WHITE PAPER

Next-Generation Asset Performance Management for

Asset Management and Production Operations Optimization
Sponsored by: Meridium
Christine Dover
August 2015

IDC OPINION
With the expansion of intelligent, connected assets for mission-critical operations, we are witnessing
the convergence of information technology (IT) and operational technology (OT). The ability to control
operational devices over the Internet brings with it an imperative to apply the "3rd Platform" capabilities
of Big Data and analytics, cloud, mobile, and social to asset performance management (APM) and
operations optimization systems. IDC research shows that product innovation and asset and
operations optimization are leading the way as drivers for 3rd Platform initiatives. Examples range
from measuring asset performance to analyzing the financial and environmental risk of optimized
maintenance schedules. To take advantage of these opportunities, organizations need a 3rd Platform
software solution for asset performance management. Such a solution must provide:

Asset centricity for connected networks of assets, processes, and people: Asset-centric networks
offer the ability to collect network-based information from the viewpoint of any node, application,
or asset on the network that can be used by processes and people to make decisions.

Intelligent asset strategies and benefits: The application must be specialized to enable the
building and running of asset performance management applications that analyze data both
vertically and horizontally, including from intelligently controlled networked production assets.

Industry-specific solutions for asset-intensive enterprises: The solution must consider the
unique industry requirements for asset-centric companies in oil and gas, chemicals, power and
utilities, metals and mining, and transportation.

Advanced predictive analytics for executives, managers, and practitioners: The system must
provide predictive and comparative analytics to support the business decisions of diverse
organizational roles.

Intuitive user experience: Executives, managers, and practitioners need an intuitive, engaging, and
mobile-first user experience for near-real-time intelligence on asset risk, strategy, and performance.

Secure deployment on-premises, in the cloud, or hybrid: Asset performance management

solutions must be capable of development and configuration in a manner accessible to
developers familiar with standard programming interfaces for deployment in a secure
environment: on-premises, in the cloud, or hybrid.

Meridium's next-generation Enterprise Asset Performance Management (APM) solution is a software

platform for increasing productivity, mitigating risk, and optimizing the cost of managing an assetintensive business at the intersection of people, strategic assets, and the 3rd Platform. Meridium
Enterprise APM is designed to optimize asset management and production operations through an
intelligent asset strategy.

August 2015, IDC #257973

IN THIS WHITE PAPER

An asset performance management platform is a specialization of what IDC calls the 3rd Platform built
for the new generation of enterprise and facility IT and OT systems that incorporate Big Data and
analytics, cloud deployment, mobile-centric user interfaces, and social business strategies that
connect assets to processes and people. The focus will be applications for asset performance
management and operations optimization such as addressing regulatory pressures, mitigating risk,
and protecting brand and reputation across the range of asset-intensive industries. Meridium is
delivering the Enterprise APM solution to address these needs.

SITUATION OVERVIEW
Figure 1 illustrates the forces coming together to launch a new generation of innovative, intelligent
applications: leveraging Big Data and analytics, securely deployable, mobile centric, and processing
signals from billions of things (connected over the Internet) to enable high-value decisions.
IDC believes that 7580% of these intelligent industry solutions will be data intensive. Sensor data from
connected assets is enabling real-time monitoring and problem detection for improved operations and
asset performance. This goes beyond what traditional systems such as customer service,
procurement, general ledger, and enterprise asset management (EAM) can deliver. Instead, new
methods of integration and intelligence are required to assess the risk of asset failure, diagnose
underperforming assets, and evaluate the performance of assets to alleviate and mitigate risks with an
intelligent asset strategy to optimize asset availability at the lowest risk and most optimized cost. The
ability to build and deploy these applications requires a specialization of the 3rd Platform for
operational technology built to meet the demanding data, processing, and user interface requirements
in the context of what is being called "asset-centric networks."

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FIGURE 1
3rd Platform: Enabling Intelligent Industry Solutions

Source: IDC, 2015

Business Context: Asset-Centric Networks

Asset-centric networks offer the ability to collect network-based information from the viewpoint of any
node, application, or asset on the network that can be used to make decisions. First, senior
management is looking for ways to optimize costs and resources, run "lean," maintain production
output, protect earnings, address regulatory pressures, mitigate and reduce risk, protect the
company's brand and reputation, and manage budgets. A fully integrated enterprise asset
performance management (EAPM) solution can now deliver and provide the structure to consolidate
all asset-related data and to transform data into information that becomes knowledge and wisdom
through an intelligent asset strategy to provide timely and accurate client asset management
decisions. In addition, asset-centric networks provide opportunities to increase process safety and
regulatory compliance, as well as improve environmental risk management, while addressing the
reality of the changing workforce.
For example, in the past few years, many managers in asset-intensive industries have chosen to
spend resources on their supply chain or customer service processes, enabling them to provide faster
customer response times. However, is this the most efficient use of company resources? In interviews

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with users in asset-intensive companies, it appears that opportunities for process improvement in
supply chain and customer service may have been exhausted in the past few years and that improving
production, managing risk, and optimizing cost through 3rd Platform asset performance management
applications offer far greater returns to the business.
An intelligent asset strategy can identify and quantify unmitigated risk by asset and provide executives,
managers, and practitioners with strategic and tactical alternatives to mitigate risk through asset
management actions and the corresponding costs for company decisions. For example, companies
may choose to perform proactive maintenance or defer maintenance based on quantified probabilities
of in-service failures and the associated outcomes in terms of resulting cost and lost productivity and
income. Consider the following four risk categories:

Safety: Can operations procedures and maintenance processes be optimized to improve

worker and facility safety while keeping the facility running?

