The Integrated Workplace Management Systems (IWMS) market and the Enterprise Asset Management (EAM) market have changed significantly over the past two years. The IWMS market has experienced rapid growth and continues to grow at 10 percent a year, according to research firm Gartner. The EAM market landscape has had a facelift; virtually every EAM vendor has been acquired in the past two years, but none of them have been consolidated, so there are still just as many as before. In addition, these two areas have grown somewhat closer together, as more assets are becoming IT-enabled.

The IWMS market focuses on enterprise-level software applications that integrate four key areas: project management, real estate portfolio and lease management, space management, and maintenance management. The software typically operates from a single database and offers workflow tools, executive dashboards, and pre-defined and customized reporting capabilities for multiple sites. Most of these applications can interoperate with other enterprise applications, such as ERP, supply chain management and human capital management via Web service technologies.

EAM offerings, a subset of ERP systems, evolved from computerized maintenance management systems (CMMS) and primarily center around materials and maintenance management functionality. These offerings tend to be simpler in scope than traditional CMMS offerings and focus on single-site deployments. Functionality also focuses on planning and execution.

“IWMS is covering things like real estate, space utilization, leasing, rental, and some areas of facilities management,” explains Kristian Steenstrup, distinguished analyst for Gartner. “[It deals with] some basic functionalities around fixing things that are broken. EAM wouldn’t be doing space utilization, real estate and lease management; EAM is interested in where things break down.”

A Look at IWMS

IWMS has been gaining the attention of senior management, thanks to the complexity of its installations and opportunities for return on investment. The market size is beginning to approach $400 million to $500 million in annual spend in both license and service revenues, according to Michael Bell, research vice president for Gartner. Deal sizes have increased significantly, he adds—many to well above $1 million. The market has also experienced some consolidation, such as Manhattan Software’s recent acquisition of CenterStone, and some newcomers to the U.S. market, including Planon and Fraser Williams.

The growth in the IWMS market can be attributed to a number of factors. Sarbanes-Oxley compliance brings with it the need for transparency and auditability of capital accounts. Proper disaster recovery requires knowledge of where people sit, where assets are, and business continuity planning. The need for a more comprehensive and integrated solution has resulted in a movement away from departmentalization. Standardization and globalization are also driving IWMS growth.

Other important developments here include a migration to Web 2.0, a pure Web-based architecture, and the growth of process management workflow. “Vendors have recognized that they have to make the installation and configuration of these products much less complex and less expensive,” Bell notes.

Each day of not implementing an IWMS can cost an average-size company approximately $25,000, according to Mike Daffer, chief marketing officer for TRIRIGA, one of the big players in this space (see Table 1). TRIRIGA’s offerings focus on addressing poor space utilization, maintenance and repair costs, and unplanned project costs. “If you look at the market,” Daffer says, “companies are underutilizing space by 40 percent. Maintenance and repair represent 12 percent of that cost. Facility downtime is significant.”

In addition, he continues, 50 percent of projects finish over budget and 50 percent finish behind schedule. “The IWMS market is addressing these challenges, and that’s why everybody’s paying so much attention to it.”

IWMS offers visualization into workflow, which gives organizations the ability to rely on real-time, accurate data and thus make better decisions regarding real estate portfolios. That’s one of the key reasons organizations implement these systems, according to Nick Moore, president of Manhattan Software. That’s also one thing pharmaceutical company Johnson & Johnson is moving toward in its IWMS.

Toward Real-Time Integration

Johnson & Johnson’s Alza Division, which focuses on medical devices, consumers, and research and development, has been using e-Center One from Manhattan Software (as a result of its acquisition of CenterStone), for the past four years. Once the company migrated from its homegrown system to e-Center One, it was able to pull IT, human resources, telecom, the facilities planning department, and security into a single, integrated database.

Now when a new request is sent in the company, “all of it’s embedded in the workflow,” points out Velvet Milner, a systems integration specialist in the IT department at press time. (Milner was in the process of transitioning out of Johnson & Johnson to Move It!, a consulting firm that aids in assessing workflow management in organizations and helping them become more efficient.)

Johnson & Johnson was challenged with IT, extended e-mail accounts, computers and laptops not in use, telephones sitting in empty cubicles, and the like. Using e-Center One “has allowed us to become much more efficient and effective at what we do,” Milner notes. As a result, she adds, the company was able to reduce the time it takes a new occupant to get accommodated with a computer and office in half—from seven to 10 days to a matter of three to five days.

Johnson & Johnson’s biggest challenge in implementing its IWMS was getting everyone on the same page. “Facilities as a whole really didn’t work with any of those groups,” Milner explains, referring to IT, human resources, telecom, and security. Having implemented the system, however, Milner wouldn’t go back. She likes “having one authoritative database—a one-stop shop—to meet everyone’s needs.”

People are just beginning to understand and embrace the fact that an IWMS can talk with other systems without customization. Milner believes that an IWMS would help greatly in CMMS with maintenance-related issues or IT programs. She wants “something that can have tentacles out into all systems.”

