Globalization brought international businesses together and changed the way companies operated with one another. In terms of individual business processes, however, things are changing at a different rate.
Innovations such as cloud solutions and integrated networks are helping to shrink the knowledge gap between companies operating in vertical markets—especially for those that use fixed, capital assets in their production processes. But before we dive into the changes that technologies such as the internet of things (IoT) and solutions such as SAP Business Network for Asset Management (formerly known as SAP Asset Intelligence Network) are bringing about, we should take a brief look at the history of asset management.
Just as companies historically bought licenses to physical copies of ERP software and other business-related applications, so too did they buy the physical equipment they used to manufacture products. For example, car manufacturers acquired assembly line robots to perform a specific task, and beverage companies bought bottling and cannery machines to produce their drinks.
There were pros and cons to this asset ownership. On one hand, there were certain tax advantages, via depreciation, to owning equipment, and with it the company could increase their production output. On the other, maintenance of these assets became the sole responsibility of the business, and buying the equipment meant a large capital expenditure. All of the maintenance tasks for these assets fell under the term enterprise asset management (EAM).
However, in some cases owning a piece of equipment or building was not desirable or even economically feasible. Instead, renting equipment or outsourcing jobs to those with a competitive advantage became the popular business move. Think of a clothing store outsourcing screen printing of custom designs or bakers leasing a commercial kitchen to create their desserts. You, too, may have done this in your personal life—have you leased a vehicle from a dealership?
The Cloud Appears
Rentals could be lucrative for those who needed them, but with them came some hiccups. For one, maintenance became an issue as those who were leasing machines might not have the technical know-how to fix them when they broke. Waiting on a trained representative to respond took up time and money as production ground to a halt.
On the other side of the equation were the companies that made and leased the machines. From a capital standpoint, it would make more sense to sell equipment at its full price upfront—the time value of money dictates that a dollar today is worth far more than a dollar in the future as it can be reinvested. Rentals were a consideration for those who couldn’t afford the equipment at all, which made renting a small opportunity. But proliferating rentals wasn’t considered much of a big opportunity—yet.
At the turn of the century, however, something shifted in the business software world. Companies began to pivot away from selling physical copies of their products to providing an internet-based version in the “cloud.” The highlighted benefits to customers included automatic software updates from the publisher and lower cost of ownership by paying smaller amounts for the product on a monthly basis, rather than one up-front cost. The best part was that when they no longer needed to use the software, they could cancel their contract and no longer pay.
This became known as software-as-a-service, and soon more products (nearly all digital) were packaged and released in this way: cloud-as-a-service, platform-as-a-service, even banking-as-a-service. This caught the eye of equipment providers, and their traditional business model became upended—equipment-as-a-service was born.
SAP Business Network for Asset Management
With this new business model taking off, a couple of things needed to be ironed out. For one, how do equipment updates (both software and hardware related) get delivered to clients? What happens if a recall occurs or if a client figures out a better way to use a machine that could be shared with others? The rise of IoT helped answer these questions—with IoT, all the machines owned by a company and leased to clients could talk with one another. And software updates could be pushed to clients the same way that all cloud computing updates were.
But what happens when a company leases equipment from multiple sources? What happens if they use this equipment to, in turn, create their own equipment to sell as a service? The bigger the company gets, the more convoluted this information jumble becomes. For that, an easy-to-use repository of asset information would be needed.
SAP created SAP Business Network for Asset Management to serve as that repository. Built on top of SAP Business Technology Platform, it allows relevant stakeholders—asset owners, operators, manufacturers, etc.—access to a single source of truth regarding business definitions, equipment details, etc. They would also be able to collaborate with each other, as could the equipment and other machines that interconnect via IoT.
For those tasked with performing EAM under the new as-a-service paradigm, this can be a lifesaver. Rather than having to be trained on the ins and outs of each machine, plant maintenance technicians can receive assistance from the lessor in the form of detailed machine schematics, and because the machines are connected via IoT, both lessee and lessor can take advantage of predictive maintenance by monitoring sensor data. With all relevant information available to those who need it, issues occurring downstream (such as those who use one company’s parts to create their own leased equipment) are easily remedied. Gone are the days of waiting on a technician to show up and fix things.
SAP Business Network for Asset Management is built around four key pillars: content, network, applications, and integration. The content pillar catalogs all the assets included in your equipment “world;” the network pillar connects all stakeholders in your world, such as manufacturers and users; the applications pillar consists of the software that stakeholders utilize to analyze and make use of data; and the integration pillar provides the means to integrate with other SAP products such as SAP Predictive Maintenance and Service. The solution also natively extends to SAP S/4HANA to fully integrate all business data.
These four pillars allow users of the solution to do the following (summarized from the official SAP Business Network for Asset Management brochure):
- Collaborate on equipment management
- Collect asset performance
- Streamline maintenance with up-to-date instructions and service bulletins
- Share best practices with fellow clients
- Install a digital twin in an EAM system
- Standardize management through master data
- Provide potential new business models
When I was doing the research for this post, this feature caught my eye the most: visual representation of equipment, which provides a way for users to view and explore via multiple ways—photo, document, or 3D model. You can even “hotspot” specific areas of a view so that it brings up additional information. With the rise of augmented reality and other technologies, we’re not that far off from a Tony Stark-esque display of things!
SAP Business Network for Asset Management in the COVID-19 World
As the world continues to change and become smaller, tools like SAP Business Network for Asset Management are important in keeping it running smoothly. In today’s economy in particular, the COVID-19 global pandemic is drastically changing how people interact and conduct business. I posit that tools like SAP Business Network for Asset Management will play a large role as personnel conduct their business in more isolated ways.
For example, government health guidelines have limited the number of employees allowed in a place of business. Plants that once required numerous employees running around to provide maintenance and other operations will need to make do with fewer such workers—the ability for them to monitor all machinery from a single location will lower their risk as they no longer need to make multiple rounds. Digital twins provide them with a clear snapshot of the status of physical equipment, reducing the need to be out on the floor.
Similarly, when things do end up needing help, employees will have the tools they need in the form of schematics, which negates the need for an external technician to come over and fix things. For those companies that provide components to others for use in manufacturing, they can push all available information downstream to their customers to prevent being called out to troubleshoot things themselves.
SAP Business Network for Asset Management applications pillar further reduces the amount of risk workers could be exposed to. With all business data they need at their fingertips, there will be less need to work in the office. This means business can continue to be conducted from the safety of one’s house, bypassing completely COVID risk from public transportation and shared office space.
SAP Business Network for Asset Management connects people with the information needed to keep the wheels turning. This is a benefit to businesses that utilize multiple different vendors in their asset network. And as we’ve seen recently, less in-person collaboration has become a way of life. Tools that help connect everyone and everything are in heavy demand—and SAP Business Network for Asset Management is a great tool for those familiar with the SAP system or using SAP S/4HANA for their logistics processes.
Want to learn more about EAM with SAP? Check out our list of plant maintenance books for both SAP ERP and SAP S/4HANA systems here and get the foundation you need to implement SAP Business Network for Asset Management down the road—or today!