Asset Life Cycle Management – CMMS vs EAM

In a world that seemingly becomes more virtual every day, it can be easy to forget that the physical assets and infrastructure that keep industries running still require diligent care and maintenance. Managing and maintaining these assets — which include manufacturing equipment, facilities, HVAC systems, and vehicles — is part of a practice called asset life cycle management (ALM). The more proactive companies are about managing their assets, the better they can maximize their investments. Indeed, a recent McKinsey survey found that 99% of respondents said they had undergone an asset maintenance transformation in the past five years.

For many companies, those efforts likely involve using one of two types of software: a computerized maintenance management system (CMMS) or enterprise asset management (EAM) software. While their functions overlap slightly, the systems are notably different in scope and features. This blog explores the capabilities of each, how they differ, and ways companies can determine which solution is most appropriate for their needs.

What Are Computerized Maintenance Management Systems (CMMS)?

Commonly used in the manufacturing, facilities management, healthcare, and transportation industries, CMMS tools primarily focus on maintenance tasks as a comprehensive digital toolbox. Where companies store and manage their work orders, preventive maintenance schedules, and equipment history. Maintenance managers use CMMS to manage and streamline workloads, extend the life of company equipment, reduce downtime, and promote greater operational efficiency. CMMS tools also improve communication among maintenance teams by keeping everyone apprised of what work is being done and when. They also often result in greater compliance with safety and regulatory standards and better control over maintenance costs.

CMMS comprises several key components. One is the work order system, where equipment maintenance requests are created, assigned, and tracked until completion. In addition, preventive maintenance capabilities allow teams to schedule regular equipment maintenance to avoid unexpected breakdowns. Preventive maintenance is central to getting the most ROI from investments, although many companies struggle to take advantage of it. Per the McKinsey survey, preventive maintenance tasks make up only 51% of overall maintenance activity.

Another key component of CMMS is asset management, which enables companies to keep detailed records of equipment, parts, and tools used in maintenance tasks. Inventory management, reporting, and analytics are other important aspects of CMMS that provide insights into maintenance performance and help guide future maintenance decisions.

The use of CMMS tools dates back to the 1960s, when early systems were developed to manage maintenance in industrial settings. Today’s user-friendly, mobile-compatible, and feature-rich CMMS solutions often integrate with other business systems, like enterprise resource planning (ERP) software, to create a more holistic view of companywide operations.

What Is Enterprise Asset Management (EAM)?

EAM systems handle maintenance tasks similarly to CMMS tools but go further, with capabilities for asset tracking to allow companies to monitor an asset’s location, condition, and usage in real time. An EAM system is broader in scope than CMMS, encompassing everything from asset purchase through disposal. EAM systems also include financial management features that help companies track asset-related costs and depreciation.

Since their debut in the 1990s, EAM systems have evolved from basic asset-tracking systems into sophisticated platforms that leverage cloud technology, the Internet of Things (IoT), and artificial intelligence for predictive analytics. The maintenance features of EAM systems help companies gain better control over asset performance, which leads to reduced downtime and increased asset reliability. These features also help companies comply with regulatory requirements by providing detailed records and audit trails. In addition, by integrating asset management with financial planning, EAM systems help companies make informed decisions about asset utilization, budgeting, and capital expenditures.

CMMS capabilities are often found within EAM systems, which also typically include asset life cycle management and financial planning features.

Key Takeaways

• CMMS tools primarily focus on asset maintenance operations and activities, such as managing work orders, scheduling preventive maintenance, and storing maintenance histories.
• EAM systems take a broader approach to managing the entire asset life cycle, including purchase, maintenance, and disposal.
• CMMS tools support asset efficiency, reduce costs, and aid in regulatory compliance by storing accurate asset histories.
• EAM systems also reduce costs and ensure compliance while also helping companies make informed decisions about asset replacement, budgeting, and capital expenditures.
• Typically, CMMS tools best suit the needs of smaller companies with more limited asset portfolios, while EAM systems are better suited for larger organizations.

