Asset Performance Management: An IT Perspective. Executive Overview Asset Performance Management - An IT Perspective... 4

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1 ARC STRATEGIES By Robert Mick & Sid Snitkin JUNE 2010 Asset Performance Management: An IT Perspective Executive Overview... 3 Asset Performance Management - An IT Perspective... 4 Role of IT in APM... 9 Align APM IT with Your Business Priorities Develop an APM IT Vision and Roadmap Align Technology Trends with APM IT Recommendations VISION, EXPERIENCE, ANSWERS FOR INDUSTRY

2 Project Performance Management (PPM) Handover Asset Performance Management (APM) Funded Projects Asset & Project Portfolio Management Modification Requests New Facility Requests IT Is Fundamental to Effective Asset Performance Management Intelligence & Analytics Environments Information Access APM Role-Based Environments Workflows Information Access Mobile Devices Secure Communication Mobile Backend Applications Domain Application Environments Business Processes Application Information APM Applications Intelligence & Analytics Security Infrastructure Role-Based Environments MDM & Quality Mobility Information Management Social Media Workflow & Integration Application Development Deployment Monitoring Management Collaborative Technology Platform Organizations Need an Appropriate APM IT Strategy 2 Copyright ARC Advisory Group ARCweb.com

3 Executive Overview ARC s Asset Lifecycle Management (ALM) research spans a variety of concepts and models designed to help businesses examine and improve management of valuable company resources, including not only physical assets, but also the related people and information assets. Each business must determine the priority of asset management initiatives relative to other business initiatives and activities. This Businesses need an organized plan for Asset can range from incremental enhancements to Performance Management IT systems (APM existing maintenance programs to developing IT). That plan needs to recognize the broad a comprehensive enterprise-wide ALM program. nature of APM programs, the diversity of software applications used by APM practitioners, and the special characteristics As shown in the figures on page 2, ARC categorizes ALM activities into three areas: project of asset information. IT should take the lead in APM IT and may benefit by reducing costs and executing projects more effectively. performance management (PPM), asset performance management (APM), and asset & project portfolio management. Clearly, all are related, but represent different sets of business processes with different participants. All ALM areas require supporting IT capabilities, but strategies in each area may be slightly different. Each must address the applications used by domain practitioners and support for the specific information they create and consume. This paper focuses on APM where the primary participants are operations, maintenance, and some business functions. IT Applications for APM focus on operating and maintaining complex facilities. Associated information management requirements range from simple document and records management, to comprehensive collaborative environments with automated information management processes and formal quality programs. While most other ARC documents about APM address topics from the perspective of APM practitioners, this document is intended to introduce IT professionals to APM and establish an understanding of the vital role that IT must play in APM initiatives. One of these roles is to develop and manage an APM IT strategy, including basic technology capabilities, off-theshelf asset related products, and possibly internally developed crossfunctional workflows, environments, and integrations. Copyright ARC Advisory Group ARCweb.com 3

4 For the most part, APM IT needs are similar to and should be aligned with other domains. But APM IT must also address some unique requirements, particularly requirements for asset information management (AIM). All should be articulated in a formal APM IT vision, possibly using reference architectures and a road map that can be used across multiple IT projects. Asset Performance Management - An IT Perspective All businesses have some form of assets and it is vital that executives consciously decide how those assets should be managed. This decision process starts by deciding what constitutes business assets and examining how they relate to business success, including consideration of risk. The process should result in assignment of specific asset-related responsibilities within the business, possibly identifying a single executive to manage all asset-related initiatives. ALM Encourages Thinking about All Aspects of Asset Performance ARC s Asset Lifecycle Management (ALM) concepts provide a comprehensive view of assets that can help businesses develop their asset management strategy. The following is a very brief overview of ALM to provide context for APM and APM IT. Numerous other ARC strategy reports provide additional information on ALM and APM. ALM Takes a Broad Perspective of Assets ARC s ALM models take a broad perspective on assets, including not only physical assets, but also the people and information associated with those assets. This perspective encourages broader thinking and enables improvements and optimization at a level well beyond individual pieces of equipment. Traditionally, businesses have not started with this perspective, and many still take a more narrow view. However, it is necessary to include people and information improvements to reach higher-level asset performance objectives. ALM does not include all information and people. Other IT and HR programs address these broader management needs. In fact, these programs and their resulting systems may be leveraged in an ALM program. 4 Copyright ARC Advisory Group ARCweb.com