Environment: What is the environmental and community risk in the case of a system failure or
shutdown?

Operations: Will an asset fail? When will it fail? What are the impacts from performing work
to proactively or reactively responding? How does asset failure impact client commitments?

Financial: What are the economic impacts of proactive versus deferred maintenance? What
are the activities that can be scheduled during off-hours?

The opportunity for increasing return on assets through productivity improvements, risk mitigation, and
optimized cost is considerable as companies that implement asset performance management
solutions frequently report cost savings such as reducing lost production time, mitigating or eliminating
asset failures, and saving on repairs resulting from a single outage versus multiple outages.
Companies are also able to identify assets responsible for problems, determine and implement
corrective actions, and eliminate many future issues. The real potential is for revenue and profit
improvement through increased asset availability and the cost savings associated with coordinated
proactive and planned operations and maintenance tasks.

Example: Enterprise Asset Performance Management Savings

A gas company operates a multibillion-dollar facility that converts coal into natural gas and chemicals.
Like many other organizations, the company needed to consolidate databases, spreadsheets, and
equipment files in order to understand its asset reliability and present actionable information for
management to make decisions. The company also needed to integrate EAM work order history and
track production losses against specific assets. After the company integrated EAM work order history,
it became evident that fixed equipment was where the company needed to concentrate risk-based
inspection efforts. By managing tasks within an APM system, the company was able to keep its EAM
system current and accurate concerning scheduled inspections. Management of change and
production losses tied to specific assets, work history, corrosion analysis, asset criticality, and
equipment saving were tracked in the APM system.
The company compared risk results to ensure that calculations were consistent with expectations.
Data integrity was a key issue as operators are required to identify the method of failure detection, why
the work order was written and its significance, and what caused the failure or its likely causes as well
as provide their recommendations and closing comments. Implementing risk-based inspections
optimized turnaround scope and interval extension and saved personnel-hours in managing and
analyzing large amounts of data regarding inspections, scheduling, and overall planning.

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Analytics for Connected Decisions Across Executive, Management, and

Practitioner Roles
Enterprise APM systems provide a platform for sharing integrated information across three roles to
maximize return on assets. Senior executives must look broadly at long-term return on investment (ROI),
business sustainability, and intelligent asset strategy, particularly decisions that can impact corporate
and brand reputation and may avert negative publicity. Senior executives also need to consider
operational excellence and continuous improvement across the entire organization. Managers often take
a short- to medium-term approach to optimize the costs of assets and operations across a facility. This
includes asset availability, prioritization of capital-intensive projects and operating budgets, establishment
of risk mitigation policies, and managing regulatory compliance and safety programs. Practitioners on the
frontline are primarily concerned with immediate equipment needs that may result in an unplanned loss
of production. They are concerned with optimizing maintenance costs and the reliability of their assets,
the need to maximize employee and community safety, and the need to elevate employee knowledge.
Let's consider how performance-driven decisions and the people responsible for them play out in a
chemical scenario:

Strategy (senior executives): An incident in a chemical plant located near an urban

environment can result in a public relations nightmare for a chemical company. In today's
online society, citizens are quick to make their dissatisfaction known publicly through social
media. Senior executives are responsible for safeguarding the company reputation while also
ensuring accountability and responsibility for people, the environment, and the financial results
that provide for long-term business sustainability.

Performance (facility management): An incident in a chemical plant can impact worker safety,
damage equipment, cause environmental hazards, and be expensive to resolve. Taking a plant
out of operation to repair the damage can mean incurring increased customer service costs to
respond to customer and community complaints, lost revenue as production is interrupted, and
out-of-pocket costs to compensate for repair crews' travel and labor. An APM solution improves
planning by balancing plant equipment risk profiles, delivery goals, and resource investments by
focusing capital expenses (CAPEX) and operating expenses (OPEX), along with maintenance
and inventory costs, on the most critical and high-risk assets.

Risk (frontline practitioners): For chemical plants, frontline practitioners are focused on the
immediate equipment and avoiding unplanned outages. Reliable performance is a highly
visible metric inside the company, to its competitors, and to the general public who live in the
community. Frontline practitioners need to anticipate, find, and fix problems by providing
operational visibility and analysis that proactively reduce equipment failures, control costs, and
increase availability and reliability. They must also use a comprehensive method to ensure
compliance with government, industry, and company regulations and increase safety by
examining mechanical integrity and eliminating opportunities for failure on aging, sometimes
outdated, assets.