A Look at EAM

This brings us back to EAM, which again is an extension of CMMS, as well as a subset of ERP. A rivalry continues between EAM (point solutions) and ERP suites such as Oracle and SAP. These offer EAM functionality, “but they speak to a captive audience, whereas point solutions are looking for anybody and everybody who would use asset management,” Gartner’s Steenstrup notes.

“EAM products have been evolving over the past few years to where we’re seeing more Web-enabled Java-based products. In addition, more money is being spent and more attention is being paid to advance the technology,” Steenstrup asserts.

End-user organizations are just beginning to realize the benefits of asset management. Says Steenstrup, “People are still discovering asset management as a better way of looking after a physical plant and equipment.”

The landscape of this market has changed drastically in the past two years and goes completely against conventional wisdom, which says that as markets mature, we should see fewer vendors as a result of acquisitions of peers. Interestingly, however, the acquisitions that have taken place in the recent past were not by peers. Rather, the companies were acquired for additional functionality.

Infor, for example, bought Datastream because it was lacking asset management functionality. Vista Equity Partners, an investment company, bought Indus. Francisco Partners made an offer to buy Mincom. Probably the most significant change here, however, is IBM’s purchase of MRO Software, the leading EAM vendor (see Table 2). IBM was lacking asset management in its offerings, but has a vision to drive synergies between enterprise assets and IT asset management.

Convergence on the Horizon?

This is the deal that everyone is talking about. Why? Because it marks a big crossover into new territory. With the acquisition of MRO Software, IBM is positioned to manage both IT assets and physical assets, something that has not yet been done. There is no IWMS vendor who could really carry a full load in EAM, or vice versa, Steenstrup points out. However, IT asset management presents a nice intersection point, and the only common denominator currently is the Maximo product IBM acquired from MRO.

The reality is that the integration of MRO’s EAM with IBM Tivoli could provide a single solution to manage all assets—operational as well as IT.

This seems to be a natural progression, as more and more physical assets are becoming IT-enabled. When a utility purchases a generating plant, for example, it comes with onboard operating systems, databases, IP addresses, and so on. As physical assets become more IT-enabled, Steenstrup notes, a six-month service check will look more like changing fuels, oils, and in addition upgrading the software. “The world is going to become a lot more interesting in the next few years as physical assets become more IT-enabled,” he predicts.

While these two markets are on the road to convergence, it won’t happen overnight or without overcoming a number of obstacles. Because some assets have incredibly long lives, anywhere from 10 to 30 years, it could be a long time before they’re replaced. The coal mining industry, for instance, is still using equipment that’s 30 years old, according to Steenstrup.

Newer equipment being shipped by Caterpillar, on the other hand, has Oracle databases on board. Some of the new trains have extensive IT capabilities as well.

There is an increased need to bring process control information into business-oriented systems. A Gartner report titled “IT-Enabled Business Assets Present Challenges and Opportunities for Manufacturing CIOs” observes, “Operational systems are being interconnected across networks more frequently with information systems to address manufacturers’ increased focus on agility and the consequent trend of creating integrated environments that support end-to-end business processes.”

Both the software platforms and communication standards are similar. Gartner’s Bell points out that a lot of features needed to manage other assets, such as depreciation and maintenance, are also needed in IT asset management. Autodiscovery is another one. In IT asset management, which is specifically focused on the management of IT assets and is a subset of software asset management, “autodiscovery can do a physical inventory of everything on a network,” Bell says. However, “it can’t do that in IWMS yet.” Still, many features are similar.

Those similarities have evolved as a result of the staffing and management of those technologies. IT, according to Gartner’s report, “has been the realm of back-office systems developed and supported by computer science graduates who have deployed business support systems.” Operational technologies, on the other hand, “has been the realm of the control and monitoring systems developed and supported by process control and electrical engineers who have focused on maintaining integrity and controlling performance of manufacturing or production assets.”

To Converge or Not to Converge

The two areas present two different sets of needs and two different buying constituencies. So the question becomes: Should the two worlds combine, or should they remain separate? Many CIOs believe it’s best to keep IT and operational technologies running on separate networks. To combine the two worlds could lead to significant security issues. To address these challenges, standards and architecture plans on the operational technologies side need to be put into place. A consensus is needed as to how operational systems will be governed.

Although hurdles need to be cleared, the two worlds are converging. EAM and IWMS are much closer today than they were two years ago. Bell believes that from a software support standpoint, IT and real estate facilities will converge over the next few years. In fact, he’s been predicting this convergence for years. “I suspect it’s going to happen before the end of the decade,” he forecasts.

Johnson & Johnson’s Milner is eager for the convergence to take place. “Maintenance and planning work hand-in-hand together,” she says. “If a system is upgraded with finance’s ERP system,” for example, “we’re updated when they’re updated. So now everyone’s in sync; we’re all integrated with real-time data.”

Milner looks forward to one day having a high-level, executive dashboard that anyone in executive management can look at and know, pretty much in real time, what and how things are occurring. She wants to expand her current system so that CMMS and IWMS talk and automatically update. That is a realistic goal.

Bell points to Primavera Systems as an example of this reality, because it is very strong in both the IT asset management world and in the facilities world. “My speculation,” he adds, “is that as we infuse IT everywhere in the workplace, we’re having a much more integrated and holistic view of management of all those assets.”