Asset investment planning is a methodology for multicategory, long-term investment decision-making leveraging operational and financial asset information. AIP software can be a valuable tool for quantifying risk across all capital equipment and facilities; bringing finance, operations and engineering stakeholders to the same page; and bridging the workflow between project ideas and project delivery. There are a few perceptions that need to be anticipated and overcome to accelerate AIP acceptance within an organization. These perceptions can be aggregated into four categories.
Limited Understanding of AIP
- AIP is a relatively young methodology in the asset management landscape. It represented only 3.8% of industrial asset management software revenue in 2021 but is expected to be worth $486 million globally by 2026, a compound annual growth rate of 12.9%, according to the independent research firm Verdantix.
- Manufacturing companies who have already invested in operational excellence tools — such as EAM, APM and CMMS — are navigating whether AIP complements or replaces existing asset management technology and work processes.
What to consider: Investments in EAM, APM and CMMS technology are traditionally operational and tactical in nature, focused on asset performance, maintenance and life cycle tracking. While asset information from these systems is valuable, capital planning is not performed in these environments.
Database tools like Microsoft Excel or SharePoint have traditionally been used to consolidate information and capital needs. However, they lack the integrations and functionality to handle enterprisewide asset and facility risk assessments, multicategory project evaluation, and the spend approval and timing decision workflows that AIP software was designed for. They are also prone to depending on subjective or inconsistent inputs.
In some cases, asset management technology or in-house programs place emphasis on assessing the risk of “critical equipment,” not necessarily all company-owned assets and infrastructure. This data gap leads to blind spots in decision making.
If AIP and its differentiation in the asset management landscape is unfamiliar, read about why it fills a critical capability gap for manufacturers.
Fatigue
- AIP is a new methodology being applied to something that is not a new problem. Companies have tried to implement more robust asset risk assessments, master infrastructure planning programs and the like. These programs, which might materialize as “more robust spreadsheets,” have been moderately successful but strained in recent years amid constrained budgets, supply chain disruptors, staffing concerns and competitive pressure.
- Asset risk assessments and facility recommendation reports are often outsourced to contractors or original equipment manufacturers (OEMs). It’s common for an organization to have a roofing assessment program, for example, but lack the same standard across other asset categories.
- For these reasons, manufacturers have seen many iterations of different programs, dealt with variability, and might not be immediately open to the idea of “another program.”
What to consider: AIP software investments require a mindset change away from complacency. All stakeholders who could be influenced by this should be involved early in discovery and contribute to the plan, including finance, operations, engineering, IT, and environmental health & safety.
Evaluate previous risk and capital planning programs that have had strong outcomes. Why were they successful? Approach AIP with the same expectations and success criteria.
Instead of thinking of investments in AIP solutions as starting over, reframe to recognize that AIP builds upon existing programs. If there are subject matter experts on staff for a set of equipment (e.g., boilers), lean on them to contribute to the scoring methodology that AIP assessment functions utilize. Then rely on predetermined industry templates for remaining assets where staffing knowledge gaps exist.
Labor Burden
- Manufacturers feel the burden of having “too much on the plate” and being pulled in different directions. Something new like deploying AIP software might seem like a complex and daunting task.
- Organizational restructuring and mergers and acquisitions (M&A) feel constant, providing distractions from exploring an AIP solution.
What to consider: AIP technology ties in directly to what many manufacturers are already working on, from automation and digital (Industry 4.0) initiatives to advancing their environmental, social and governance (ESG) agendas, supporting efforts around cost savings and profitability maximization.
AIP technology also can be implemented quickly, providing value in months, not years.
Assign accountability to a single individual — or small group — who can champion AIP investigation, bring in the right resources and stakeholders at the right times in discovery.
Working with a solution partner with a ready-made AIP solution instead of chartering employees to try building these types of programs themselves will allow the team to focus on executing value, not finding it.
Restructuring and M&A might be more common for some manufacturers than others. Instead of waiting until the dust settles, consider ways to implement AIP quickly and efficiently in smaller phases among the stable parts of the organization. When an AIP platform is stood up, it provides a consistent framework to organize future facility and asset acquisitions.
AIP can be deployed first across a subset of site operations, rather than attempting all sites at once. See that the sites selected include a representative mix of assets, with an ability to draw comparative insights. Starting small and intentionally with site selection will help achieve early success, refine configurations and user experience, and make scaling a sustainable program feel more attainable.
Feeling of Unreadiness
- A lack of (or disorganized) information might suggest one is not ready for AIP solution implementation.
- It is also common to find varying degrees of maintenance history and financial attributes between categories (e.g., maturity in automation assets and main production equipment, but less so in utility and structural, or vice versa).
What to consider: Remember that readiness is a journey, not a specific date. AIP platforms deliver value with a mixture of subjective and objective information meant to scale in maturity over time.
While the amount of data and value of an AIP implementation is greater in combination with other investments in industrial asset management (CMMS, EAM, etc.), taking the first step to better organize, centralize and standardize a structure will enhance the capital planning process, take advantage of what is available, and yield more insights than were previously possible.
If another asset management technology implementation (CMMS, APM, etc.) is already underway, consider minimizing rework. AIP can be implemented efficiently when the books are open. Seek external partnerships to support parallel implementation and achieve a substantially higher value down the road.
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