The APM solution needs to support each role (executive, management, and practitioner) by bringing
together data from disparate systems into the APM solution for evaluation and analysis (see Figure 2):

Enterprise resource planning (ERP) systems and manufacturing execution systems (MESs): ERP
systems manage the business of the organization, including financials and general ledger, human
resources, and procurement of materials and supplies. MES applications manage resource and
production schedules, track and trace materials, and manage shutdown turnarounds.

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Enterprise asset management and computerized maintenance management (CMM) systems:

EAM and CMM systems track information about the assets and any work performed on them
(e.g., work orders for inspections and asset repair cost and information; asset data such as
purchase date, warranty information, and expected lifetime; and safety information such as
permits and documentation).

Asset performance management: APM systems work with the ERP, EAM, and CMM systems
and above the condition monitoring (CM), control/process historian, and engineering and
design systems. APM systems integrate all superior and subordinate systems to consolidate
all data to create information and turn that information into enterprise knowledge for asset
financial and risk optimization through an intelligent asset strategy (IAS). This functionality is
not provided by the ERP, EAM, and CMM systems.

Condition monitoring: These systems provide asset diagnostics, online monitoring, and
anomaly detection.

Control system/process historian: This system, in addition to controlling operations, provides a

history of activities, including process control, alarms, and events, as well as operating envelope
definition, and online monitoring.

Engineering and design: These systems provide engineering data, 3D modeling, tag masters,
regulatory documents and drawings, and change management history.

In addition, unstructured data may be found in email, social workstreams, and productivity tools such
as presentations, spreadsheets, and reports.

FIGURE 2
APM in the Asset Management Landscape

Transaction View
Strategy View
Trend View

Enterprise Asset Management (EAM/ERP)

SAP IBM Oracle
Asset Performance Management (APM)
Meridium Point Solutions
Condition Monitoring & Process Historians
SKF Rockwell GE Emerson OSI

Control View

Control Systems
Honeywell Emerson Rockwell GE Siemens

Picture View

Engineering & Design

Intergraph Aveva

Regulation View

Government regulation & Classification Societies

EPA DOT OSHA EU ABS DNV GL BV

Source: Meridium, 2015

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An APM solution must bring together all of these capabilities in support of the executive, manager, and
practitioner roles and connect decisions from risk and strategy to performance. Historically, it has been
a challenge to develop an APM solution that could simply, easily, and quickly access all of these
separate data inputs from disparate systems to provide insight into risk, performance, and strategy.
IDC believes that the future is platform convergence bringing together all of these asset performance
management capabilities into a unified platform. Figure 3 illustrates this anticipated convergence in support
of asset performance management applications (whether about money, processes, people, or things).

FIGURE 3
Intelligent Asset Strategy

{ Intelligent Asset Strategy }

Assets &
Sensors

Define &
Evaluate
Asset Strategy

Systems
Engineering
HSEQ
ERP
Maintenance
Operations

Continuous Loop
of Improvement

People &
Process

Deploy Intelligent
Strategies

Unnecessary
Recommendations

Source: Meridium, 2015

Technology Context: 3rd Platform for Asset and Operations Optimization

The 3rd Platform enables new applications for growth and innovation built on the technology pillars of
Big Data and analytics, cloud services, mobile computing, and social networking/connected assets.
Adoption is being driven by business requirements for analytics to anticipate issues and prioritize
decisions for resolution, mobile access by a distributed workforce, and enhanced collaboration for
innovative social business processes made available for cloud-agnostic deployment to mitigate
implementation complexity and risk.
APM solutions require a specialization of the 3rd Platform, taking account of unique asset intelligence,
industry-specific requirements, analytics, user experience, and secure deployment requirements and
real-time (or near-real-time) decision making using deterministic asset-to-asset networking.

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Asset Intelligence Requirements

The solution must be specialized to enable the building and running of APM applications that analyze
data from intelligently controlled networked production assets. Traditionally, intelligent assets were
implemented via embedded proprietary software requiring specialized developer skills and often
incorporating point solutions that were neither integrated nor comprehensive. Modern APM solutions
should be built using standard application programming interfaces that apply across assets and
applications, masking the unique characteristics of each of the diverse assets or applications that
participate in the execution of the operations process.

Industry-Specific Requirements
Consider the unique industry requirements for asset-centric companies. While there are diverse
requirements specific to each industry, including regulatory and compliance mandates, there is also
much that can be learned from and shared across industries as well as benefit from the 3rd Platform
capabilities of Big Data and analytics, cloud and anywhere access to data, mobile access from any
device, and social connectivity between assets, people, and processes. Specifically:

Oil and gas: Intensified global competition, environmental incidents, geopolitical concerns, and
an evolving landscape of demand for fuel combine to make meticulously managing bottom-line
costs critical to business success and/or survival. An aging infrastructure coupled with an
inexperienced/aging workforce adds increased risk to bottom-line performance. Big Data and
analytics can provide intelligence on people, process, and planet safety while managing risk to
production and environment. Workers at remote oil fields, along pipelines, and at refineries
can access asset performance data from their mobile device. Sensors on assets provide data
about operational disruptions and outages.

