In the previous blog in our Battling the Mandate Series: Successful Solutions for ERP / EAM Interaction, we discussed common integration methods as well as described the difference between the Native ERP Model and the Hub and Spoke Model. In this blog, we’ll wrap up the series by discussing how to pitch integration to management. The key to stopping the mandate is to build and present a strong business case that highlights the cost differences and ROI factors between using a best-in-class EAM / CMMS and an ERP module.
Management’s Business Drivers (Roots of “The Mandate”)
When an ERP module is mandated from the top, management already believes that the ERP module will provide adequate functionality for end users and meet their 4 bottom-line goals for production:
- On-time production
- Visibility into costs
- Improved profitability
- Improved quality with balanced investment
It is challenging to pitch an alternative solution to management. By breaking down the core business drivers and the benefits of using a best-in-class EAM (Blue Mountain RAM), it is clearly visible that an EAM / CMMS integration with an ERP is a more appealing alternative to an ERP module.
ROI Factors in Maintenance and Calibration
The 4 bottom line goals mentioned above revolve around production. Maintenance and calibration programs play a major role in production output – on-time production, equipment uptime and quality & regulatory programs.
To provide a further breakdown, maintenance and calibration departments are driven by:
- Equipment uptime improvements
- Control of service costs and IT costs
- Technician productivity & efficiency
- Extended asset lifecycles
- Equipment safety improvements
- Improvements in product quality
ROI Factors of an EAM/CMMS versus an ERP Module
While ROI factors are unique to each organization, typically our customer’s find value in the following areas. And, comparing these factors to an ERP module can reveal significant ROI differences for management’s 4 bottom line production goals:
- Technician productivity and efficiency (labor tracking)
- Vendor management, analysis and cost control
- Storeroom / Spare Parts Management
- Efficiency of Work Scheduling
- Availability of work information in the field – i.e. work schedules, measurement data templates, work plan templates
A big area of return is an application’s lifecycle cost which includes the initial implementation cost. Typically, implementing an ERP module in a GMP environment has significant cost initially and to maintain over its lifespan because of the custom development of features mentioned in previous blogs.
An EAM/CMMS (such as Blue Mountain RAM) offers a tailored user experience that allows for efficiency in managing maintenance & calibration, scheduling work events and maintaining historical records in a way that an ERP module cannot.
Here are some key ROI factors that only an EAM/CMMS (Blue Mountain RAM) can provide compared to an ERP module:
- Improved equipment uptime from scheduling efficiencies.
- Cost control – being able to monitor and report on costs in a purpose-built EAM application allows you to develop ways to drive product quality with reasonable investment and eliminate unnecessary spending
- Improved management of maintenance and calibration – speed of work order completion, improved scheduling, consistency in work SOPs (Work Plan Templates), simplified Measurement Data Templates
- Visibility to review and analyze equipment – which leads to an extended asset life cycle
All of these areas above directly work to ensure that management’s 4 bottom line production drivers are met.
Read more of our Battling the Mandate blog series: