Over the past decade, the manufacturing industry has used information technology to achieve tremendous productivity improvements and cost-savings. While most of the headlines in this area have focused on systems designed to streamline manufacturing processes – such as manufacturing execution systems and supply chain management technology – one of the most successful technologies has been enterprise asset management (EAM).

EAM has driven billions of dollars of waste out of manufacturing operations over the years by automating and optimising the way in which companies procure, track, manage, maintain and dispose of capital assets. Even small improvements in capital asset management can have a dramatic impact on corporate earnings.  

The first generation of EAM was client/server-based. These solutions were a dramatic improvement over paper-based processes, but they were designed for a world in which deployments were limited to individual locations. They were not designed for today’s networked world, in which companies would prefer to deploy EAM solutions across multiple locations by installing a single instance of server software, and then enabling all locations to access it via the World Wide Web.

Furthermore, large enterprises have found that standalone client/server implementations are difficult to integrate with other systems, such as ERP or automated procurement, because there is usually a different version of the EAM software running in each location, each with its own integration requirements.

Today, many large companies are reaping the benefits of fully automated EAM without the shortcomings of client/server implementation. They are doing this by adopting Web-based EAM applications, deployed as a hosted solution.

EAM Meets the Web
The hosted application model can provide breakthrough cost-savings for companies while delivering product capabilities that are far more powerful than anything that was available in first-generation client/server systems.

With the hosted model (also known as the “application service provider” model), a third party actually “hosts” the server software for the company, and end-users access the application over the Internet. This model can drastically reduce the total cost of ownership for enterprise applications, because it eliminates the hardware and software costs associated with maintaining a server in house, while also eliminating the personnel costs associated with installing, administering and maintaining the application. So, in effect, companies are able to gain the benefits of the application, without incurring the costs and effort associated with hosting it in-house.

According to International Data Corporation, the average time to achieve 100 percent return on investment (ROI) with a hosted application is 16 months, and the five-year ROI for the hosted model is 404 percent. Numbers like these provide compelling evidence that hosted applications, while still relatively early in their existence, will become the most widely used method of enterprise application deployment moving forward.

There are other benefits to the hosted model as well. For example, because the server software is kept in a single, central location, any upgrades made to that software are instantly available to all companies and end-users. Compare this to client/server, where companies have to wait for the next version of the software to be physically delivered and installed on every desktop before they can benefit from upgrades and updates. Furthermore, the hosted model eliminates the need for IT personnel to implement the updates, because the hosting service provider handles it all centrally. This further reduces the total cost of application ownership.

What Makes An Effective Hosted Web EAM System
The benefits of the hosted EAM model are compelling. But not all hosted Web EAM offerings are alike, and it is important to understand the characteristics such a solution must have in order to deliver maximum benefit.

There are two ways in which software vendors can go about making their applications available over the Web: they can either “Web-enable” existing client/server applications, or they can “re-architect” these applications from scratch so they’re optimised for the Web.

The problem with Web-enablement is that it usually forces additional technology on the customer. The server software is hosted by a third party, but end-users must install special “enabling” technology in order to access the application, which adds significant cost, slows application deployment and largely defeats the purpose of a Web-based solution. (Remember that one of the compelling cost-saving benefits of the hosted model is not having to install special software on client desktops.)

Furthermore, Web-enabled client/server applications tend to have relatively poor performance and scalability. This requires customers to install special high-speed Internet connections in order to make the application useful, and to purchase additional hardware when new sites and end-users are added to the application, which further increases the total cost of ownership and complicates deployment.

Virtually all EAM software vendors today claim to have a Web-based EAM product. However, a quick peek under the covers shows that most of them only offer Web-enabled products, not true Web-architected EAM solutions. Companies considering their EAM options need to understand this, or they might find themselves adopting a Web EAM solution that is just as expensive and cumbersome to maintain as old-world client/server solutions.

Web-architected EAM solutions are those that have been “built from the ground up” for the Web. They are based on Web technologies (not client/server technologies), they perform well across regular Internet connections, and they require nothing more than a Web browser on the desktop to access the application.

It is a major undertaking for a software company to completely re-architect its applications for the Web, which is why so few vendors in the EAM space offer pure Web-architected solutions. However, for companies seeking to reap the cost-savings and other benefits of the hosted EAM model, Web-enabled client/server applications will not deliver the goods. A pure Web architecture is the only game in town.

Take the Litmus Test
There is a simple litmus test you can use to determine the contenders from the pretenders when choosing a Web-EAM solution. It involves the following two questions:

• Can my end-users access the application with nothing more than a Web browser?
• Can the application scale easily to include new locations and end-users, with no need to install additional client software and no need for any modifications to be made to the server software or hardware?

If the answer to either of these questions is “no,” then you’re not looking at a 100 percent Web-architected solution. You’re looking at a Web-enabled application, and you will not get the full benefits from the hosted model.

If the answer to both questions is “yes,” then you are looking at a Web-architected application that stands to save you considerable sums of money on your EAM investment. Furthermore, because Web-architected applications are built on open standards, they integrate easily with complementary applications, such as ERP and e-procurement, to further improve productivity.

In today’s economy, where companies are watching every dollar they spend, a hosted Web-architected EAM solution is a prudent investment. The application itself provides substantial ROI by allowing companies to manage capital assets with maximum efficiency; and the hosted model amplifies that ROI by drastically reducing total cost of ownership.

That’s a smart investment in any economy.