Chemicals: The chemical industry is continually challenged to improve operational excellence

and optimize process safety while ensuring high ROI and compliance with ever-changing
regulations. Big Data and analytics can provide operational visibility and analysis to
proactively reduce asset failures and increase production availability. Workers on the plant
floor need access to real-time asset performance intelligence from their mobile device.
Social business processes can share group knowledge across a workforce with a wide range
of experience.

Power and utilities: Power and utilities companies must continuously provide electricity,
natural gas, and water as demanded by their residential, commercial, industrial, and
government customers. Assets that produce, treat, and transmit power must be reliable,
available, and operate safely at the least risk and cost. Big Data and analytics can enable the
reduction of asset malfunction and unplanned downtime with better data on aging
infrastructures and information for capital replacement planning. Field workers need access to
electricity, gas, and water systems availability and asset intelligence from their mobile device.

Metals and mining: Mine management is challenging and often relies heavily on reliability
engineers and technicians to communicate the health of assets. Big Data and analytics can
collect massive amounts of data across property assets including the mine, smelter, and
refinery to create real-time dashboards with drill-down capabilities into specific assets and
offer insight for asset investment planning. Executives, managers, and practitioners need
access to this asset intelligence from wherever they are on the mine property from their mobile
device. Sensors on assets provide constant updates on performance and asset health.

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Transportation: Fleet organizations must continuously provide reliable and punctual service as
demanded by customers. Many of the fleet organization's assets and people are in motion
from one location to the next. Big Data and analytics can be leveraged to avoid incidents and
improve maintenance strategies that would otherwise jeopardize safety and on-time
performance. Mobile workers need access to asset intelligence from anywhere and any
device. Sensors on vehicles can provide constant updates on performance and schedules.

An APM solution must provide an industry-specific approach to optimize assets, ensure compliance,
and integrate with traditional data sources such as enterprise asset management applications and
subordinate control, condition monitoring, and historian systems.

Analytics Requirements
Consider the requirements to support analytics for executive, management, and practitioner roles and
the decisions for which they are responsible. To meet the business requirements of diverse
organizational roles, the application must support a range of analytical techniques (refer back to Figure 3)
from risk and strategy to performance as part of a reliability strategy:

Risk: Executives need information about the potential risk primarily financial and reputational
to the organization if the company makes decisions to defer maintenance. Executives need
a multidimensional view of the results to make trade-offs on future investments in assets.

Strategy: Managers look across a group of assets to do predictive forecasting and make
recommendations based upon risk-based methodologies such as reliability-centered
maintenance and failure modes and effects.

Performance: Practitioners make decisions based on the condition of assets. They are often
looking for signals (e.g., asset failures, missed schedules, sudden spikes in demand) that may
impact an operational or maintenance process or forecast a future change.

An APM solution must provide a range of analytical techniques from reporting what happened to
monitoring what is happening now and anticipating what is likely to happen based on the asset data
collected, as well as comparative analysis across assets, across an enterprise, against industry
averages, across time periods, and more.

User Experience Requirements

Consider initiating a program to transform people within your organization (and external stakeholders)
so that they change from gut-based to fact-based decision making. A key requirement is a human
interface that provides an intuitive user experience that engages people, providing visibility to
operations, management, and executives, and helps focus attention on the most impactful factors:

Any device: Consistent, synchronized information should be available and accessible from any
device, including all flavors of mobile and with access to any asset relevant for the operations
process and to all asset data, including drawings, manuals, and history. Wearable computers
using technologies such as smart glasses and watches can help support this goal in the
real-time environment.

Relevant in context: We are in a state of information overload. User interfaces such as health
indicators, which are early indicators of asset failure, help users focus on the information that is
most relevant to their role and the decisions they are responsible to make. Executives and
managers need dashboards that enable them to listen effectively to separate the signal from the
noise generated by the overwhelming amount of data being created by the company's assets.

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Descriptive or prescriptive: The interface should enable an individual to monitor the performance
of an asset (descriptive) and advise on the next best action (prescriptive) to correct or adjust an
asset or asset-intensive process. Executives and managers can navigate from the higher-level
view down to the individual asset/equipment/system that requires their attention.

An APM solution must provide a consistent, intuitive user experience, no matter the operations
process or asset that is being monitored or adjusted.

Secure Deployment Requirements

Asset performance management applications must be developed, deployed, configured, and extended
in a secure environment in the cloud, on-premises, or in a hybrid model for maximum flexibility.
Security at the user access, source, and data levels should be supported.

