Gartner previously published enterprise asset management (EAM) and asset-intensive enterprise resource planning (ERP) suite Magic Quadrants for this category. Changes in customer buying criteria and vendor offerings are reflected in our new market separation; ERP suites will be evaluated in this natural-resources-industry-specific MarketScope, and the component EAM products are in a Magic Quadrant format for relevant asset-intensive industries.

The choice of ERP suites for asset-intensive business is characterized by an increased emphasis on maintenance functions and a reduced emphasis on manufacturing. Traditional vendors have been joined by the new family of offerings from Oracle. Although some suite vendors also actively market their EAM modules and sell them as specialized maintenance functions, we are evaluating the complete suite here, including HR, materials management, financial management and, most importantly, plant maintenance functions. Not all geographies, industries and functions are supported by all vendors (see Table 1), so customers must identify the best fit for their business needs and avoid making a selection based on size alone. As a further consideration, a suite selection moves a company toward "vendor lock-in," and if that is a concern, then reviewing the component EAM offerings is an appropriate strategy.

Because any MarketScope is by necessity an "averaging" of vendors' offerings and performance, we recommend consulting the authors to receive advice about specific needs and issues.

In the words of author Geoffrey Moore, a market is "a set of actual or potential customers for a given set of products or services who have a common set of needs or wants, and who reference each other when making a decision." (See "Modern Technology Markets Defined.")

This MarketScope is for asset-intensive natural resources industries (predominantly the mining and oil/petrochemical sectors) buying integrated ERP suites (see Note 1). The focus of these asset-intensive natural resources companies tends to be as much or more on the plants and on the equipment they use, rather than the products they produce. Applications in this category are robust in the areas of asset tracking and maintenance — but less so in the areas of production planning, which is typically delivered by EAM component applications. The fact that all businesses have some element of assets and maintenance, but are not as clearly separated as the domains outlined above, leads to a propensity of component solutions being offered to customers — where the incumbent ERP vendor is not strong in maintenance, but the users of the system demand functional capabilities that an EAM system might provide.

EAM by itself is not the best model for managing all companies. Asset-centric operations are the ideal implementation ground for EAM, although the model is also useful in other forms of business (such as manufacturing or facilities providers). In asset-intensive industries, maintenance, repair and overhaul (MRO) purchases typically outnumber raw-material purchases by at least 10-to-1 on a transaction volume basis. For some industries, the ratio may be as high as 100-to-1. In addition, asset-intensive industries tend to be 24/7 operations in which downtime results in a production loss that is essentially unrecoverable.

The highest-level system can be described as an industry-specific variation of the ERP suite. This category contains most of the required business functionality being offered from a single vendor on a single architecture as a pre-integrated suite. Sometimes, the vendor may also offer the components by themselves as point solutions, but they are also available as a suite. The variation from "standard" ERP is that there is not necessarily a manufacturing component — that is, there is no manufacturing resource planning (MRP II), and the EAM functionality is more robust and capable of supporting the needs of asset care as the major focus of the business.

Asset-intensive ERP also differs from stand-alone EAM in that there is the inclusion of more-complete financial management and human resources functionality to the point where additional software products are superfluous in those areas. An EAM module or functionality sits within the asset-intensive ERP solution in much the same position that material requirements planning (MRP) would in a production-oriented ERP system. For many asset-intensive manufacturers, there will also be an MRP engine in the business application environment. In the case of asset-intensive ERP, the supply chain is primarily an incoming process to manage the sourcing, internal assignment and distribution of parts for internal consumption.

Vendors have progressively added more-mature maintenance functionality to their solutions. The result is sufficient functionality so that only the most-advanced maintenance users would seek specialist component systems, and then only because of preferences in usability or inherent integration with specific plant control systems. Although the leading ERP suite systems offer integration with plant control systems, they tend to be broader and not vendor-specific (which can be a good thing). Component vendors are increasingly aligned with a single plant control system vendor. However, integrated systems offer an advantage, in that they can overlay the manufacturing schedule with the maintenance schedule to recognize and coordinate them so that the shutdown of critical manufacturing equipment for maintenance can occur without conflict.