5 ALM Categorizes Activities into Three Major Areas As shown in the figures on the page 2, ARC categorizes ALM activities into three major business areas: PPM, APM, and asset & project portfolio management. All are related because they are concerned with assets, but each area represents substantially different business processes, different primary participants, and different information sets. ALM processes are complex and IT support for efficient and effective workflows is fundamental to good performance in every ALM area. As one might expect, some of the more persistent ALM challenges are associated with overlaps in PPM, APM, and portfolio management. This includes overlaps in responsibilities, cross-functional processes, shared information, and information transfers between areas. Consequently, this guarantees the IT organization a role in every ALM activity. When businesses do not have an enterprise-wide ALM program, the IT organization is in a unique position to identify opportunities for improvement across all the ALM areas, as well as across business units, projects, etc. Information Management Is Particularly Critical for ALM Every ALM area leverages IT extensively in the form of domain-specific business applications. While practitioners appreciate the value of these solutions, they often ignore overall management of information across applications, domain stakeholders, and ALM areas. This often represents some of the most significant ALM challenges and opportunities for improvement. This is captured in ARC s models as the need for comprehensive information management strategies within each ALM area, which we call project information management (PIM), asset information management (AIM) and asset & portfolio information management. We ve also identified a strategy for managing information exchange and sharing between areas, which we call asset lifecycle information management (ALIM). ALM information management strategies are extremely broad in scope, including information in many different forms (hard copy, electronic), handover guides to manage contractual issues, etc. The IT organization needs to support and be involved in developing these strategies, but management is generally delegated to domain management. Copyright ARC Advisory Group ARCweb.com 5

6 IT for APM The Focus of This Report This paper is about IT support for all of the processes, workflows and other activities associated with APM, including AIM. We refer to this as APM IT and view it as a specific application area for the IT organization, comparable to programs like manufacturing IT, PLM, etc. which address specific issues related to a specific business area. The primary participants in APM are people in operations, maintenance, and other business functions required to use and care for capital assets effectively. As explained above, the IT organization plays a supporting role for the rest of the APM organization as a provider of enabling technologies for their workflows. In some cases, IT may also play a direct role in some AIM-related activities. ARC s model for APM distinguishes between the business processes involved in physical asset management (APM processes) and those focused on asset information management (AIM processes). APM processes are what the asset practitioners (maintenance, operators, etc) do to manage the assets. AIM processes are the things the organization does to manage its asset information. The table below indicates some AIM processes where IT may play a direct role. Generally, this will still be in close collaboration with information owners, which may be asset practitioners and others. AIM Processes Provide a Framework for Information Quality 6 Copyright ARC Advisory Group ARCweb.com

7 Asset (Object) Attribute Value Note ID P Type CPump DFlow 200 CFM PR-MAX 3.5 Material Ni-222 Internal ARC Strategies June 2010 AIM Is a Key Issue for Every APM IT Strategy The intent for AIM is to help optimize asset performance during the operation phase of an asset s lifecycle. However, the IT organization s involvement in AIM has to begin with the planning of new assets to enable information to be acquired and processed in a manner that will support effective operations. Drawings P&ID Installation Electrical Piping Virtual Views Meta Data P Documents Manuals Operating Procedures Maintenance Procedures Formal Structures Project operations create considerable asset information, much of which has to be loaded into the IT systems that support operations, maintenance, and on-going business activities. This loading Data process usually involves much effort because Instrument Lists Equipment lists of the volume of information, and because of Bill of Materials Assemblies P Sub-Assemblies unique information transformations, difficult Standards Performance D quality issues, the need for multiple perspectives, and History Virtual Models others. Asset (Object) Attribute Value Note A multitude of diverse information is created ID P when designing, building, and commissioning Type CPump DFlow 200 CFM facilities. While some is directly useful PR-MAX 3.5 Material Ni-222 Internal for operations and maintenance, other information has to be transformed into different forms to meet APM needs. Much additional information must be created, such as spare parts lists and maintenance procedures, for an effective and efficient facility. All this information must then be structured for easy access and maintenance. AIM Has to Support Diverse, Complex Information about Assets Other, more dynamic asset information is created during operations and maintenance activities and used by different stakeholders to manage performance. For example, this could include asset performance data, asset condition information, inspection data, work orders, parts inventories, and others. This must be planned for in the AIM strategy and monitored on an ongoing basis for quality. Identify APM Activities in Your Business ARC s ALM models define asset management as an enterprise-wide activity with visibility to asset-related information at all levels of an organization. Of course, not all businesses view asset management this way, and many have no visible enterprise-wide ALM program. This is to be expected because business priorities and related asset management needs vary Copyright ARC Advisory Group ARCweb.com 7