Applying the 3rd Platform for Asset Management and

Operations Optimization
Asset management and operational processes vary greatly by vertical. Asset management applies to
maximizing productivity, mitigating risk, and optimizing the cost of managing an asset-intensive
business at the intersection of people, strategic assets, and the 3rd Platform. Financial optimization
ensures that the organization is maximizing return on assets by increasing revenue and profit through
mitigating risk and optimizing cost. Operations optimization ensures process safety and regulatory
compliance and minimizes production downtime.
Example scenarios in several industries oil and gas, chemicals, power and utilities, metals and
mining, and transportation show that asset-intensive industries will benefit most from the application
of a 3rd Platform for asset management and operations optimization. Traditionally underserved by
corporate IT, operational technologists will look to the 3rd Platform to rapidly build and deploy analytic
applications for asset management and operations optimization. The 3rd Platform must link the
business functions responsible for asset maintenance, operations process monitoring, risk and failure
analysis, and optimized asset utilization and planning.

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Table 1 shows how several industries are prioritizing asset management and operational optimization
to achieve a high return on asset performance.

TABLE 1
Asset and Operations Optimization by Industry

Industry
Oil and gas

Real-Time
Operational
Optimization

Use Case
Description

Real-Time Asset
Management

A common platform
that provides
optimized
maintenance
schedules for global
assets to improve
uptime, ensure
regulatory
compliance, and
help safe
operations

Seamless
integration with
sensors and
devices to
consume and
continuously
monitor asset
performance
data and ensure
the health of
each asset
complies with
the applied
strategy

Surveillance tasks
become input by the
operations team for
operator rounds
development and are
used to create
maintenance plans
and operator rounds
that are optimized and
justified based on risk
mitigation policies and
regulatory
requirements

Benefits over Traditional Approach

Facilitates collaboration between
maintenance, engineering, and
operations to develop the optimal
asset strategy for critical assets
Asset strategies are based on
corporate-accepted key
performance indicators (KPIs)
and may be leveraged globally
Continuous optimization of
maintenance plans based on
current asset performance as
well as risk and cost factors
Common performance metrics
may be applied across industries
or globally

Chemicals

Treating all fixed

assets equally
can lead to
over-inspecting,
increased
maintenance costs,
and increased risk
levels

Implementing a
risk-based
inspection
program, first
identifying the
highest-risk
assets and key
damage
mechanisms and
setting inspection
frequencies
based on risk
levels

Improving mechanical
integrity because
subject matter experts
are required to
provide a detailed
review of potential
damage mechanisms
for each asset and
establishing integrity
operating windows
and safety integrity
levels

Enables continuous process

improvement and reduced
inspection costs by aligning with risk
level (metrics: risk reduction, costs)

Power and
utilities

7% unavailability due
to unplanned events;
high reactive
maintenance costs;
two times lost
revenue from
outages due to PPA
penalties and spot
market coverage

Implemented
EAPM; analyzed
asset criticality;
performed root
cause analysis

Poorly performing
assets identified;
unavailability reduced
by 2%

Moved to proactive/predictive
maintenance approach; 2%
availability improvement (metrics:
reduction in unavailability; total
availability benefit [$])

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TABLE 1
Asset and Operations Optimization by Industry
Real-Time
Operational
Optimization

Use Case
Description

Real-Time Asset
Management

Metals and
mining

Asset management
and reliability
program priorities
difficult to
communicate to
users in remote
mining locations;
wrong level of data
(too much and too
little) for too many
users; inconsistent
formats

Use EAPM to tie

together
machine health
analysis with the
CMM system to
provide proactive
maintenance

Consistent reports
available to
executives (with ability
to drill into specific
mine locations);
information
associated with
equipment health
available to
practitioners (with
drilldowns into events
and case histories)

Data is available in one location and

is always current; improved
response in changes to asset
health; dashboards with drilldown to
user choice for level of detail

Transportation

A reduction in
economic resources
for infrastructure
management
required a national rail
organization to certify
tasks and prioritize
maintenance

Identify which
assets have lowrisk impact and
can be
postponed
during heavy
work periods

Update maintenance
cycle frequency based
on the asset's
reliability; assess the
expected failure rate
based on the real
maintenance
frequency

Reduction of operating costs;

improved process optimization;
reduction of time spent planning
maintenance (metrics: operational
cost savings)

Industry

Benefits over Traditional Approach

Source: IDC, July 2015

AN ASSET PERFORMANCE MANAGEMENT SOLUTION: MERIDIUM'S ENTERPRISE APM

Meridium's integrated Enterprise APM, shown in Figure 4, aligns with a client's asset strategy to manage
assets and optimize asset financials and operations (refer back to Table 1). Meridium Enterprise APM is
the solution for the 3rd Platform. Deployed on-premises, in the cloud (Meridium APM Now), or in a hybrid
model, Meridium Enterprise APM provides the user experience, mobility, and innovation that clients
demand when looking to maximize the productivity and safety of industrial assets.
Meridium Enterprise APM includes the following software solutions, with benefits, capabilities, and
navigation within the software:

Asset Answers is a comparative analytics and benchmarking software solution that allows
users to compare asset performance by manufacturer and model for assets owned by the
company and across the asset's entire operating fleet. Utilizing Asset Answers helps users
identify assets with lagging performance relative to their peers that impact a company's
competitive position and will support new and replacement asset selection.

