1. Top Strategies for Asset Performance Management (APM)
Mehul Shah, Research Analyst Aberdeen Group
February 24th, 2010

2. Agenda Introduction Polling Questions
Define Asset Performance Management
Challenges
Aberdeen Research Frameworks
APM Research Results
Recommendation for Action

3. Polling Question # 1
What are your CFO’s TOP THREE (3) OBJECTIVES for the next 12 months?
Revenue growth
Reduce operating expense
Improve profitability
Customer satisfaction
Risk Management
Maintain or improve product and service margins
Sustainability / Corporate Responsibility

4. Polling Question # 2
What are the TOP TWO PRESSURE driving you to focus on asset management? (Select two)
Maximize Return on Assets (RoA)
Reduced operational and maintenance budgets
Aging assets
Need to comply with safety and regulatory requirements
Increasing demand variability

5. Polling Question # 3
What are the TOP TWO STRATEGIES that your company is establishing to address the pressures?
Implement advanced asset performance management and analytical capability
Establish a risk based strategy
Create / improve real time visibility into asset performance
Improve collaboration across maintenance, production and financial groups

6. What is Asset Performance Management?
Approach that synchronizes operations, maintenance, and engineering goals
Balancing asset availability and asset utilization
Risk Management – Maintenance based on criticality of asset
Visibility into complete lifecycle of asset – Understanding the Economic Value Add
Aligning asset performance to corporate performance

7. 6 Major Roadblocks to Asset Management
Change in culture required to move from break fix to proactive maintenance
Asset management is still viewed as a cost center by senior management
Lack of communication among production, maintenance, engineering and IT departments
Complex and disparate data sets present a significant road block to decision making
Lack of awareness of how asset management can reduce environmental impact
Transfer of knowledge from a few experienced employees to others

8. Our Research Methodology
5,000+ Executives surveyed
10,000 + data points collected per study
12 Benchmark Reports planned for 2010
Library of 15,000 benchmark survey responses and 200,000 data points

9. Aberdeen Maturity Class Framework
Best-in-Class
- Top 20%
Selected Performance Criteria (KPI)
Industry
Average
Total
Respondents:
Unscheduled Asset Downtime
OEE
- Middle 50%
Return on Asset Goals
Laggard
- Bottom 30%
Respondents are scored individually across KPI

10. Aberdeen’s Methodology End-User Investigation: PACE Framework
Pressures:
External and internal forces that impact an organization’s
market position, competitiveness, or business operations. P A
Actions:
The strategic approaches that an organization takes in
response to industry pressures.
Capabilities:
The business competencies (organization, process, etc…)
required to execute corporate strategy. C
Enablers:
The key technology solutions required to support the
organization’s business practices. E

11. Aberdeen Maturity Class Framework
Asset Downtime
OEE
Return on Assets
What are Best-in-Class companies doing differently?
What pitfalls are they avoiding?
Why are they achieving greater success?
What technologies and services are enabling them to succeed?

12. Study Demographics Current Survey Respondents: 139 Job Title:
26% Upper Management (CEO, COO, CFO, CTO, President, VP, Partner/Principle)
22% Director
23% Manager
10% Staff
Revenue Size
30% Small (under $50 Million)
38% Medium ($50 Million - $1 Billion)
33% Large (Over $1 Billion)
Geographies:
55% North American
17% Asia Pacific
17% Europe
9% Middle East, Africa
Industry
21% Oil/Gas
11% Consumer Packaged Goods
8% Utilities
5% Chemicals
4% Metal and Metal Products
4% High Technology Manufacturing
2% Automotive

13. Top Objectives of CFO’s
Source: Aberdeen Group, October 2009

14. Source: Aberdeen Group, October 2009
Budget Changes
38%
47%
36%
35%
31%
32%
27%
22%
28% 0%
10%
20%
30%
40%
50%
Capital Expenditure
Operational Expenditure
Maintenance Budget
Decreased
Increased
Remained Same
Percentage of Respondents, n=139
This is of no surprise to us that Majority of CFO selected reducing operating expense as the top goal for the next 12 months. Further analysis showed that more than 60% of the total survey population have seen decrease in caps, operational and maintenance budget or have remained the same.
Forward thinking CFO are also thinking of how to improve corporate revenue and profitability metrics in the wake of reduced budgets.
When we looked to see if there is something BIC CFO’s are doing different, we found that they are more likely to take a risk management strategy as compared to other. This trend is further exemplified in the Aberdeen report, where we surveyed more than 4000 companies, and the CFO were found to be more likely to establish a goal of managing risks across the enterprise.
Source: Aberdeen Group, October 2009