8 considerably. Perspectives also vary by vertical industry. For example, most process industries have a strong asset management focus with mature asset management processes. At the same time, many discrete manufacturing industries restrict the maintenance perspective to the physical assets. Even when businesses have no enterprise-wide or clearly defined ALM program, the IT organization should be vigilant about recognizing the need for APM IT and AIM strategies. In these situations, IT should assume the role of coordinator, looking for related programs and project requirements, providing consistent solutions, and including information sharing. When there is no identifiable, central management for asset-focused programs, it may be a challenge for IT to recognize APM-related projects and support requests. The table below lists several programs that a business should consider as APM activities. Business may have one or more of these (and other) programs, although different names may be used. Activity Enterprise Asset Management (EAM) Reliability-Centered Maintenance (RCM) Preventive Maintenance (PM) Condition-Based Monitoring Maintenance Planning & Scheduling Service Parts Management Service Management Work order Management Return on Assets (ROA) OEE Operations planning and scheduling Simplified Description A broad view at maintenance and many of the other activities in this list. Also a solution category Processes, initiatives and solutions focused on asset reliability Common maintenance program aimed at avoiding expensive and disruptive failures Measurements and analysis of asset conditions for early failure detection and prediction Optimizing the use of maintenance staff with minimal disruption to operations Efforts to minimize repair time and have material onhand for PM while managing parts inventory cost Managing external services related to assets Scheduling requests for asset related work and monitoring performance Program aimed at getting optimizing asset investments Measurement and analysis of overall asset effectiveness Driven by product requirements, but requires high quality asset information Typical Asset-Related Activities 8 Copyright ARC Advisory Group ARCweb.com

9 Given the IT organization s additional responsibilities when it comes to AIM, it is also important to be aware of related ALM activities that may rely upon well-managed asset information. For example: Projects require asset information for existing facilities when they are being modified or when new facilities may use similar equipment Portfolio management requires asset information to evaluate the viability of continuing current operations and evaluating requests for modifications Corporate programs for sustainability, energy management, etc. will often need asset information to drive higher level metrics Role of IT in APM In general, asset management practitioners (as opposed to IT) own the APM processes and information. As such, they are responsible for seeing that the necessary processes and information are identified, developed, and maintained. However, the IT organization is responsible for delivering and maintaining APM solutions to leverage these capabilities, including implementing asset practitioner work environments, applications, workflows, business processes, and all associated underlying technologies. None of the operations and maintenance programs described in the previous section constitutes a comprehensive APM program, but all fall under the general category of APM. Typically, an IT organization cannot create an APM program where there is none. This requires initiative by the asset practitioners with appropriate IT execution support. However, an IT organization can take the initiative to create a comprehensive APM IT program, especially when the IT organization is centralized. For example, IT organizations typically see all information management projects, and can at least establish a practice of determining whether proposed projects should be placed within an APM IT strategy based on the specific information, processes, people, applications, project objectives, and others. Even if the IT organization is distributed in some way - possibly between business units - IT can at least create collaborative arrangements to study Copyright ARC Advisory Group ARCweb.com 9