CMMS vs. EAM: Key Differences

The key to understanding the differences between CMMS and EAM systems is to recognize that CMMS is a subset of EAM. CMMS capabilities are more narrowly focused on the scheduling, tracking, and reporting of equipment maintenance activities, including those for field service, with tools for work order management, preventive maintenance, and inventory control for spare parts, for example. EAM, on the other hand, integrates these maintenance functions with asset tracking, financial management, compliance, and strategic planning to present a more comprehensive solution for managing an entire asset portfolio.

With their limited maintenance focus, CMMS tools are more often used by smaller organizations, whereas EAM systems are more common in larger organizations with extensive asset bases and complex operational requirements. Businesses that start with CMMS often progress to EAM as their asset management needs expand enough to require a more integrated approach that connects financial, compliance, and operational needs.

Ultimately, the choice between CMMS and EAM depends on a company’s specific needs. If efficient maintenance management is the primary goal, CMMS is a solid choice. If the objective is to have a comprehensive asset management strategy that includes financial and life cycle planning, EAM would be more appropriate.

Side by Side: CMMS vs. EAM

The narrower, maintenance-focused capabilities of CMMS are often best suited for smaller organizations, while EAM systems typically appeal to companies with large asset portfolios.

CMMS vs. EAM: Key Functionalities

According to IDC, the global market for asset life cycle management applications is worth $3.9 billion. CMMS and EAM systems share the common goal of managing and maintaining assets, but how they go about it differs in scope and depth of features.

What Does CMMS Do?

The following key capabilities highlight why CMMS tools are such an important weapon to help companies streamline and optimize maintenance operations and consistently maintain a high level of asset performance.

• Work order management: Work order management is a core function of CMMS tools that maintenance teams use to create tasks, assign resources, and track work orders. It fosters better communication among teams, both the in-house and field service teams, which, in turn, improves field service metrics, such as projects completed on time and budget.
• Preventive maintenance scheduling: By setting up routine maintenance intervals, companies can reduce unforeseen equipment failures and ultimately extend the lifespan of their assets. Preventive maintenance can also minimize costly repairs.
• Asset tracking: The Asset-tracking capabilities in CMMS provide a comprehensive view of all physical assets, including their location, condition, and history. This allows businesses to manage their equipment, monitor asset performance, and make better decisions about repairs and replacements. It also helps companies comply with safety regulations by keeping detailed records of maintenance tasks.
• Inventory management: Companies can use the inventory management capabilities of CMMS to track spare parts and maintenance supplies. Allowing maintenance teams to have the necessary resources to maintain timelines and workflows. In addition, features like automatic reordering help control costs by avoiding excess stock.

What Does EAM Do?

The comprehensive nature of EAM systems extends well beyond traditional maintenance activities. The following capabilities make EAM systems indispensable for businesses looking to optimize asset performance, manage costs, and comply with industry standards.

• Asset life cycle management: The core focus of an EAM system is to provide a complete picture of asset usage and performance — from the moment of purchase until disposal. This helps companies maximize the use of each asset, properly plan replacements, and track depreciation. Managing the full asset life cycle helps companies reduce costs and extend the lives of their assets.
• Integrated financial management: By integrating the asset management capabilities described above with financial processes, EAM systems help companies track costs, budgets, and financial performance to build a complete picture of the full cost of asset ownership. Not only does this help with compliance, but it also leads to smarter decisions about future capital expenditures.
• Predictive maintenance and analytics: Today’s comprehensive EAM systems have powerful predictive maintenance features that leverage advanced analytics and IoT integration to predict when equipment might fail and to recommend preventive actions. The result is less downtime, lower maintenance costs, and higher operational efficiency.
• Compliance and regulatory support: EAM systems provide robust compliance features, allowing businesses to maintain asset-related records and meet industry-specific regulations. This is especially important in heavily regulated industries, such as healthcare, manufacturing, and energy.

CMMS vs. EAM: Benefits

The benefits of CMMS and EAM systems extend beyond maintenance management; they also drive efficiency, reduce costs, and improve asset reliability. This section outlines specific benefits that companies can expect from each system.

