How Asset Performance Management (APM) Solutions Differ from Asset Investment Planning (AIP) Solutions
Table of Contents
1. Executive Summary
The definition of asset management is broad and spans solutions that support different levels of decision making for an organization’s asset base. This white paper attempts to address the question of how Asset Performance Management (APM) solutions differ from Copperleaf Asset™, Copperleaf’s Asset Investment Planning (AIP) solution, and to clarify the capabilities and benefits of each.
2. Introduction
Organizations invest billions of dollars every year, making major decisions each day about how to maintain and expand the infrastructure critical to our society. These decisions are complex, balancing a wide range of strategic and tactical objectives, such as safety, reliability, cost, levels of service, environmental responsibility, and more.
In today’s asset management landscape, several software solutions are available to help organizations make optimal asset management decisions, including Asset Investment Planning (AIP) solutions, which help organizations make complex, longer-term strategic decisions related to budget allocations and overall management of their assets, and Asset Performance Management (APM) solutions, which focus on supporting short-term (daily or weekly) maintenance and operational decisions to improve the reliability and performance of assets. While they may seem quite similar at first, each solution has a different approach to asset-based decision making and different strengths in the asset management process.
This white paper outlines key factors that should be considered when deciding what type of asset management software to procure. It highlights the strengths of both Copperleaf Asset and APM solutions, the differing capabilities of each, and the key benefits provided by each type of solution.
3. APM Solutions
The information presented in this section is compiled from a review of reference papers and research material, combined with insights from Copperleaf’s 20+ years of experience and leadership in asset management. It summarizes the key capabilities and the challenges that can be addressed by Asset Performance Management (APM) solutions.
3.1 What is Asset Performance Management?
According to Gartner, APM “encompasses the capabilities of data capture, integration, and analytics tied together for the explicit purpose of improving the reliability and availability of physical assets. APM includes the concepts of condition monitoring, predictive forecasting, and reliability-centered maintenance (RCM).”
APM software is becoming a primary enabler of digital transformation for asset management because it combines traditional asset management practices with new digital technologies—delivering advances in reliability, maintenance, execution, and business performance. Emphasis is placed on asset monitoring; APM solutions leverage the ability of IIOT (Industrial Internet of Things) devices to collect asset data and apply artificial intelligence to help predict equipment failures, optimize asset health, and plan asset intervention strategies.
To provide these intricate predictions, APM solutions require a significant amount of asset data. This can limit the value of an APM implementation for organizations that haven’t already made an investment in data collection and monitoring equipment, as these organizations are not able to fully utilize the potential of an APM and get useful outputs.
APM solutions focus on short-term preventative maintenance: alerting when an asset is about to fail, enabling intervention before it fails, and averting disaster and resultant elevated costs. APM solutions are focused on operating expenditures and are typically characterised as providing short-term analytics and planning time horizons.
APM solutions combine IT (information technology) and OT (operational technology) data and provide analytics to improve asset reliability, predictive maintenance, and risk-based inspections. APM solutions are largely utilized by operations and maintenance groups and focus on improving the performance of individual assets rather than looking at the overall performance of the entire asset population. The emphasis is on depth, not breadth, with the explicit purpose of improving the reliability and availability of individual assets.
Key APM capabilities:
- Asset health monitoring
- Collecting real-time condition data to determine the health of the organization’s assets. This data usually comes from sensors on the asset or through field-based inspections.
- Maintenance demand generation
- Configures indicators and rules about asset condition which automatically trigger actions, such as generating work orders to an EAM system to undertake specific maintenance activities.
- Asset failure prediction
- Performs analytics to predict when assets will fail. A virtual representation that serves as the digital counterpart of a physical object, or digital twin, is employed to model how the asset’s condition will degrade through utilization and over time so that it can be intervened upon before failure.
- Real-time asset data from IIOT devices can be used in conjunction with machine learning (ML) applications to detect performance anomalies. Historical information on a variety of asset types can be compared against real-time sensor data to detect deviations, predict probability of failure, and schedule appropriate interventions.
- Criticality assessment
- Estimates risk based on a risk matrix. Users perform a questionnaire-based criticality assessment, and while future risk cannot be precisely forecasted, an estimation can be produced.