10 possibilities for re-use across projects, develop enabling components, consolidate APM solutions, avoid duplicate efforts, and pursue other such opportunities. With primary responsibility for solutions, the IT organization should develop a formal APM IT vision and strategy. This vision should align with the business needs and perspective on APM. Vision might be captured in reference architectures that define technical components and a roadmap that establishes timing for working toward the vision. Together, these provide guidance for APM projects. Develop an APM IT Organization MRO Material Suppliers Corporate & Operations IT In general, APM is a cross-functional activity and every business has preferred ways to address activities that must involve diverse stakeholder roles. APM IT may be addressed with a collaborative council, as a set of Operations & cross-functional teams, or as a center of Maintenance Operators & Managers Maintenance excellence within the IT organization Technicians with support from other organizations. As indicated in the figure, many roles and organizations may be involved. AIM Performance Service Providers MRO Purchasing Equipment & Systems Suppliers Operate Maintain Performance Performance ROA Project Management The APM IT Team Consists of ALM Practitioner, IT Architects, and IT Support for AIM APM practitioners provide the requirements for APM IT and the IT organization implements those requirements. Many requirements come in the form of independent project requests. APM IT then requires IT people to coordinate multiple project requirements and implementations. However, not all IT work can be done within the scope and timing of projects. Consequently, a permanent APM IT council or cross-functional team is needed to attempt to develop general APM IT requirements that may drive long-term IT strategy for supporting APM. For example, general APM IT requirements can be derived from past projects, existing implementations, anticipated needs, industry peers and other external information sources, and possibly the APM vision. 10 Copyright ARC Advisory Group ARCweb.com

11 Align APM IT with Your Business Priorities We advise any new APM IT team to start by examining the business situation and how that might influence investments in APM and AIM initiatives. This examination might result in an APM vision that can serve as requirements for developing a more technical APM IT vision. Situation Business Commitment Action Optimize Preemptive Enterprise Maintenance Financial Visibility Asset Management is part of the way we think about our business Big asset investments are imminent! Want to get it right Asset Reliability and Performance are low Some costs are too high Asset performance focus Managing assets from a maintenance perspective Varies by business unit 100% Product driven Assets are depreciated Assets are repaired Holistic ALM initiatives Broad view of assets Formal ALIM IT Strategy Focus on ALM Formalize cross-functional needs and processes Formal APM IT Strategy Focus on APM Define metrics, identify and improve related roles, processes and information Centralize initiatives Collaborative (Multi-Dept) Business Unit driven maintenance initiatives ROI based investments Establish collaboration Examine business risk Develop appropriate Asset Lifecycle Vision Asset Management Needs and Strategies Are Driven by Business Situation The table above, a form of maturity model, may be useful in assessing a business asset management situation and needs. As indicated at the bottom of the table, some businesses get along with minimal asset management programs, and others need more mature enterprise-wide programs (moving up the table) to avoid or mitigate large financial, environmental, safety and other risks. For example, many businesses simply track assets in their financial systems, depreciating them over time. Of course, they perform routine maintenance on physical assets and repair these when they fail. This may be appropriate in certain industries where there is little opportunity to reduce business risk or improve performance with investment in enterprise-wide asset man- Copyright ARC Advisory Group ARCweb.com 11

12 agement programs. However, some businesses are in this situation simply because the company s asset management practices stopped evolving for any number of reasons. Some businesses incur very large incident costs and other penalties when assets fail to perform adequately. Others already know that performance is too low or quality is not manageable. These situations call for a focus on current APM and AIM practices and metrics to provide the information necessary to improve APM processes. A business may be embarking on a large capacity expansion or major asset renovation program, and New technologies and associated practices are always emerging that can benefit asset management perhaps it has not experienced a large asset program programs and the IT organization is for several years and its asset information is still mostly paper-based. From an APM perspective, this in a position to identify many of those opportunities for consideration. situation calls for operations, maintenance, and engineering to get involved in the capacity expansion activities sufficiently to plan a modern APM IT and AIM program, and make sure the necessary APM information is generated in time. Finally, even mature asset-related programs need to change over time to address new asset management challenges while continually improving performance (reliability, quality, etc.) and reducing cost. Develop an APM IT Vision and Roadmap All APM IT programs need some form of documented vision to guide investments and project decisions. This vision should include at least a reference APM IT architecture and technical roadmap to guide implementation of various business driven projects. In addition, the vision should drive investments in general IT capabilities that enable lower projects costs, faster project implementations, more re-use, more effective integration, and lower maintenance costs. Develop APM IT Reference Architectures No single vendor product satisfies all end user APM IT requirements. Consequently, several components are required and the selection of these components needs to be managed within an APM IT program. One approach is to standardize APM IT components using reference architectures. 12 Copyright ARC Advisory Group ARCweb.com