CMMS Benefits

CMMS is a valuable tool for businesses that want to improve maintenance efficiency, reduce costs, and keep their assets running smoothly. With CMMS, maintenance teams can work more effectively and focus on strategic activities that drive business success. Benefits include:

• Improved maintenance efficiency: CMMS tools manage and track maintenance tasks by automating work-order creation, assignment and tracking. This decreases reliance on manual processes, which minimizes the risk of errors. With streamlined maintenance operations, companies can also reduce downtime, boost the productivity of maintenance teams and extend the life of their assets.
• Cost reduction: By optimizing maintenance activities and reducing unplanned repairs, CMMS tools contribute to lower operational costs. They help companies avoid costly breakdowns by using proactive maintenance and data-driven insights to avoid wasting resources. The inventory management features in CMMS also help businesses track spare parts and maintenance supplies so teams can quickly access the parts they need and avoid costly overstocking or stockouts.
• Improved compliance: CMMS tools offer detailed recordkeeping and audit trails of maintenance work, inspections, and asset history to verify that companies meet safety regulations and industry standards. This is particularly helpful in industries where compliance is a top priority.
• Comprehensive asset tracking: The detailed asset tracking in CMMS helps companies monitor the condition, location, and history of their equipment, which leads to well-informed decisions about repairs, replacements, and asset usage. Comprehensive asset tracking also aids in compliance with safety regulations by providing an accurate record of all maintenance activities.

EAM Benefits

The following list of benefits illustrates why EAM systems are invaluable for businesses seeking to improve operational efficiency, reduce costs, and maintain compliance.

• Cost reduction: EAM systems can significantly reduce costs by streamlining and improving asset maintenance and extending an asset’s useful life. Predictive maintenance and smart asset management, which is made possible by advanced technologies such as IoT devices, data analytics, machine learning, and cloud-based platforms, minimize the potential for expensive breakdowns and unplanned downtime. With lower repair costs and improved asset usage, companies will find themselves in a healthier financial position.
• Enhanced productivity: EAM systems refine maintenance operations and reduce downtime by creating more efficient scheduling and work-order management. As a result, assets are online and available more often, which increases overall productivity. In addition, detailed asset tracking helps teams prioritize tasks to encourage more efficient resource allocation.
• Improved compliance: EAM systems feature detailed recordkeeping and audit trails, an important part of complying with industry regulations and safety standards. As a result, companies can avoid costly penalties for noncompliance.
• Strategic asset planning: EAM systems allow businesses to take a strategic approach to asset management by providing valuable insights into asset performance and life cycles. This enables managers to make informed decisions about asset replacement, budgeting, and capital expenditures.

CMMS vs. EAM: Use Cases

Exploring the unique ways CMMS and EAM systems can be used illustrates how each is customized to meet specific operational needs, ranging from routine maintenance to comprehensive asset life cycle management. The following examples underscore the flexibility and importance of each system in maintaining a well-organized, efficient, and compliant asset management process.

• CMMS Use Cases

Companies use CMMS tools in various ways across multiple industries. For example, in the healthcare industry, they’re critical for maintaining medical equipment and keeping hospital facilities operating smoothly. When a piece of medical equipment, like an MRI machine, needs servicing, CMMS generates a work order and assigns it to the appropriate technician to ensure a quick response to minimize downtime. The system tracks the maintenance history of the equipment to develop insights into usage patterns, which ultimately drives preventive maintenance scheduling to avoid unexpected breakdowns.

Another example lies in the hospitality industry, where CMMS tools help bolster hotel facilities and guest rooms. When a maintenance request is lodged for room repairs or public areas, the CMMS system creates a work order and assigns it to the appropriate maintenance staff. The system also schedules preventive maintenance for HVAC systems, elevators, swimming pools, and more.

• EAM Use Cases

EAM systems offer a comprehensive approach to managing assets that allows companies to optimize operations and solve specific problems. In manufacturing, for example, technicians use an EAM system to track asset performance and manage spare parts inventory so the right components are always available for repairs. It also helps maintenance teams respond quickly to breakdowns by prioritizing work orders. In addition, EAM systems analyze historical data to predict when equipment might need major overhauls, which allows companies to plan proactively, limit downtime, and avoid costly disruptions. Finally, EAM systems guide the safe, efficient, and environmentally friendly decommissioning, disposal, or recycling of assets at the end of their life cycles.

