Stories from SAP Centric EAM 2013 – An EAM Policy – Can Your Organization Improve Without One ?
[ Insights from the SAP-Centric EAM 2013 Event – Huntington Beach March 2013 ( Part 3 of 12 ): This is part of a blog series brought to you by Norm Poynter and Paul Kurchina, designed to inspire and educate by sharing experiences with the SAP Enterprise Asset Management (EAM) Community. For the past nine years, the Eventful Group’s SAP-Centric North American Event ( Supported by SAP and ASUG ) has brought together the EAM community to network, share ideas and experiences, and explore solutions for Enterprise Asset Management.]
This blog is based on Norm Poytner’s presentation ” An EAM Policy – Can Your Organization Improve Without One ? “
Newsflash: SAP itself is not the driver behind most of the changes in asset management. Instead, human thoughts and behavior are the drivers of such change. SAP comes to the EAM party empty. To make it valuable, people must populate the system with foundational information about assets, plans and schedules for how to manage them, and finally the business decisions on what happened while doing so. If all of this goes well, the data turns into information through analytics and the ever so important continuous improvement loop is engaged.
Supporting the human interaction are policy, process, standards, procedures, and associated governance. Without them, change will not occur. In fact, policies form the foundation for building EAM and enabling business analytics. Clear, concise, consistent, and commonly understood policies are key to organizational improvement. Just as they are in our everyday lives, whether it be parenting our children or conforming to governing laws of our home country, policy (overarching expectations) set the stage.
But simply having an EAM policy in place doesn’t guarantee success. In addition to policy, there are the important components of business processes, standards, and procedures. Without them, a policy might just as well be a blank piece of paper. As the acronym EAM suggests, a complete management system is required to effectively and efficiently manage safety, reliability, availability, and analysis of physical assets. The components help complete this package. In this post I explain the relationships between these components and offer some guidance for implementing and sustaining useful EAM policies.
You Need a Vision
The ultimate goal of any policy is to change behavior. The trouble is, everyone in an organization behaves differently. Everyone has their own perspective depending on their role and responsibilities. A CEO’s perspective might be financial: “Are we running on budget? I need to know where we are on spend.” A manager’s perspective is different: “Why are we so far behind schedule, again ? ”
The common thread needed to unite the disparate perspectives of these different roles is a universal vision. For example, in the oil and gas industry, the vision may be “To be the safest, most reliable, low-cost operator in the universe” (the “universe” is a bit of a tongue-in-cheek statement, but you get the idea). A key first step is to seek alignment through vision, but, as often happens, this step is taken far too lightly, skipped over entirely, or given a patronizing attempt. This is a serious foundational step in the evolution of your EAM program and without it your chances of success diminish quickly.
Add in Policy
So you have established a sweeping vision. Without a policy to support it, vision won’t be enough.
Investors and the CEO are happy when a vision is in place. However, a manager might see it from a different perspective: “What’s all this garbage the CEO is sending me? I don’t have time to read all this. I have a business to run.” An operator may be even farther away from the vision: “Is my machine fixed yet ? What’s the hold up ? ”
The formalization of the vision and the associated workshops to “commit it to paper” are important steps to gain alignment. A written vision alone cannot change behaviors though. You need some written rules and clarity around the vision. This translates into policy. It describes the high-level expectations and actions to take when addressing a given business scenario.
Create a Process
So now you’ve got a written, formal policy, but the CEO notices that little progress is being made. However, progress is fully dependent on tasks being performed in a consistent manner, targeted at achieving a common goal. To this end, a well-articulated business process is required to create and manage your task expectations and data collection requirements. A business process can be defined as identifying what happens over time (first this happens, then that happens).
Hold Everyone to the Same Standard
You might think that with the business process in place, all should be right with the world. Not so. Typically, even with a documented business process, everyone seems to be doing their own thing. To get people on the same page, they need to be measured against a set of requirements. To be able to measure, you need a to have a standard. A standard is a document that sets out the minimum requirements (the things you must have and must do, and the quality expectations for those things and tasks). Without these minimums, performance measurement becomes subjective at best. And let’s be clear that it’s not enough to just write down the standard; you must roll it out, implement it, and make it part of the corporate fabric. Consider your favorite restaurant franchises. We all expect the same food items (menu), quality, and experience no matter what country, state, province, or city we are in. This is an example of a well rolled out standard. Now, for a moment, reflect on your various plants and facilities. Can you say the same for them?
Get ‘Er Done: Add in Procedure
Now the CEO is jazzed. With all of these mechanisms in place, he can’t wait to see the progress. His manager isn’t so enthusiastic. “I’m all for this data program, but I looked at the numbers. At this rate, it’ll take us 10 years to complete it. We’re effective (high quality) but we need to be more efficient ( greater speed ).” So they need a procedure. Henry Ford’s introduction of the assembly line is a world-renowned example of an effective and efficient procedure. Provide both quality and speed to garner business value ( profit) . This concept changed the world then and is still the benchmark today.
A procedure is defined as a tool ( document or other media ) that provides step-by-step instructions explaining how to perform the tasks identified in the process to meet the requirements of the standard. Often a procedure will also consider the implications of variance to that procedure. Consider the installation of a new refrigerator. The installation procedure clearly states “Do not plug in for X hours after delivery or serious damage will occur.” Further, if it has an icemaker the procedure will clearly state not to activate the icemaker without first connecting the water line. Again, or “serious damage will occur.”
Keep It Interesting !
There’s one more component: Imagine if you had the power to make all of this really interesting. Is there emotion tied to it ? Does it motivate and inspire ? To explore this, check out Volkswagen’s The Fun Theory.
Until you create the structures (Vision, Policy, Process, Standards, Procedures) required to correctly populate and harvest information from the SAP system, how can there be value to an organization? Undoubtedly millions of dollars were spent to by IT to implement it – in an empty state. Shouldn’t you place equal focus on the people and business structures ? Once you see this gap and begin to close it, the sky’s the limit on what you can accomplish with SAP EAM.
To learn more, watch the video of Norm’s talk, and view the presentation slides.
To view other blogs in this series.
thanks for sharing
Good post; thanks Paul.
Always good to indulge on everything EAM, Great article.