13 While not a detailed implementation architecture, an APM IT reference architecture identifies the applications and general technology included in the APM IT scope. The reference architecture below shows many of the general categories of components that make up APM IT solutions, and provides a good starting point for developing your reference architecture. When developing specific reference architecture, you should identify the categories that will be managed, identify all the components within each category, and add other architectural considerations given. Components should be identified by supplier and model and many businesses will have duplicate suppliers and products in some categories. Intelligence & Analytics Environments Information Access APM Role-Based Environments Workflows Information Access Mobile Devices Secure Communication Mobile Backend Applications Domain Application Environments Business Processes Application Information APM Applications Intelligence & Analytics Security Infrastructure Role-Based Environments MDM & Quality Mobility Information Management Social Media Workflow & Integration Application Development Deployment Monitoring Management Collaborative Technology Platform APM IT Reference Architecture Establishes a Consistent Context for Many APM Projects Collaborative platform components are general technologies that are not APM-specific. These technologies are likely to come from suppliers such as IBM, Microsoft, Oracle and SAP, Software AG, and TIBCO. Some application components are off-the-shelf products designed for APM and other ALM needs. Off-the-shelf application components are likely to include EAM, CMMS, maintenance, reliability, ERP, and many others from a wide variety of suppliers including some that specialize in AIM. The offthe-shelf application components for APM vary considerable in functionality and have considerable overlap. (Note that ARC is developing Solution Guides for APM, including AIM, to help with the selection process). Other APM applications may be developed internally (or outsourced) using components of the collaborative platform specified for APM IT. These should be managed in the APM IT strategy to avoid duplication and max- Copyright ARC Advisory Group ARCweb.com 13

14 imize re-use. Examples of this category of applications are automation of cross-functional business processes, integrations and general information sharing applications, and APM-specific work environments. Many of these applications are coupled with multiple off-the shelf applications and technology components, making maintenance and evolution complex. Technology Trend Information Loading Collaborative Platforms Standardization Role-based User Environments Modern Browser-based User Interfaces Master Data Management Practices User Interface Pervasive Intelligence and Analytics SOA-Based Products Function Information Management Integration Information Quality Information Sharing Terms and Concepts Collaboration Projects Workflow Analytics Description Independent storage of information to enable filling application gaps. Support both centralized and federated strategies. Parses AIM content in support of asset information structure, asset objects, categories and relationships. Supports change management and versioning. Supports loading, validating, transforming and categorizing asset information from applications and legacy formats. Supports industry standards for structuring and exchanging asset information. Includes tools for integration to common applications containing asset information, with prebuilt integrations for Engineering, Maintenance and EAM applications. Supports data quality strategies, including validation and quality checks at critical points in information flows. Aligns with corporate Data Quality and MDM programs. Provides common asset information services directly usable by workflow, visualization, analytics and other similar elements. Provides information in common formats. Role-based with tools appropriate for AIM players. Includes visualization of AIM content and collaborative workflow. Integrates with popular enterprise portal frameworks. Language of AIM should be built into solutions to be effective for AIM players: Engineering, Operations, Maintenance, etc. Provides an environment and workflows for collaborations in all ALM domains. Includes capability to create and exchange packages, markups, comments, as-built, etc. Includes specific capabilities for associating asset information with engineering projects. For example, includes as-built concepts and handling of multiple concurrent projects. Includes AIM specific workflows. Can be configured by AIM players. Provides metrics on workflows and content changes. Easily integrates with common enterprise analytics software. Collaborative Platforms Are Not Enough for APM IT, Requiring APM Applications and Platform Extensions Most businesses have standardized certain architectural items (separate from APM) and these should be included or referenced in your APM IT reference architecture. For example, your architecture team may have selected SOA or a service-based integration strategy, and this applies to APM as well. APM IT reference architectures are lasting documents, intended to be used for several projects, but they also change as product selections and other aspects change. In fact, an APM IT program may have multiple reference architectures, possibly representing short-term strategies as well as longterm vision so that projects can align based on timing. Develop an APM IT Roadmap In most cases, the current state of your APM IT is not where you want to be. Cost reductions and improved performance will only come from change. 14 Copyright ARC Advisory Group ARCweb.com