APM Health provides visibility and awareness of asset conditions and event information
through performance indicators and enables strategic decision making in the field.

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APM Strategy enables intelligent strategies that proactively optimize asset management plans
to balance spend and mitigate the risk of asset failure through reliability-centered maintenance,
failure modes and effects analysis, and risk modeling.

APM Failure Elimination increases asset availability and return on assets and helps recover
the "hidden plant" by identifying poorly performing assets and systemic reliability issues
through scorecards, root cause analysis, reliability analytics, and production loss analysis.

APM Mechanical Integrity provides safety and environmental compliance by managing

loss-of-containment risk and process safety management through risk-based inspection,
inspection management, and thickness monitoring.

APM Safety provides safety risk assessment and compliance through hazards analysis,
SIS management, and calibration management.

Meridium supports its Enterprise APM software solutions through:

APM Foundation. This is the infrastructure that provides the administration and
tool capabilities necessary for dashboards and reporting to address the users
using Meridium's Enterprise APM solution for different work requirements at different levels
within an organization.

APM Connect. This is an optional APM enterprise service bus (ESB) to enable connections and
deep two-way integration to critical systems (there are currently over 700 Web services available to
connect to many types of industrial systems) and is facilitated through Meridium's Integration Center
of Excellence (ICE), the company's professional integration services organization. IDC believes that
no other vendor offers this capability. Integration through APM Connect is facilitated into EAM
systems such as SAP, IBM Maximo, and Oracle; analytical interfaces such as Emerson AMS Suite
and GE System 1 using APM data adapters; and custom integrations.

This infrastructure provides a unified data model and connectivity for assets, risk, health, events, and
recommendations. In addition, Meridium provides product and solution training, industry education,
and certification programs through the Meridium Institute. Its professional services organization offers
assessment and deployment methodology to assist clients in reaching their project objectives
efficiently. Meridium also works with a world-class partner ecosystem that includes companies such as
GE, IBM, SAP, and Accenture.

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FIGURE 4
Meridium
Enterprise
APMasset
Optimize
your

ASSET
HEALTH

performance while managing risk

ASSET
STRATEGY

FAILURE
ELIMINATION

MECHANICAL
INTEGRITY

ASSET
SAFETY

ASSET
ANSWERS

APM FOUNDATION

APM CONNECT

Source: Meridium, 2015

Meridium Enterprise APM: Asset Intelligence

Many companies implement an enterprise asset management solution to support maintenance
activities and act as the system of record. While these are critical business processes, EAM solutions
often don't have the tools needed to develop, manage, and evaluate the effectiveness of asset
strategies. They generally fail to answer the following questions Will this asset fail? When will it fail?
How do we prevent it from failing? What are the risks? How critical are the risks? How do we mitigate
the risks?
Meridium Enterprise APM leverages Intelligent Asset Strategies (IAS), which are the actualization of
design, experience, knowledge, judgment, actions, parameters, analytics, and connectivity with other
systems and assets to continuously improve safety, availability, and expense optimization while
mitigating operational risk. As the cornerstone of an enterprise APM system, intelligent asset
strategies become an automated loop of learning and continuous improvement that bridges the gap
between information technology and operational technology. Furthermore, intelligent asset strategies
drive a holistic view of asset performance by using global benchmarking and analytics.
Intelligent asset strategies use analytics to provide a platform to integrate asset data from existing and
new sources, convert that data into actionable information in a graphical format to predict how and
when an asset will fail, and recommend actions to prevent asset failure. Intelligent asset strategies
applied through Meridium Enterprise APM identify exceptions and trends in the data (1) to provide
system reliability and regulatory compliance; (2) to benchmark assets internally, across an enterprise,
and against industry averages; and (3) to adjust asset strategy dynamically to continually maximize
performance, increase asset reliability and availability, mitigate risk, and optimize operational cost.
Intelligent asset strategies also consolidate operational knowledge in a single location, making it
available across all levels of an organization and in the form needed, on mobile devices, in the cloud,
at the desk, or in the conference room as needed.

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Meridium Enterprise APM: Industry Specificity

Meridium Enterprise APM is designed to meet the specialized industry requirements of companies in
the oil and gas, chemicals, power and utilities, metals and mining, and transportation industries.
Table 2 provides some sample key performance indicators included in Meridium Enterprise APM.