- Maintenance strategy management
- Identifies the best maintenance approach for individual assets. There are generally two key approaches to maintaining assets: fixing something when it breaks or fixing something before it breaks. APM solutions can apply a risk-based asset management methodology to develop a short-term maintenance strategy that minimizes asset failures. These strategies maximize the uptime and performance of individual assets without consideration of program-level resource and budgetary constraints.
- APM-developed maintenance strategies are also used for scheduling equipment downtime.
4. Copperleaf Asset
4.1 What is Asset Investment Planning?
Verdantix, an independent research firm, defines AIP as a “data-driven approach to assess and prioritize capital investment strategies over a medium- to long-term period (typically more than a year), allowing organizations to manage assets, meet business-level objectives, reduce the risk of asset failure, and minimize the need for wide variations in capital spending.”
The firm describes the differences between APM and Asset Investment Planning (AIP) solutions as follows:
APM solutions “support the daily or weekly operational decisions and aim to improve the reliability of assets. AIP software instead enhances complex, longer-term tactical and strategic decisions relating to the CapEx/OpEx budget allocations and overall asset management planning. AIP systems leverage asset data (primarily sourced from APM and EAM systems) to predict the current and future performance of the asset base over a predefined horizon (usually over a year). The feasibility of each intervention option is determined using economic analysis, while each investment project as well as the overall plan is finally optimized around certain user-defined strategic inputs such as budget and regulatory (e.g. ISO 55000) constraints.”
The following diagram provides a high-level comparison of the decision types and timescales for AIP, EAM, PPM, and APM solutions:
Figure 1: An analyst’s view of the asset management landscape
4.2 Copperleaf’s AIP Solution
Copperleaf® provides enterprise Asset Investment Planning (AIP) software that empowers organizations to optimize asset planning decisions for the next one to one hundred years. It balances risk, cost, and business outcomes across the entire asset base to create the best possible asset sustainment plans. The Copperleaf AIP solution, Copperleaf Asset, uses a value framework to consistently assess the risks, benefits, key performance indicators (KPIs), and costs of all potential asset investments and make optimal investment decisions that balance operational needs with strategic objectives.
APM systems typically recommend an ideal asset maintenance schedule; this can be considered a “bottoms up” analysis of what each asset needs and when. However, when considering the combined needs of an organization’s entire asset base, the available funding, resource requirements, and other business constraints, it is typically impossible to perform work on each asset at its ideal time. Some asset interventions must be delayed, but which ones? And by how much?
Unlike APMs, Copperleaf Asset understands that it isn’t realistic or the highest value to perform all maintenance on an optimal schedule. Copperleaf Asset considers the costs, value, and risk implications of deferring each asset intervention to create an investment plan that delivers the maximum value to the organization and its customers. It factors in multiple constraints related to funding, resources, risk tolerances, and service levels. Crucially, to schedule recommended interventions for each individual asset, Copperleaf considers the needs of all dissimilar assets in the overall population and trades off resources between them. Programs can be competed against one another, and trade-offs made at an asset-by-asset granularity to identify the highest value plan within business constraints.
Copperleaf Asset can be characterized as a value-based, long-term proactive management solution: it schedules planned interventions at a yearly granularity within consideration of a businesses’ strategic objectives. This “top-down” analysis helps determine what should be done and when to deliver optimal outcomes while respecting business constraints. Copperleaf Asset can predict asset needs decades into the future, ensuring organizations are developing plans that proactively manage risk to avoid an accumulation of future risk due to underinvestment. Organizations can make more holistic decisions for their assets by balancing operational objectives such as safety, reliability, cost, and service levels with strategic goals related to environmental and social responsibility. Copperleaf Asset helps organizations create long-term plans that balance these factors and make optimal, rigorous asset sustainment decisions with agility and efficiency.
Figure 2. Copperleaf helps organizations avoid the accumulation of risk due to underinvestment
The AI-powered Copperleaf solution combines a configurable asset registry, industry best practice asset models from the Copperleaf Value Model Library, and powerful optimization capabilities to develop optimal asset strategies that deliver the best outcomes while taking account of all business constraints.
Integrations allow Copperleaf Asset to leverage asset data from GIS, EAM, and APM systems. Since it doesn’t make real-time failure predictions, Copperleaf Asset’s asset models don’t have the same asset data requirements as an APM. This shortens implementation time and time to value.
