When you’re searching for the right enterprise software, you’ll inevitably encounter many acronyms. Often, these sound similar to one another, which is the case with ERP and EAM.
Standing for enterprise resource planning and enterprise asset management, respectively, these platforms share some common features.
Today, we’re taking a look at the distinctions between EAM vs ERP to help you better understand how each works and which is best for your organization.
What is Enterprise Asset Management (EAM) Software?
Modern EAM software is considered a superset of computerized maintenance management systems (CMMS). Not only can it help organize maintenance-related tasks, but it’s also designed to manage the lifecycle of your company’s various assets. As such, it’s most commonly used in industries that keep a large number of physical assets on site.
For instance, manufacturers that require fleets of vehicles, equipment, or machinery can use EAM software to maintain, monitor, and manage those assets. With the data the system provides, they can also forecast future needs and material requirements.
With these insights, users can take a proactive approach to preventative maintenance. They can create maintenance schedules, set task-based reminders, and maintain detailed records, all within an asset’s individual profile.
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What Does Robust Asset Management Look Like?
Through IoT connectivity, users can also leverage EAM software to stay up-to-date on the condition of their assets at all times. This allows them to know when a part is about to fail, which saves money on repairs in the long term.
In addition to managing machines, EAM software can also be used to manage:
- Supply chain activities
These features can offer cross-departmental value. For example, EAM allows you to closely monitor the movement of hazardous materials, identify when stock levels are dipping, and submit purchasing requests when your department needs a certain part.
With the ability to closely monitor asset performance, you can also look ahead to the future, anticipating how long each asset will last. This helps you control costs and plan for replacements accordingly.
What is ERP Software?
Enterprise resource planning (ERP) software allows you to automate and manage your organization’s day-to-day operations. With the right platform in place, you can eliminate much of the manual work associated with the following functions, among others:
- Manufacturing and distribution
- Supply chain management
- Human resources
- Customer service
With a centralized data location, teams can access the information they need from anywhere, at any time. This improves both operational visibility and the customer experience.
EAM vs ERP: Which One do You Need?
Investing in an EAM or ERP solution is a major business decision. Here are a few points to consider as you weigh your options.
1. Asset Focus
First, consider to what degree your organization is asset-centric. Do you rely on heavy machinery to complete your daily operations? Are you responsible for fleets of vehicles or different facilities?
If so, then EAM software fits the bill. It’s narrower in scope than ERP software but, in many cases, offers a more robust approach to asset management.
Even if you already own and use an ERP system, you may still need EAM software for more specialized asset-focused functionality.
On the other hand, if your organization depends more heavily on digital assets than physical ones, then an ERP system can help you manage and maintain those virtual endpoints. This way, you don’t have to worry if you’re fully utilizing the features available in an EAM platform.
2. Business Size
While ERP software is often associated with larger companies, it’s become evident that small-to-midsized businesses can also realize the benefits it provides.
Still, the average company size of EAM customers is typically smaller than ERP customers. This is because EAM software has many advantages for smaller organizations that want to take a more controlled approach to asset management. For these companies, most ERP solutions may be too broad or powerful for their needs.
That’s not to say that large, asset-centric businesses can’t benefit from EAM, but it is still an important industry trend to note.
3. Existing Software Deployments
Wondering if you need an ERP system? Start by assessing the IT systems you already have in place.
If you already have a CRM, HR, or SCM system, then an ERP system might be a way to replace these systems and centralize disparate functions.
The same holds true if you haven’t yet implemented an enterprise solution for functions such as accounting, manufacturing, and supply chain activities. In this case, an ERP implementation can automate these functions and help streamline your operations.
To determine if you need an EAM system, instead, we recommend conducting a similar technology assessment. If you already use other enterprise software and you simply need a tool to help manage your assets, then an EAM solution might be a good fit.
Select the Right Software for Your Needs
In the case of EAM vs ERP, there is no clear winner. Although these two software solutions sound the same, they each offer a unique set of capabilities.
If you’re mostly interested in a platform that will allow you to manage and track your company’s physical assets, then consider an EAM system. However, if your needs are broader in scope and encompass everyday back-end activities, then you may need an ERP system, instead.
In either case, our ERP consulting team can help you select the right vendor and negotiate favorable terms that will save you money. Contact us below to learn more about our ERP selection and ERP contract negotiation services.