July 19, 2002—The worldwide market for Enterprise Asset Management (EAM) and Computerized Maintenance Management Systems (CMMS) was $1.2 billion in 2001 according to a new ARC Advisory Group study. ARCs research indicates the industry will grow at the compounded annual rate of 5.3% over the next five years and reach $1.8 billion in 2006.
According to ARC Director of Consulting and author of the study, Houghton LeRoy, “The majority of the EAM market growth will come from Application Service Provider (ASP) web-hosted solutions and electronic Maintenance, Repair, and Operations (eMRO) procurement. The EAM market has matured causing software license sales to decline and customers to request more services for better performance and continuous improvement.”
Customer service expectations in asset-intensive industries has increased, requiring more consulting and continuous improvement services from suppliers. Companies that have seen good benefits are expanding EAM functionality to other groups and facilities. Companies with little or no payback justifications are looking for help establishing key performance indicators to measure ROI.
Several EAM suppliers are realizing the strong growth potential for outsourced services such as ASP web hosting and eMRO procurement. Web hosting permits faster implementation, simplifies support, integrates distributed operations and reduces cost of ownership.
eMRO procurement is another beneficial service with strong growth expectations for enterprise suppliers. Companies can reduce purchasing costs and acquire needed equipment and materials much quicker using eMRO.
In the search for stronger revenue growth, many suppliers have adopted a Total Enterprise Asset Management (TEAM) model that addresses asset management for all hardware and software assets from shop floor to top floor. This approach requires collaboration between operations, maintenance, financial, and IT groups within a company. It promotes sharing of best practices and important asset information for optimizing performance, availability, and quality.
Two of the suppliers profiled in the study include Indus and MRO, both featured sponsors on FMLink.
ARC Advisory Group provides strategic planning and technology assessment services to manufacturing companies, utilities, and global logistics providers. For more information, contact ARC Advisory Group at 781/471-1000.