Key Copperleaf Asset capabilities:
- Common Value Framework
- Considers funding, resource, and service level requirements to develop an actionable asset strategy that can be accomplished with available resources and drive achievement of business objectives.
- Assesses the value of every potential asset investment on a common economic scale; any number of value measures can be added, including all types of risk, financial and non-financial benefits, service measures, environmental and social objectives, and key performance indicators (KPIs).
- Trades off capital and maintenance costs during planning to support TOTEX planning.
- Enables data aggregation and automatic asset modeling; supports both simple and complex asset modeling.
- Risk management
- Creates, manages, and visualizes asset strategies that maximize business value while proactively managing risk.
- Compares how different levels of investment impact risk, provides visibility into long-term risk exposure and the impact of different strategies on risk over time.
- Integrates data from other systems to provide an enterprise-wide understanding of asset risk.
- Balances proactive and reactive spending for asset sustainment.
- Planning capabilities
- Effectively handles millions of assets to produce optimal lifecycle strategies across the entire asset base.
- Automatically bundles asset interventions together into projects to minimize outages and reduce costs.
- Considers all business inputs during asset strategy optimization, resulting in an actionable plan that can be accomplished within available resources and drive achievement of strategic outcomes today and into the future.
- Easily creates and explores what-if scenarios based on different constraints to ensure you select the investment plan that best suits your organization’s strategic objectives.
- Clear visualizations of plan outcomes
- Uses a transparent, data-driven approach to decision making, making it easier to communicate and defend asset strategies.
- Standard integrations
- Seamless integration with best-in-class portfolio investment optimization solution, Copperleaf Portfolio™.
Figure 3. Copperleaf Asset and APM decision making visualization
5. Other Considerations
The investment of both time and money required to procure and implement an enterprise software solution can be significant, and asset management solutions are no exception. These systems represent important investments to the organization and therefore need to be thoroughly researched and evaluated prior to selection. Along with the investment into a solution, organizations may also consider the following when choosing their desired asset management systems:
- Costs for implementation resources, training, and ongoing support
- Time frame for implementation
- Stakeholder requirements
- Adaptability to future needs (i.e. the path to updates and upgrades)
- Asset data requirements (e.g. monitoring equipment, inspections, historical failure data, etc.)
What’s Best for Your Organization?
Quality asset management for critical infrastructure is now more important than ever. Managers in asset-intensive industries are inundated daily with difficult decisions that can significantly impact their organization’s profitability and ability to deliver on their commitments.
Organizations recognize that a commitment to any enterprise solution must be well researched, understood, and smartly implemented to create the most value for the business. With the capabilities outlined above, here are the benefits of each solution to help further understand which adds the most value under which circumstances.
APM systems and Copperleaf Asset fulfill different needs rather than compete against each other. Deciding which solution to implement first is driven by the specific needs of the organization.
For example, an APM solution is the right fit if you are running a thermal plant with four combustion turbines and your top priority is keeping them running in peak condition for minimum cost.
An AIP solution is the right fit if you are running a fleet of thermal plants and associated infrastructure and care about many different decision parameters in addition to reliability and risk exposure, such as TOTEX and ROI, over a long timeframe.
5.1 APM Benefits
Implementing an APM solution supports short-term (daily or weekly) operational decisions and delivers improved asset reliability and availability. APM benefits include:
- Maximizing uptime
- Leveraging asset health monitoring to ensure high levels of asset reliability.
- Use of analytics to improve performance efficiency and minimize asset downtime.
- Mitigating short-term risks
- Avoid hazardous incidents that may impact employees, the community, or the environment.
- Minimize regulatory risk through short-term risk estimation.
- Improving maintenance planning
- Reduce cost associated with maintenance and repair work by intervening on assets before they fail.
- Increase first time fix rates through better data and resource allocation.
- Supporting short-term decision making
- Provide visibility into the effectiveness of maintenance strategies.
- Improve employee productivity through the automation of asset modeling and inspection collation.
5.2 Copperleaf Asset Benefits
Implementing an AIP solution such as Copperleaf Asset supports medium- to long-term strategic asset management decisions and ensures investment plans are aligned with strategic objectives. Copperleaf Asset benefits include:
- Balancing cost, risk, and business outcomes across the entire asset base
- Make informed trade-offs between capital and maintenance costs to create a plan that balances total expenditure and minimizes overall cost.