Companies that already have an ERP package should look to that vendor first and examine its asset management solution. Of particular concern is whether the vendor offers an integrated EAM or computerized maintenance management system (CMMS) module, and whether it offers enough functionality to meet business requirements. Alternatively, does the vendor have a partner where a formal relationship exists with supported integration? If neither of these conditions is evident, consider a component EAM provider.

Functional: Software products must cater to the majority of the functional capabilities listed below. Most importantly, the vendor should provide as an integrated component in the suite (whether optional or not) a robust asset management (or CMMS) functional set. Additionally, the vendor should provide in the same integrated suite financial software, materials management and human resources.

EAM-specific functionality:

• Detailed asset registry, combined with detailed parts and support descriptions
• Long-term maintenance, project and work schedules
• Support for complex inventory relationships for indirect (blue-collar MRO) goods that are associated with forecasts of planned and unplanned work on installed assets
• Supply chain capability for indirect goods, with demand planning linked to maintenance and repair schedules
• Probability-based "just in case" inventory and procurement, rather than "just in time"
• Support for manufacturer logistic processes for equipment under warranty
• Human capital management (HCM) capabilities to match skills, training and availability with EAM work and legal requirements
• Statistical analysis of equipment performance and reliability
• Remote electronic monitoring of asset health and performance
• Serial number tracking and tracing for equipment and parts
• Financial support via detailed cost analysis of asset utilization
• Extensive warranty tracking to component levels
• Shutdown project planning

Other functionality:

• Financial support via detailed cost analysis of grade costing
• Integrated financial and human resource functionality, including 24/7 operation support
• Logistics (multimodal transportation) and supply chain planning for finished/intermediate products
• Execution layer functional manufacturing execution system/manufacturing operations management (MES/MOM)
• Sales order entry to support commodities

Technical: The software products should cater to large-scale (more than 1,000 users) multisite operations.

Geographic: The vendor must have a significant sales presence (more than 15% of revenue) in at least two continents.

Financial: The vendor must have more than $2 million in annual license revenue attributable to EAM components.

Target markets: The ERP suite must be targeted at and successful in at least one of the two asset-intensive natural resource sector markets covered in this report.

Overall Market Rating: Positive

The market is growing, and there is increased vendor interest in this segment.

Since the cross-industry iteration of the 2006 Asset-Intensive ERP MarketScope, Lawson Software acquired Intentia, which had had some presence in natural resources companies where its high level of functionality — including reliability-centered maintenance and financially optimized maintenance — can be used to improve customer performance. In asset-intensive manufacturing or MRO environments, the maintenance and production alignment tool provides a graphical comparison of fixed and floating production and maintenance views. Intentia's financial performance as an independent company was below market average, but its merger with Lawson has done much to address this issue. Similarly, Intentia's North American presence had been extremely limited, but Lawson now has begun to focus on North America. The company has a limited (compared to the providers listed below) presence in the natural resources sector, although it has a greater presence in other forms of manufacturing and service-related asset intensive industries. Considering the improvement in viability due to the Lawson acquisition, we view Lawson M3 as a promising solution in this sector despite its limited penetration.

Rating: Promising

Mincom has had strong performance in its home country of Australia along with Latin America and sub-Saharan Africa, and it is currently growing its presence in Russia and other countries that were part of the former USSR. Mincom is very focused on the pure asset-intensive industries of utilities (but not nuclear), mining, defense, city government and transportation (but not aerospace). It is Mincom's performance in the mining sector that is being reflected in this MarketScope.

Although Mincom has limited implementation resources in markets outside of Australia, it has advanced and, in some cases, innovative functionality, such as its mining industry support, which extends beyond the Ellipse EAM product to include the MineMarket and MineScape operations products. Although the functionality is above average in scope, the technology is making the transition to a Java-based Web service architecture. However, the technology offers strong performance, with demonstrated large-scale implementations and a versatility of platform and middleware that most other vendors cannot match. Mincom's small scale (and hence customer base) has been a contributing factor to its quality problems in the past. However, under its new management (largely ex-JD Edwards and PeopleSoft executives), the company has improved its financial performance and has begun a period of growth. Mincom's recent acquisition by Francisco Partners has greatly improved its viability and improved the prospects for further functional enhancements via acquisition of complementary solutions. Due to its broad functional footprint and improved financial viability, we see Mincom as a strong, positive player in the mining segment of natural resources. However, because of Mincom's limited presence in the oil and gas industry, we strongly recommend that oil industry clients carefully consider the specific nature of their implementation (geography, specific feature/functions needed, domain expertise and so on) during an evaluation process.

