Business Case For Asset Performance Management Software
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Executive Summary
Verdantix asked 284 operations executives for their views on the role of asset performance management (APM) software in their firms’ operational excellence initiatives, and 97% said that it was either ‘very significant’ or ‘significant’. In contrast, only 15% of those surveyed said that they were using a commercial APM software application as of the end of 2020. One of the core reasons for this disparity is the difficulty in quantifying the benefits of strong APM performance. In this report, we provide operations executives a framework to develop a numbers-driven business case to support an APM investment plan. We show how APM can help firms save millions in production losses and maintenance costs as well as in insurance and inventory expenses, and lay out the key activities needed to achieve a successful deployment. We conclude by applying the framework to three specific hypothetical scenarios: a 100,000-bpd oil refinery plant, a $150-million heavy machinery manufacturing factory and a 600-MW wind farm, each achieving over 70% return on investment (ROI) during a five-year period.APM Solutions Meet Cross-Functional Asset Management Objectives
Organizations Turn To Commercial APM Solutions To Advance Their Maintenance Strategies
Fragmented Ownership Of Asset Management Decisions Impedes APM Investment Support
How To Structure The Business Case For APM Solutions
The APM Business Case Should Combine Financial And Strategic Upsides
Operations Executives Should Follow A Six-Step Process When Building The Case For APM Software
Applying The Model: Three Hypothetical Scenarios That Quantify Financial Benefits
Business Case Model Applied To A 100,000-bpd Oil Refinery Plant
Business Case Model Applied To A $150-Million Revenue Machinery Manufacturing Factory
Business Case Model Applied To A 600MW Wind Farm
Figure 2. Benefits, Risks And Costs Of Asset Maintenance Strategies
Figure 3. Factors Holding Back Efforts To Digitize Asset Performance Management
Figure 4. Operational And C-Suite KPIs Of APM Software
Figure 5. APM Software Capital Investment And Running Costs
Figure 6. Challenge Posed By Fragmented IT Systems To APM Software Success
Figure 7. Aligning With Four Strategic Goals Boosts Funding Prospects For APM Solutions
Figure 8. Steps To Creating A Numbers-Driven Business Case For APM
Figure 9. Financial Summary Of APM Software Business Case—100,000-bpd Oil Refinery Plant
Figure 10. Financial Summary Of APM Software Business Case—$150-Million Machinery Factory
Figure 11. Financial Summary Of APM Software Business Case—600MW Wind Farm
About the Authors
Malavika Tohani
Research Director
Malavika is a Research Director at Verdantix, guiding research that explores how digital technologies and services are reshaping industrial operations to become safer, more ef...
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Victor Voulgaropoulos
Director, Advisory Services
Victor is a Director in the Verdantix Advisory practice, where he leads pre-deal and growth strategy engagements for private equity firms, software vendors and corporates. Wit...
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