- Quantify and assess all asset risks on a common scale to build a plan that mitigates the most risk and drives your business objectives.
- Aligning decision making with strategic objectives
- Ensure asset investment plans support strategic goals, including financial, ESG, risk, KPIs, and other targets.
- Develop executable plans that consider funding, resource, and service level requirements.
- Improving planning efficiency
- Realize improved planning efficiency with decreased cycle time and reduced effort. This leads to greater organizational agility and resilience, enabling quicker response to changing business conditions.
- Identify potential bundling opportunities to minimize service interruptions and plan asset sustainment work in the most efficient and cost-effective way.
- Proactively managing risk exposure
- Value based decision-making leads to more risk mitigated per dollar spent.
- Using asset models that quantify all the risks and benefits of an intervention during optimized “what-if” analysis provides organizations with a communicable, defensible plan.
- Communicating, visualizing & defending asset plans
- Justify plans to internal and external stakeholders and improve regulatory outcomes by demonstrating how plans contribute to strategic objectives.
- Expedite approvals of requested funding due to clear defensible plans (e.g. rate cases).
- Understand the long-term risk exposure of the asset population and how different investment strategies impact risk to build a robust, defensible plan.
- Leveraging data sources
- Asset data from GIS, EAM, and/or APM systems can be used to improve asset management planning.
- Shortening time to value
- With less asset data required, Copperleaf Asset implementations require significantly less time and resources when compared to implementing an APM.
“Copperleaf Asset has become an integral part of us managing our capital portfolio and implementing our asset management program.”
– Paul Barnett, Senior Program Manager, Tennessee Valley Authority
5.3 A Comprehensive Asset Management Approach
While organization often must decide to implement either an AIP or an APM solution first based on their immediate priorities, leading organizations end up implementing both. Together, AIP and APM solutions provide a total asset management environment that elegantly handles both short-term maintenance planning and medium- to long-term strategic asset planning.
The benefits of a total asset management solution with Copperleaf Asset and an APM can be summarized as:
- Complete view of short- and long-term maintenance decision making
- APM’s ability to leverage IIoT technology and rich sensor data provides a detailed understanding of how an asset is performing today.
- Copperleaf Asset’s ability to leverage asset models from an APM system delivers long-term intervention plans that maximize the economic value of the asset while minimize risk.
- Make the best possible maintenance, replacement, and overhaul decisions today, tomorrow, and into the future with a holistic view of the work needed to maximize the asset value.
- Decisions aligned with strategy
- With the integration of the Copperleaf Value Framework, asset managers can ensure asset sustainment decisions are aligned with strategic objectives.
- Automatic work bundling and asset strategy optimization
- Optimization with automatic bundling can be leveraged to greatly improve both planning efficiency and planning results.
- The richness of asset data from an APM system improves the outputs of Copperleaf Asset.
- Reducing siloed decision-making and spending
- Often, operations and maintenance and capital planning teams operate in silos, with reliability engineering, maintenance scheduling, asset management, and capital planning operating in segmented systems.
- Siloed decision making can lead to inefficient spending whereby proactive maintenance activities are carried out against assets for which a capital intervention is planned in the very near term, “stranding” the OPEX spend in an asset where it won’t deliver maximum value.
- By integrating APM and AIP systems, full visibility can be gained into the asset lifecycle to ensure alignment between operations and maintenance and capital teams.
6. Conclusion
Both Copperleaf Asset (AIP) and APM solutions can provide significant value to organizations managing critical infrastructure. To decide which solution is the higher priority for your organization, you should consider over which time horizon improved decision making will provide more value.
APM solutions support daily or weekly operational decisions and deliver improved reliability and asset availability. APM solutions are very good at short-term preventative maintenance and focusing on operating expenditures. As a “bottom-up” decision making tool, APMs emphasize the collection of real-time data (IIOT telemetry) or near-real time data such as updates from field technicians to improve the performance of individual assets.
In contrast, Copperleaf Asset empowers organizations to optimize asset planning decisions across the asset population over a longer-term horizon. Combining capital and operating expenditures, Copperleaf Asset can be characterized as “top-down” decision making; it schedules planned asset lifecycle interventions years to decades into the future. Organizations can make long-term asset investment decisions that balance cost, risk, and business outcomes across the entire asset base, aligning their asset management decisions with their strategic objectives now and into the future.
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