How to Communicate the Six Benefits of Asset Management to Your C-Suite

How to Communicate the Six Benefits of Asset Management to Your C-Suite featured image

Facebook’s recent outage proved one thing: mismanaging assets can be costly to your business. This article covers six benefits of a robust enterprise asset management (EAM) program and how to best communicate the need for EAM to the C-Suite in your company.

$100 Million Dollars.

According to an article by ToughNickel, if you had $100M you could buy a Van Gogh painting, an Airbus jetliner, or never work again (so long as you can keep your yearly costs below a measly $2M.)

Or, in the case of Facebook, $100M is how much you can lose with a few strokes on a keyboard.

Fortune magazine estimates social media giant Facebook lost that amount during its recent 7.5 hour downtime.

The apparent cause of the outage, in simplest terms, was a configuration change mistakenly issued during maintenance.

Which makes this either a really good or really bad time to talk about Enterprise Asset Management (EAM).

Depending on who you work for.

Assuming its not Facebook, let’s look at the benefits of effective EAM and how to communicate that value to your C-Suite.

Six Benefits of Effective Enterprise Asset Management

Organizations need to design, buy, and build the right assets. Once in-house, those assets need to be operated and maintained correctly. By doing so, those organizations will enjoy the following six benefits:

1: A safer and healthier workspace through proaction rather than reaction

Equipment that breaks down or misbehaves can cause harm and risk to the workforce and the community. Rushing to fix the problem often leads to unplanned activity in a stressed environment with shortcuts and work-arounds – all ingredients for issues which are downright dangerous. Unreliable assets are safety problems waiting to happen.

2: Increased productivity by making assets reliable and available

A decision to purchase a given piece of equipment can often be summarized by asking the question – pay now or pay later?

How reliable is that pump? How maintainable is it? How accessible is it? Do you spend the money now and get the good pump? Or do you spend the money later dealing with another cheap, broken pump, plus manage all the negative impacts the downtime has on your business?

3: Improved financial performance through reduced operating and capital costs

50 to 60% of the cost the total cost of an asset is dictated by decisions made before the asset is operated. Shortcuts are often taken in capital expenditures. If a company is building a production plant, for example, designs can be approved without considering what might happen during a major repair. An additional $10,000 access door might save $1M dollars in reduced downtime.

A proper maintenance program is key. Preventing an asset from failing is cheaper than having it let you down and then fixing it and recovering your lost production.

If you own a car you probably take it in for regular service when nothing is wrong with it. Why? So it doesn’t let you down when you need it.

4: Reducing risk through greater compliance with regulations and company policies

We’re in a much more transparent world these days. All over the world regulation is being tightened by Governments and Communities. Issues involving regulations, the environment, or customer satisfaction go public in the time it takes to tweet.

5: Making our world better by reducing our impact on the environment

Look – compliance issues aside, it’s just time for us to be better stewards of the world we live in. Each asset we manage has an environmental impact and any good EAM regime should seek to minimize that impact. When your asset hits the end of its lifecycle, what happens to it? Can it be refurbished, recycled or re-used?

6: Delighting customers through a better experience and increased satisfaction

Business often talk about customer experience these days – and with good intent. A positive experience with products and services leads to increased satisfaction and a delighted customer. Below that visible tip of the iceberg is a company making good decisions about how to manage their assets.

There’s nothing worse than unexpected issues – train breakdowns, power outages, or suddenly-slow broadband. These events will undermine your brand and your customers’ confidence and faith in your company.

Communicating to the C-Suite

Given these benefits of a solid Enterprise Asset Management program, how do you approach a C-Suite that isn’t quite there yet?

Drive the data

Track important data points like downtimes, repair costs, and lost opportunity costs. Record them. And present them in an easy to understand format that shows how they affect the corporate bottom line.

Demonstrate the difference

With the reality of the data in one hand, now offer up the benefits of a proposed upgrade or retrofit.

Devalue the downers

Keep opinions, gut feelings, out of the conversation. Let the data lead.

Work with a trusted partner

Many of our consultants come from the mining, manufacturing, utilities, and transport industries. We speak your language and have empathy for your situation out in your real world, whether it be an oil rig or an underground mineshaft.

Take the first step

Take the first step on your business transformation journey by learning more about RISE with SAP and Rizing. Or just contact us now.