EAM vs ERP: 5 Key Differences (and How They Can Join Forces)

In this guide, we’re going to look at the distinctions between ERP and EAM. We’ll also look at why you need these platforms in your business and how the two can work effectively together.

What is EAM?

Let’s start by looking at Enterprise Asset Management (EAM). This is a software tool that’s used primarily to manage, organize and store information about an organization’s assets. 

As the key role of these tools is to organize maintenance-related tasks and manage the lifecycle of assets, they’re most commonly used in organizations and industries that require larger numbers of physical assets to operate.

These modern EAM systems are widely regarded as being an improvement upon older computerized maintenance management systems (CMMS).

The key benefits of EAM

There are a number of reasons why an organization might invest in Enterprise Asset Management systems.

One of the biggest benefits of this type of software is the ability to optimize and streamline workflows. This also allows for the collection and analysis of data to help you manage your company’s assets more effectively.

Some of the other key benefits include:

• Tracking real-time asset performance
• Increasing operational efficiency
• Centralizing data and critical information
• Allowing for in-depth cost analysis and determining the value of business assets
• Improving asset reliability
• Improving collaboration and communication between teams

Learn more: Key Details and Questions when Choosing an EAM System

What is ERP?

Now let’s take a look at Enterprise Resource Planning (ERP). This is a software tool that organizations use to plan and manage all activities within the business.

ERP allows businesses to automate and oversee the day-to-day operations and can help to eliminate the need for a lot of time-consuming manual work.

This software is typically applied to data-heavy business functions, particularly to those that once required a lot of manual input. For example, these tools are often applied to accounting, sales, customer service, HR, manufacturing and supply chain management.

Learn more: Enterprise Resource Planning: Expectations vs. Reality

The key benefits of ERP

One of the most obvious benefits of using Enterprise Resource Planning software is the ability to automate manual tasks, improve efficiency and save time. This can help to streamline workflows and boost productivity.

Some of the other key benefits include:

• Centralizing data to improve operational visibility and the customer experience
• Offering enhanced business reporting
• Improving on-time to delivery
• Cutting costs and boosting cash flow
• Ensuring better data and cloud security
• Offering transparency through the supply chain and reducing bottlenecks

ERP vs EAM: 5 key differences

Hopefully, as we’ve begun to dig a little deeper into what ERP and EAM are, you can already spot some of the key differences. However, to ensure you fully understand the roles that these systems play, here are five key differences between them:

1. ERP is activities over assets

First and foremost, ERP has been designed to focus on all operational tasks within an organization. These platforms are generally created to help manage financial, sales, manufacturing, HR, and production processes.

On the other hand, EAM only focuses on an organization’s physical assets. This software is designed to help maintain these assets and to increase their efficiency, streamline orders, plan repairs and gather information regarding assets only.

2. EAM will inform decisions about important assets

Although both tools are good for large-scale organizations, ERP is better for those that want to manage all their business operations from one place. EAM, on the other hand, is ideal for businesses that are heavily dependent on assets such as machines, components and equipment.

This is because ERP can’t inform decisions regarding assets, and it can’t increase the lifespan of important organizational assets. It’s unable to schedule or perform preventative maintenance, whereas EAM can do all of the above.

3. ERP can manage vital business functions

ERP software will help to automate and manage aspects like accounting, data entry and administrative tasks, but ERP doesn’t. The only data gathered by ERP software is related to physical assets, but it doesn’t manage any of the aforementioned business functions.

4. ERP is more complex

Because ERP is taking on so many big business functions, this software is more complex than EAM and, therefore, more difficult to use. Not only this, but because EAM focuses only on assets, it’s easier to implement.

As ERP software must manage multiple tasks and functions, it can also be more challenging to implement across the business.

5. EAM can save you money

Although ERP software can help to streamline systems, free up employee time and reduce the risk of an error, it doesn’t immediately save an organization money. Over time, all of these things might contribute to saving money and cutting costs, but it doesn’t have a direct and immediate impact on the bottom line.

However, as EAM schedules maintenance and ensures assets are being properly cared for, this can prolong the lifecycle of vital machines and equipment and save money on replacements right away.

How EAM and ERP can work together

Though EAM and ERP serve different purposes within an organization, this doesn’t mean the two can’t work in harmony.

There are two options when it comes to facilitating EAM and ERP working together. Firstly you could use two separate platforms. Alternatively, you can integrate the two and choose an ERP software with a specialized EAM application. 

By integrating the two, organizations can put asset management capabilities to better use, and this can help them to improve the bottom line. Some other important ways these two systems can work together include: 

• Better financial insights: With EAM and ERP working together, organizations can gather data and information about how asset management impacts your financials
• Avoid duplicate tasks: The systems can work together to streamline the asset management process and ensure that there are no duplicate tasks or mishandled information
• Make your assets more profitable: EAM makes it possible to manage assets, while ERP helps with controlling the financials. Over time, this can help you to maximize the return on your assets (ROA)
• Automate EAM processes: As we’ve mentioned, ERP allows you to automate important processes and this includes tasks that will extend the longevity of your assets

Final thoughts

Hopefully, this guide has given you a deeper understanding of both Enterprise Asset Management (EAM) and Enterprise Resource Planning (ERP) and how these softwares can be used within your organization.

It’s easy to see how both of these systems can play an important role, be that for managing assets or automating important business functions. However, the most important thing to take away is that these two softwares can work together and even be integrated to better support your business and its bottom line.

Further reading:

• How to Make ERP Work for Your Business
• Don't Let Your Assets Waste Away - Here's How to Optimize Them
• How to Create an Agile Asset Management Strategy
• Four Key Trends Reshaping Wealth & Asset Management