15 For example, project and IT maintenance savings may come from reducing the number of applications, consistent technology deployments, re-use, and others. APM IT programs can communicate and manage this change through a defined roadmap. An APM IT roadmap may use one reference architecture to represent the current state, another to reflect near-term changes, and another to convey the long-term vision. The APM IT roadmap identifies when various reference architectures apply, which in turn tells project teams what IT capabilities are available and what technologies should be used. Existing applications must be considered when developing an APM IT vision and planning steps to achieve that vision because the cost, impact, and timing of changes influence strategy. The APM IT roadmap should specify when existing APM IT applications must be modified, re-implemented, or retired to accommodate changes in reference architecture. Not all IT work needed to move toward an APM IT vision can be completed under APM project requests. Typically, IT must put in place a new technology foundation using its own capability planning and budgeting processes. These must also be reflected in the roadmap. Align Technology Trends with APM IT APM IT strategies and solutions must evolve as the included technologies, off-the-shelf applications, and IT practices evolve, and this should be reflected in your reference architectures. Collaborative platform components evolve to serve very general IT markets independent of application domains and industries and APM IT strategies must track their evolution, in alignment with overall corporate IT technology strategies. As with any enterprise applications, off-the-shelf APM application suppliers have their own technology strategies and will lag general evolution to some degree, limiting when general technologies can be removed or updated. Many IT trends and emerging practices support evolution of APM programs. The table below lists several you should considered when developing your APM IT roadmap. Copyright ARC Advisory Group ARCweb.com 15

16 Collaborative Environments AIM is central to APM and extensive information sharing and collaboration across a broad range of stakeholder roles is essential to deliver maximum value. Collaboration technologies have been evolving rapidly outside of business environments, offering ample fuel for innovation for many business activities. These include technologies ranging from desktop sharing and more effective browser-based user interfaces to diverse social media. Such diversity makes it critical to include well-thought-out plans in your APM IT vision. Technology Trend Collaborative Platforms Role-based User Environments Modern Browser-based User Interfaces Master Data Management Practices Pervasive Intelligence and Analytics SOA-Based Solutions Mobile Technologies Social Media Clarification Evolution of Technology Platforms. Collaborative Tools & Environments Workflow, Information, Tools, and Security Optimized for Roles AJAX, RESTful, Silverlight for higher productivity in a Browser Management of shared information Common Practices Improve information quality Embedded in more role-based environments and applications Common Technology Approach More flexible Enabled by developments in wireless communications, mobile devices Emerging methods for collaboration, innovation, sharing, research Many IT Trends Support Enhanced APM IT Programs Master Data Management APM studies point to several issues that can be categorized as data quality issues. Mitigating those issues is very costly and the impact on projects and productivity in general is large. Master Data Management (MDM) has been around for some time but is becoming the umbrella for a very broad range of data quality issues. Consequently, MDM practices and off the-shelf technology solutions are evolving. Off-the-shelf MDM solutions are being separated into MDM platforms that are domain agnostic, and domain solutions, many of which are being implemented over an MDM platform. MDM platforms often include tools 16 Copyright ARC Advisory Group ARCweb.com

17 that can be used for data mastering tasks and other activities that improve and maintain information quality. Quality Issues Explanation Outdated and Wrong Values Information is obsolete or entered incorrectly Category Cost Incomplete Definitions Ambiguous Information Missing Information No units, inconsistent units, unrecognizable abbreviations Avoidance Effort Taken to prevent or minimize impact Redundant systems, paper backups Inconsistent Formats Inconsistent Semantics Different National Languages Redundant Items File formats, multiple proprietary formats or schemas Same labels different meaning - different labels, same meaning English, French, Spanish, Chinese,, units, dates, Same or similar items defined in multiple places MDM Practices and Tools Address Common Quality Issues Mitigation Delay Reentry of Information, redesign, rework, verifying information Late projects, late startups, increased downtime, lost customers The high cost of poor quality asset information has been well documented by NIST Master Data Management Processes and Technologies Should Be Considered for APM IT Programs To our knowledge, no comprehensive off-the-shelf MDM solution for asset information has been developed over an MDM platform. However, when developing your own master data and data quality programs, MDM platforms are worth considering. Perhaps more important, end user MDM principles and practices are also evolving. APM IT strategies should align with existing corporate MDM strategies. A couple of MDM lessons learned are worth noting. First, each business s definition of what constitutes master data differs somewhat, but in any case, MDM experience shows that not all master data can be aggregated into one physical data store. A federated approach is necessary. Second, MDM has shown that each information item must have one data owner and that owner is not likely to be in IT. For example, asset managers, maintenance people, etc. are likely to be information owners and others should not be able to change information directly. Integration, Services, and SOA Asset information exists in many, somewhat isolated, locations and an essential value to an APM IT strategy is making the necessary information more broadly accessible. This involves integration processes that keep multiple locations synchronized. Similar integration capabilities are required to Copyright ARC Advisory Group ARCweb.com 17