Rating: Strong Positive (applicable to mining only)

Oracle spans the globe, and asset-intensive customers are in evidence in all its operating regions, albeit on a smaller scale than its manufacturing and facilities customers. We see Oracle E-Business Suite as being suited primarily to fixed-plant or linear-asset environments of moderate complexity in terms of maintenance maturity, but we have seen examples of its use in natural resources — both in mining and in oil and gas. The product's functionality had developed steadily since its launch five years ago; so much so that, for most customers, there is little need to pursue a component solution option. The overall architecture is highly scalable, but customers must be aware of the lock-in to the total Oracle technical environment. Within the natural resource sectors, Oracle E-Business Suite is viable in petroleum and mining. Supported by nonsuite applications that Oracle has acquired, such as G-Log in the logistics area and Agile in the product life cycle management/application life cycle management area, Oracle can supply functionality that is broad enough to satisfy many users. We rank Oracle E-Business Suite as positive (for the mining and petroleum sectors), with the proviso that customers with advanced functional needs should validate their work processes against Oracle functionality, and that the current level of industry experience means fewer experienced resources and partnerships within these sectors than some competitors. Oracle's current portfolio of solutions that can be grafted onto E-Business Suite via Fusion middleware offers significant potential. However, customers must realize that the user interface and functionality could be altered during the transition to Fusion applications.

Rating: Positive (applicable to mining and to oil and gas)

JD Edwards EnterpriseOne is marketed across the globe, benefiting from the reach of Oracle resources. The product already has a wide customer base in industries such as mining and petrochemicals. The overall solution includes both EAM and real estate functionality, making it an attractive option for international or large-scale companies with extensive facilities or real estate under management. JD Edwards EnterpriseOne is a functionally competitive product, and only the most-advanced maintenance users, or those focused on specific niche industry requirements, would need to use a best-of-breed alternative in conjunction with the JD Edwards EnterpriseOne ERP suite. However, its user interface design and technology platform are not as modern in appearance compared to other products on the market, and potential customers need to carefully consider the impact and timing of the Oracle Fusion product set. Customers must realize that the user interface and functionality will be altered during the transition to Fusion. Like Oracle's E-Business Suite, JD Edwards EnterpriseOne is supported by additional products Oracle has acquired, such as analytics from Siebel and logistics from G-Log. As a result, we rate JD Edwards EnterpriseOne as a positive for the petroleum and the mining sectors.

Rating: Positive (applicable to mining and to oil and gas)

SAP delivers consistently across the globe to the widest variety of asset-intensive industries, including mining and oil and gas, often via partnerships with other suppliers. These partnerships are being formalized through the NetWeaver partner program. Early examples include Meridium (RCMO) and NRX (VIP). We still hear reports from individual customers about the high cost and long time of deployment, and while this is highly variable depending on many factors, we hear this regularly in our conversations with SAP customers. One caveat is that the strongest functionality from a maintenance perspective is in the "discrete industry/mill products" (DIMP) versions, which are currently not compatible with SAP for Oil & Gas or SAP for Mining due to the underlying SAP switch framework. While some of the DIMP functionality has already been delivered with Enhancement Pack 2 (that is, Maintenance Event Builder, Hierarchical Task Lists and the Logbook), users should validate that all functional requirements are available in the version they implement. Considering its support for all functional areas, including logistics, HR and finance in petroleum and mining, we rate SAP a strong positive for both sectors. Users need to understand what is ERP 6.0 functionality versus additional cost xApp functionality (such as xRCMO or xMII) and third-party functionality, such as that provided by industry value network partners such as Meridium, Citect or OSIsoft.

Rating: Strong Positive (applicable to mining and to oil and gas)