Similar benefits can be found in the transportation sector, where EAM systems monitor vehicle fleets and support efficiency. In addition to creating work orders and assigning them to technicians, EAM systems track vehicle mileage and usage to predict preventive maintenance that can reduce the risk of breakdowns. As in manufacturing, EAM systems also track spare parts inventory and use historical data to predict when vehicles might need significant repairs or replacement. Beyond maintenance departments, finance teams can also use EAM systems to monitor asset depreciation and manage budgets, while operations departments can use them to ensure regulatory compliance and optimize vehicle route planning to improve overall logistical efficiency.

CMMS or EAM: Which Matches Your Requirements?

Ultimately, the choice between CMMS and EAM depends on a company’s size, industry, and specific operational requirements. CMMS is ideal for companies focused on maintenance management with challenges like work-order scheduling, preventive maintenance, and spare parts inventory control. It’s also better suited for companies with limited assets or those requiring a straightforward approach to managing maintenance tasks. Manufacturing, healthcare, and hospitality industries often benefit from using CMMS tools to manage equipment and facility upkeep.

On the other hand, an EAM system is ideal for companies with large and complex asset portfolios that often require asset tracking, financial management, and compliance monitoring. If companies need a comprehensive approach to asset management that combines maintenance with financial planning and regulatory compliance, an EAM system would be the way to go. Companies in the energy, transportation, and large-scale manufacturing industries often find EAM systems fulfill their needs.

Features Checklist

CMMS and EAM systems share similar maintenance management features, but EAM systems also have capabilities for procurement, advanced analytics, strategic planning, and full life cycle management, including asset acquisition and disposal.

CMMS vs. EAM FAQs

Can CMMS handle the entire asset life cycle as EAM does?

No, a computerized maintenance management system (CMMS) focuses primarily on maintenance tasks, such as work-order management, preventive maintenance scheduling, and inventory tracking for spare parts. It doesn’t typically include broader functions, like asset acquisition, financial integration, or long-term strategic planning, all of which are key features of an enterprise asset management (EAM) system.

How do CMMS and EAM systems integrate with ERP software?

Computerized maintenance management systems (CMMSs) and enterprise asset management (EAM) systems integrate with enterprise resource planning (ERP) software so that maintenance data, such as work orders, asset history, and inventory levels, can be shared with ERP modules that assist finance, procurement, and human resources departments. This gives companies a holistic view of operations, improves cross-departmental collaboration, and secures accurate financial records. It also helps companies simplify reporting and compliance because the maintenance data is part of a unified business system.

Are CMMS solutions more cost-effective than EAM solutions?

Because they focus on a narrower scope of maintenance-related tasks, including work orders, preventive maintenance, and inventory management, computerized maintenance management system (CMMS) tools are typically less complex and less expensive to implement and maintain. With their broader range of asset management functions, including financial integration and strategic planning, enterprise asset management (EAM) systems can be more costly due to their expanded capabilities. Companies with simpler maintenance needs often find CMMS to be the more cost-effective choice.

What is the difference between APM and CMMS?

Asset performance management (APM) and computerized maintenance management systems (CMMS) both manage assets but serve different purposes. CMMS primarily focuses on maintenance management, handling work orders, preventive maintenance scheduling, and spare parts inventory. APM, on the other hand, takes a broader approach, optimizing and monitoring asset performance to improve reliability and reduce risks. While CMMS ensures that assets are maintained efficiently, APM uses data analytics and predictive technologies to enhance asset performance and lifespan.

What are the two types of CMMS?

A computerized maintenance management system (CMMS) often comes in two flavors: on-premises and cloud-based. An on-premise CMMS is installed locally on a company’s servers and requires in-house IT support for maintenance and updates. It offers substantial control and security, which may be preferred by businesses with strict data policies. A cloud-based CMMS, by contrast, is hosted on remote servers and accessed via the internet, offering scalability, easier updates, and remote accessibility for users.

What does EAM mean in maintenance?

In maintenance, enterprise asset management (EAM) refers to a comprehensive system for managing a company’s physical assets throughout the full life cycle, including acquisition, operation, maintenance, and disposal. EAM involves maintenance tasks like work-order management, preventive maintenance, and asset tracking while also integrating financial planning and compliance. EAM optimizes asset performance, extends equipment life, and ensures regulatory compliance.

Do you want to learn more about how NetSuite can manage your physical assets and life cycle management? Contact us to learn more!