18 move information between applications as part of workflows and crossfunctional business processes. Other than the type and diversity of the information itself, integration for APM IT is like integration for any other application domain. Asset information typically involves structured information Integration solutions vary from storing (such as XML data) but also involves documents, information in multiple formats, to transforming information on the fly, to drawings, and other unstructured information. adding special viewing tools to receiver At times, the unstructured information also needs environments. Naturally, it is best to to be transformed for use in various environments and tools. For example, drawings may select one integration and transformation strategy and include that in the reference need to be converted from diverse supplier formats to PDF architecture and roadmap. documents. Business Intelligence and Analytics It should now come as no surprise that APM is about asset performance and that some form of business intelligence (BI) and analytics are essential elements of all but the most basic APM IT reference architectures and roadmaps. Fortunately, intelligence for business and operations domains has made great strides in recent years. All collaborative platform suppliers offer environments and tools, even though their architectures and target users vary. Traditional BI and analytics offerings are targeted towards specialists, but recent supplier efforts recognize a broad user spectrum with appropriate changes in product architectures, tools, user interface, work environment support, and others. Some of these offerings are still evolving rapidly, but APM IT strategy developers should include general BI and analytics capabilities in their reference architectures and roadmaps to support development of asset-oriented analytic applications, performance indicators, dashboards, and other APM IT components. These are where APM and performance management becomes real and results are realized. 18 Copyright ARC Advisory Group ARCweb.com

19 Recommendations A high quality APM IT strategy is essential for driving optimum asset performance, with minimum waste, minimum cost and maximum quality. This demands a deliberate APM IT strategy. IT managers should take the initiative to create an APM IT strategy, even when there is no visible or comprehensive APM strategy. Development of an APM IT strategy must include the asset managers and practitioners. IT managers may need to be the APM IT champion and solicit support in establishing some form of cross-functional team, council, or other organizational structure. Many businesses have preferred methods for analyzing and defining vision within business domain. We suggest developing one or more reference architectures that can describe the vision in conjunction with a roadmap for moving from the as-is state to intermediate states and ultimately to the APM IT vision. The APM IT vision must be aligned with corporate standards, adding in asset-specific applications, products, and technologies to form solutions that address unique domain requirements. Copyright ARC Advisory Group ARCweb.com 19

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21 Analysts: Robert Mick, Sid Snitkin Editor: Paul Miller Distribution: ALM Clients Acronym Reference: For a complete list of industry acronyms, refer to our web page at AIM Asset Information Management ALIM Asset Lifecycle Information Management ALM Asset Lifecycle Management APM Asset Performance Management BI Business Intelligence CMM Collaborative Management Model CMMS Computer Maintenance Management System EAM Enterprise Asset Management ERP Enterprise Resource Planning HR Human Resources IT Information Technology MDM Master Data Management MRO Maintenance, Repair, and Operations OEE Overall Equipment Effectiveness OpX Operational Excellence PIM Project Information Management PLM Product Lifecycle Management PM Prevention Maintenance PPM Project Performance Management ROA Return on Assets SOA Service Oriented Architecture XML Extensible Markup Language Founded in 1986, ARC Advisory Group is the leading research and advisory firm for industry. Our coverage of technology from business systems to product and asset lifecycle management, supply chain management, operations management, and automation systems makes us the go-to firm for business and IT executives around the world. For the complex business issues facing organizations today, our analysts have the industry knowledge and first-hand experience to help our clients find the best answers. ARC Strategies is published monthly by ARC. All information in this report is proprietary to and copyrighted by ARC. No part of it may be reproduced without prior permission from ARC. You can take advantage of ARC's extensive ongoing research plus experience of our staff members through our Advisory Services. ARC s Advisory Services are specifically designed for executives responsible for developing strategies and directions for their organizations. For membership information, please call, fax, or write to: ARC Advisory Group, Three Allied Drive, Dedham, MA USA Tel: , Fax: , [email protected] Visit our web pages at Copyright ARC Advisory Group ARCweb.com 21

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