TABLE 2
Sample Meridium Enterprise APM Key Performance Indicators by Industry
Industry

KPIs

Oil and gas

Cost avoidance (e.g., lost production and repairs) from outage saves
Bad actor identification
Unplanned maintenance costs and downtime
Improved financial performance (reduction in inspection and maintenance costs, increased
availability and utilization, improved capacity, reduced planned shutdowns and unplanned
failures, and reduced incident costs)
Improved personal and process safety performance (reduction in incidents, assured
conformance to state and federal inspection and environmental regulations)

Chemicals

Risk reduction costs

Inspection frequencies for low-risk assets
Reduced risk of equipment failures
Improved financial performance (reduction in inspections and maintenance cost
Increased availability and utilization, improved capacity
Reduced planned shutdowns and unplanned failures
Reduced incident costs
Improved personal and process safety performance (reduction in incidents, assured
conformance to state and federal inspection and environmental regulations)

Power and utilities

Generation: Reliability, availability, capacity factor, equivalent availability factor (EAF),

equivalent forced outage rate (EFOR), equivalent planned outage factor (EPOF)
Transmission and distribution: System Average Interruption Frequency Index (SAIFI), System
Average Interruption Duration Index (SAIDI), Customer Average Interruption Duration Index
(CAIDI), Average Interruption Time (AIT), Overhead Lines Maintenance Cost Index (OHLMCI),
Substation Maintenance Cost Index (SSMCI)
Gas: Accuracy of scheduled gas volumes (%), number of process leaks identified during
operation or downtime, reliability of gas transportation (%), overdue inspections
Water and wastewater: Water quality, unit operational cost, meter reading accuracy, number of
pipe breaks per year

Metals and mining

Assets by health
Active alerts by severity and by duration
Assets by criticality
Mean time between repair (MTBR)
Mean time to repair (MTTR)

Transportation

Residual risk (%) (remaining risk after mitigation)

Production loss (economic impact on production caused by train delays)
MTTR
Cost of maintenance
Maintenance planning time

Source: IDC, July 2015

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Meridium Enterprise APM: Analytics for Executives, Managers,

and Practitioners
Meridium Enterprise APM provides role-specific dashboards, as shown in Figure 5. In customer
interviews, we learned how important dashboards are, as companies look to provide robust tools for
executives to manage valuable strategic assets similar to those tools the CFO uses to manage cash
and financial assets.
These dashboards provide the ability for executives, managers, and practitioners to see just the data
they need and, according to their authority, the ability to navigate down to the discrete asset level as
needed:

Executive dashboards are the most comprehensive, providing the entire corporate portfolio of
assets and focusing on the long-term viability of the organization.

Manager dashboards provide short-term access to information about groups of assets and
include the ability to look at trends, mitigate impact, and take proactive action before
something breaks.

Practitioner dashboards are the most immediate, providing frontline data on what's happening
with specific assets in the plant and in the field.

FIGURE 5
Meridium Enterprise APM Executive Dashboard

Source: Meridium, 2015

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Meridium Enterprise APM: User Experience

As shown in Figure 6, Meridium Enterprise APM provides a modern user experience that is intuitive
and appeals to the workforce of today and of the future, enabling executives, managers, and
practitioners to focus on the information related to their responsibilities. Meridium Enterprise APM
provides a consistent user experience across all devices, and access to asset performance is available
wherever the user happens to be working. The graphical user interface and advanced diagnostics
actively alert asset managers and automatically create action recommendations. Early customer
reviews of Meridium Enterprise APM expressed delight in the clean look and feel; as one customer
indicated, "It wasn't overcomplicated. Engineers have a tendency to overcomplicate things, and
Meridium did a good job of managing the design, providing a more logical arrangement of data, and
making it easier for users to do their job."

FIGURE 6
Meridium Enterprise APM User Experience

Source: Meridium, 2015

Meridium Enterprise APM: Secure Deployment

Meridium Enterprise APM has been designed to provide secure deployment according to the client's
choice on-premises, in the cloud, or hybrid. We believe these options will, over time, be demanded
by the global asset performance management market. While many clients currently prefer an
on-premises or hybrid deployment, cloud adoption in the overall EAM market is growing rapidly (at a
CAGR of 16.0% through 2019). According to Worldwide Enterprise Asset Management Forecast,
20152019 (IDC #257931, forthcoming), in 2014, 67.9% of EAM solutions were used on-premises and
32.1% were in the cloud. By 2019, only 51.9% of EAM solutions will be on-premises, while the cloud

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will account for 48.1%. The rate of cloud adoption varies from industry to industry, with oil and gas
moving to the cloud faster than other asset-centric industries.

