?

Finally, be sure you calculate readiness scores using

industry standards. The Society for Maintenance & Reliability

Professionals (SMRP) publishes a best practices guide for

standardization and benchmarks.

4Perspectives: Capgemini and Infor EAM

Learn more about Infor EAM ›

Why asset management digitization is critical Asset management is a key driver of profitability. Proper

maintenance of equipment can significantly reduce the

overall operating cost while boosting the productivity of your

operation. Best-in-class asset management software, such

as Infor EAM, is a critical tool for realizing benefits associated

with greater equipment uptime and lower cost of operations.

Accelerators and tools are available to help you realize the

full potential of EAM, including predictive maintenance and

sharing best practices.

An EAM assessment provides a roadmap for the steps that

will have the most significant impact and therefore deserve

the greatest investment of time and resources.

The road to digitized asset management in the cloud will not

be the same for every company, as baseline asset strategy

maturity forms the foundation of where to begin.

Trust experienced partners to help you find the straightest

path to the cloud. Capgemini is a market leader in digital

consulting, cloud transformation, system integration, and

managed services. Infor is a market leader in cloud-based

EAM applications with industry micro-vertical specialization.

Together, we offer the expertise you need to move your

asset management operation towards digitization and

maintenance maturity.

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