Asset managers in the energy sector and other industries can see it: the decade ahead will be filled with even more complex challenges. The world is unpredictable, with new regulations, shifting populations and consumption patterns, climate change, and who knows what other kinds of turmoil. We need to be ready for anything.
So it is no wonder that many organizations are turning to state-of-the-art asset investment planning (AIP) software to help them manage the complex decisions on the horizon, with the market for AIP systems projected to significantly grow over the next five years. But is AIP software the right choice for managing your organization’s large asset base? And why choose it over your tried-and-true collection of customized spreadsheets?
This article explores what capital planning looks like today, highlights the need to shift to more proactive, data-driven, strategic decision making, and explores how state-of-the-art AIP software leapfrogs spreadsheets to break the cycle of reactive planning.
Today, most asset managers face a few common challenges. The details will vary from organization to organization, but most managers will nod along when they hear their peers complain that they’re struggling with endless meetings conducted simply for data collection, limited analytics, and the limitations of Excel’s computing capabilities.
Today, asset managers in the energy sector and beyond have to slog through meetings peppered throughout their yearly planning cycles to get all the numbers they need to work with. All the while contending with different teams fighting over limited budgetary figures and directors making wild estimates of their future capital expenditures.
Organizations function this way usually because they can’t see a better alternative. They have limited performance data to draw from previous budget cycles for financial forecasting, as too many metrics are measured manually.
When data is an afterthought, analytics is impossible. Reactive organizations only use data for reporting, to show compliance, or to demonstrate they’re meeting baseline standards. Data isn’t treated as an avenue for improvement.
Excel spreadsheets are excellent for crunching numbers. There is a reason so many organizations across sectors rely on this versatile, universal tool. But Excel’s primary strength is also its weakness: it is so universal that it becomes generic.
It’s designed for everyone, from small mom-and-pop stores to accountants at multinational enterprises. It has no specialist asset management capabilities and was never intended to scale to hold the datasets many asset managers must work with.
Relying on Excel for optimized asset investment planning is one of the main reasons organizations become stuck in a reactive mindset. They need to break the cycle of reactive capital planning processes and shift to a proactive, strategic mindset. Asset managers need a framework for better strategic decision making.
Excel may be a versatile business computing tool, but organizations that want to manage assets strategically and proactively need to consider how Excel stacks up against cloud-based, optimized asset investment planning software.
Let’s consider Excel versus AIP software across several dimensions.
Your organization needs all its teams pulling in the same direction and working from the same single source of truth (SSoT)—the one standardized dataset you can trust to be definitive. If you don’t structure operations and planning around an SSoT, your business data can quickly drift into different organizational silos, getting disconnected and limiting decision making.
Tracking file ownership is one of the greatest challenges of relying on XLSX files for asset investment planning. You never have just one spreadsheet. It is always ten different people updating their fifteen different local copies. Collaborating with spreadsheets becomes unnecessarily complex and does not scale well.
Cloud-based AIP software is structured so you only have a single source of truth. Only ever one definitive data set. For example, if you want to check the maintenance history of a transformer at site 42, you know the data in the AIP software is current. There’s no local spreadsheet at the satellite office that a technician forgot to upload to a file server.
Analytics doesn’t mean simply data gathering. It is the cornerstone of data-driven decision making. Analytics is the systematized analysis of comprehensive digital datasets.
Predictive modeling and scenario planning are two essential asset management functions that are hard to carry out when you rely only on Excel. Excel may help you manipulate datasets, but it has limited capabilities in supporting decision making.
This goes back to it being a universal tool. Data scientists have different needs than finance, engineering, risk management, or C-Suite.
It is not a purpose-built analytical tool. It does not include native functions for filtering or calculating asset life cycles. It is limited to the expertise of the person that built it.
Optimized asset investment planning software allows for robust scenario and predictive ‘what-if’ analysis. State-of-the-art systems include powerful, built-in analytics and machine learning capabilities.
Utilities and other large-scale organizations are dynamic and constantly changing. That means you need up-to-date data for better decision making.
Excel files only offer a static view of assets and their current condition. Scripts can run new imports, but that is dependent on many different sets of code working together correctly.
AIP software can offer you a live, evolving view of your assets. It can easily and natively pull data from integrated asset performance management (APM) software as well as data from Internet of Things (IoT) sensors on-site with your remote assets.
Planning cycles may be long, but due to the fast-paced nature of most organizations, asset-related decisions often need to be made quickly. Therefore, efficient analysis and response are essential.
Manual entry and analysis in Excel are both time-consuming and resource intensive. Asset managers will still need many meetings, emails, and video calls to get the information they need to make sound decisions.
By virtue of being a live, constantly updating SSoT, asset managers have much more ready access to all the information they need in modern AIP software, like Direxyon. It offers a holistic view across departments, assets, and teams.
In many industries, especially energy, your asset integrity is only as good as what you can prove to regulators.
As it is not purpose-built, Excel offers limited auditability for compliance. As a result, more of the onus is on the asset manager to get everything right.
Because it is cloud-based and structured as a single source of truth, it is much easier to show regulators current, accurate, and up-to-date records in Direxyon.
In addition to Federal and municipal regulations, many organizations need to follow industry standards for asset management, like ISO 55000.
Relying on a dozen non-standardized spreadsheets does not support good, repeatable processes and decision making.
Direxyon allows you to build standard workflows from deep but consistent datasets all in one SSoT platform.
Energy generation businesses are embedded in complex ecosystems of technology, policies, regulations, and personnel. Those that want to thrive in the coming decade are leaning hard into digital transformation—integrating technology into more and more of their processes.
Spreadsheets were never intended to function as databases. They can store simple data but are nowhere near robust enough for central management and data retention. In addition, Excel lacks data synchronization and integration tools to allow you to manage multiple systems and data sets effectively.
AIP software like Direxyon is designed from the ground up to be a central integration point for your APM, ERP, and other business systems, so you can keep all your far-flung business teams on the same page and working smoothly.
Want to learn more about how optimized asset investment planning software can help you pivot to more proactive decision making? Download our e-book, The Benefits of Asset Investment Planning (AIP).