FUTURE OUTLOOK
Billions of assets are connecting to the Internet, whether in the home, in the plant, or in the office. These
devices are then controllable so that applications on mobile devices enable users to view settings in the
assets and revise those settings. Think of a thermostat that can be controlled from an iPhone or Android
app. That's convenient, but let's consider an intelligent industrial asset, which is a portfolio or fleet of
industrial facilities, a single industrial facility, a system, or an individual piece of equipment. That requires
the ability to analyze the sensor data of the asset in order to understand its actual operation and
propensity to fail. The provisioning of the data for analysis enables the building of a predictive analytical
application that recommends the next best action to avoid failure or achieve an optimum result. At that
point, the asset becomes intelligent, and it becomes a building block of an intelligent process that can be
optimized and be part of a connected business network that includes people. This can apply to an oil rig,
a refinery, a power plant, and a railcar, as well as the processes in which these assets are deployed.
With a clear benefit of building intelligence into assets and optimizing the processes in which connected
assets are deployed, what is holding back deployment? IDC surveys, as previously noted, point to asset
and operations optimization as one of the leading 3rd Platform initiatives. So the demand is there. What
is missing is the industry-specific solutions that can make assets and the processes in which they are
deployed intelligent. And what is holding back the availability of such solutions? There are multiple
factors. Consider the complexity of harvesting the asset data, the skill needed to build the analytical
models and applications, and the capability to securely deploy the solutions. Platforms such as Meridium
Enterprise APM specialized for asset intelligence will help accelerate the process of getting more
solutions deployed in the market. Security and data integration are traditionally IT skills. But an asset
intelligence solution built with IT rigor helps bridge the traditional divide between IT and OT.
Once solutions become more readily available, a familiar pattern should emerge. Successful
implementations will provide references to the next set of customers, and the market will expand. Who
will provide these asset intelligence solutions? Companies like Meridium already do. They have the
data, the existing relationships with customers in asset-intensive industries, and a vibrant partner
ecosystem that is expanding to meet demand.

CHALLENGES/OPPORTUNITIES
The opportunities are huge for asset-centric companies (oil and gas, chemicals, power and utilities,
metals and mining, transportation, and manufacturing) to reduce the risk of asset failure, evolve with
the needs of a changing and inexperienced workforce, and improve the operational performance of
assets. The friction is the complexity of building these solutions given the lack of standards, the
custom/unique interfaces in communicating with the assets, the unique formats of the data coming in
from the assets, and so on. But the economics and the high incremental value of such services will
push the industry to overcome these barriers.
Today, asset-intensive companies that typically already have an ERP, EAM, or CMM solution in place
can potentially improve the performance of operational assets by adding EAPM. It is unlikely that the
existing ERP, EAM, or CMM system needs to be displaced or upgraded. Rather, the enterprise APM
solution can be integrated into existing solutions. Companies that already leverage an APM solution

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may want to upgrade to a more modern solution to take advantage of the 3rd Platform capabilities of
Big Data and analytics, cloud, mobile, and social. Often, the cost of the APM investment is rapidly
returned through the improved performance of operational assets and avoided shutdowns.
However, the cost and length of an APM implementation can be challenging for some organizations to
approve. Asset-intensive organizations should determine which assets or processes will provide the
biggest impact or the fastest time to value and should choose the most appropriate method of
deployment (on-premises, hosted, cloud, or hybrid). It is also important to consider using resources
such as Meridium's APM Connect and Integration Center of Excellence to leverage prebuilt interfaces
and asset connectors as well as implementation methodologies and best practices. Meridium can also,
through its professional and training services, support clients with turnkey APM solutions to facilitate
solution designs, software implementation projects, and client organization change management.
Meridium will need to work with its existing customers and early adopters to help them take advantage
of the 3rd Platform capabilities of Meridium Enterprise APM. A group of successful customers across
each of the industries on which Meridium focuses will provide the groundswell of references needed to
move the market forward and provide benchmarks for customer success.

CONCLUSION
Does the 3rd Platform from the industrial Internet lead to added business value? To answer this
question, we must add a "V" for value to the definition of Big Data, one of the pillars of the 3rd
Platform. The only reason to monitor and analyze Big Data is when the initiative yields value to the
business over and above the increased effort and cost to manage and analyze these more complex
data sets that make up asset performance management.
For example, the setting of maintenance priorities for production assets is a high-value decision given
the level of expense to the enterprise for spare parts and maintenance operations and the cost to the
enterprise when asset failure causes service disruptions. But is the mining of the sensor data relevant?
If taking account of the asset data can improve the accuracy of predictive models for asset reliability,
then such data is relevant and the initiative can deliver value. Organizations are finding that predictive
maintenance analytical models can guide managers to better decisions on how to deploy assets and
when to maintain them to ensure safe, efficient, and optimized operations.
To capture value on asset performance management:

Focus on the highest-value asset financial and risk optimization decisions.

Ensure new applications meet 3rd Platform requirements Big Data and analytics, cloud
deployable, mobile, and social.

Look to a new generation of applications that leverage data from connected assets in order to
optimize high-value asset and operations decisions.

To accelerate deployment of intelligent applications for the Industrial Internet, consider and deploy
solutions such as Meridium's Enterprise APM that are focused on asset intelligence and specialized for
asset-intensive industries.

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About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory
services, and events for the information technology, telecommunications and consumer technology
markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts
provide global, regional, and local expertise on technology and industry opportunities and trends in
over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology
media, research, and events company.

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