15. Top Pressures Driving Improvement in Asset Performance Management
Source: Aberdeen Group, October 2009

16. Defining the Best-in-Class:
Industry Average
Performance Criteria Used to Identify Best-in-Class
Laggard
Operational Equipment
Effectiveness (OEE)
88%
81%
75%
Unscheduled Downtime 2%
11%
18%

17. Results Achieved by Best-in-Class:
Estimated performance against corporate plan..
30%
Over achieved by 25%
25%
20%
15%
10%
Over achieved by 7%
Percentage of Respondents, n=139 5% 0%
-5%
-10%
Missed by -10%
-15%
Return on Assets (RoA)
Best-in-Class
Industry Average
Laggard

18. Source: Aberdeen Group, October 2009
Actions – The “A” of PACE Initiatives the Best-in-Class Leverage to Outperform Peers
32%
23%
41%
40%
26%
39%
57% 0%
10%
20%
30%
50%
60%
Synchronize asset performance with corporate
performance objectives
Create / improve real time visibility into asset
performance
Establish continuous improvement programs
Establish a risk based strategy
Implement advanced asset performance
management and analytical capability
Percentage of Respondents, n=139
All Others
Best-in-Class
Source: Aberdeen Group, October 2009

19. Source: Aberdeen Group, October 2009
Process Capabilities
Source: Aberdeen Group, October 2009

20. Organization Capabilities
Source: Aberdeen Group, October 2009

21. Knowledge Management Capabilities
Visibility
Source: Aberdeen Group, October 2009

22. Performance Management Capabilities
Source: Aberdeen Group, October 2009

23. Source: Aberdeen Group, October 2009
Sustainability
Source: Aberdeen Group, October 2009

24. Enterprise Wide Technology
80%
73%
71%
65%
70%
62%
63%
60%
48%
50%
50%
43%
42%
40%
31%
32%
30%
Percentage of Respondents, n=139
22%
20%
10% 0%
EAM - Enterprise
EHS - Environment
BI - Business
Energy Management
Asset Management
Health and Safety
Intelligence
Best-in-Class
Industry Average
Laggard
Source: Aberdeen Group, October 2009

25. Real Time Interoperability4% 7%
17%
14%
28%
33%
18%
16%
23%
42%
31%
25%
35%
38%
50%
55% 0%
10%
20%
30%
40%
60%
Wireless Sensors and CMMS/EAM
Energy Management and CMMS/EAM
CMMS/EAM and BI
CMMS/EAM and Mobile devices
Control System and CMMS/EAM
CMMS/EAM and ERP
Percentage of Respondents, n=139
Laggard
Industry Average
Best-in-Class
Source: Aberdeen Group, October 2009

26. Source: Aberdeen Group, October 2009
Enablers
12%
22%
19%
32%
46%
17%
31%
41%
42%
44%
33%
38%
43%
81% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Mobile Solutions
Master Data Management
Asset Dashboard
Asset Analytics
Spare Parts Optimization
Alerts and Alarm
Management
Percentage of Respondents, n=139
Laggard
Industry Average
Best-in-Class
Source: Aberdeen Group, October 2009

27. Laggard Step to Success
Establish executive ownership and sponsorship for asset performance and energy management strategies across the enterprise
Align goals and metrics across maintenance and production teams
Invest in analytics to provide predictive insights based on the captured asset data
Include energy data (consumption, costs etc) as part of the optimization process to schedule maintenance and production activities

28. Industry Average Steps to Success
Provide on-demand asset lifecycle information to maintenance and production employees
Invest in centralized knowledge warehouse to store asset performance, energy and operations data
Include energy management in corporate wide sustainability initiative
Invest in automation with specific focus on alarm management, dashboards, analytics, and mobile solution

29. Best-in-Class Steps to Success
Align operational performance with corporate performance to understand the impact of asset strategies on organizations financial goals
Manage energy consumption by developing initiatives integrated with the overall asset management strategy
Establish a risk based approach to ensure predictive asset management
Establish real-time interoperability between asset management and business systems

30. Thank You Research Contact: Mehul Shah Research Analyst