Enterprise asset management
Telecom operators and infrastructure providers have traditionally struggled to manage assets, both utilization and recording in books of accounts. Additionally, technology updates have led to large volumes of redeployable assets lying unused at warehouses.
Properly implemented and deployed, enterprise asset management — the processes, systems and tools used to continually monitor and optimize the performance of assets or groups of assets on a lifecycle basis — can help telecom operators and providers better respond to regulators, manage asset risk and provide the data to make informed decisions on capital expenditures and operating expenditures.
In this playbook, we outline benefits and challenges of EAM implementation, and how the Internet of Things offers a wave of opportunity for the telecommunications industry.
Enterprise asset life cycle challenges and EY’s tailored suite of services
- 1. Planning and forecasting
- Do we have complete and accurate visibility on inventory across circles and operating companies (opcos)?
- Does our fixed-asset register match the physical material at sites?
- Are our policies consistent across all circles and opcos?
What we provide:
- Discussions with network vendors and technical and supply chain teams
- Data duplication and redundancy validation
- Normalized attributes and enriched BOMs and material descriptions
- Cost breakup percentage against items in BOM
- Master data management team creates BOM in enterprise resource planning (ERP)
- Identification and deletion of duplicate material codes to avoid redundant ordering
- Vendor-level Class A material differentiation by capturing supplier part number
- Increased compliance with financial reporting requirements through refreshed Fixed Asset Register (FAR)
- 2. Procurement of material
- Does the system define a standardized vendor code or procurement level?
- Are standard bills of quantities with rates defined?
- Are checks completed to identify gaps in local and central procurement?
What we provide:
- Separate purchase requisition (PR) and purchase order (PO) on ERP for capex and opex items
- Definition of PR release strategy based on material group and type of procurement
- Stock availability check at the time of PR creation
- Shortages in delivery identified regarding agreed-upon BOMs
- Alternate and substitute items updated in the BOMs
- End-to-end view on opportunity loss due to procurement as parent instead
of child items
- Visibility into differential pricing for the same set of child items in the BSC* installation kit
- Easier identification of technologically phased-out items to avoid further procurement
- 3. Logistics and inventory
- Is there a standard method for material identification, accounting and verification?
- Is there a policy on cannibalization?
- Do we have complete and accurate visibility into warehouse inventory?
What we provide:
- Physical stock verification of entire circle inventory
- Auto-generated batch number and EAM serial number for the parent item at the time of good receipts note (GRN) posting
- Material is picked on a first-in, first-out basis, with aging kept in mind
- Picking list is generated against approved material request note (MRN( with suggestive serial number
- Parent item is removed, and child items are visible after cannibalization
- Wall-to-wall physical verification of warehouse inventory
- Visibility into different agreed-upon prices with vendors due to nonstandard material descriptions
- Clear visibility into unused child items at warehouse
- Accurate stock reporting with staging database
- 4. Network field operations
- Is the data across all the systems available at the same level of detail?
- Are our systems capable enough to reflect equipment status at sites?
- Are fixed asset register controls fairly automated or manual?
What we provide:
- Location ID updated with standard details in EAM system
- Location ID captured as part of MRN execution
- Real-time updates with EY mobile app on material movement and status at site
- Ability to track transaction and equipment status change history
- Reconciliation of FAR database with parent- and child-level asset count and value
- Physically verified sites with real-time monitoring of data capture quality
- Specific field to capture district and province information to cater to movement reports for tax purposes
- Use of mobile app by field engineers to initiate site-to-site transfers and returns to storage location
- 5. Asset transfer and retirement
- Is the asset management process automated?
- Do we have complete visibility into material lying at a vendor for repair and return (R&R)?
- Is there a defined policy for identification and disposal of scrap?
What we provide:
- Functionality to capture stock sent out for R&R
- Visibility into stock at vendor premises and provision for replacement against serial number
- Scrap type and category defined and maintained in EAM module
- Accounting entry posted based on written-down value of asset
- Scrap disposal allowed only against approved recyclers
- Easier identification and disposal of scrap after physical verification
- Improved visibility into usable site return inventory at the warehouse, leading to priority deployment
- Improved space utilization at warehouses and streamlined asset retirement
Asset management driven by Internet of Things
The Internet of Things (IoT) is an evolution of mobile, home and enterprise assets that are being connected to the internet to integrate greater computing capabilities and use data analytics to extract meaningful insights. The International Data Corporation (IDC) expects to see nearly 30 billion connected devices by 2020 and service revenues of US$7.1 trillion, with a compound annual growth rate of about 20%.
Powering a world of opportunities for telecom operators through the IoT
The IoT ecosystem offers a new wave of opportunity for the telecommunications industry to extend its core capability into new areas and optimize its current state, especially asset management. Connected assets offer the operator key indicators of preventive maintenance and control around asset movement, improving financial reporting and performance level.
Current challenges for telecom operators in IoT implementation include high capex due to the cost of tracking and sensing devices. However, an increased quantum of consumption will eventually reduce the price.
Asset management driven by IoT
Across industry sectors, IoT-powered asset management techniques are being adopted to build capabilities, including:
- Next-generation operational intelligence to facilitate better decision-making in terms of capex on asset acquisition.
- Asset performance management through the monitoring of key performance indicators and the use of predictive analysis to initiate preventive maintenance activities for stressed assets.
Low-power, wide-area (LPWA) networks
Communication service providers are setting up IoT-dedicated networks in collaboration with telecom operators. For example, Samsung has partnered with SK Telecom to implement the world’s first commercial LPWA network to support IoT devices in health care. Additionally, Orange telecom is implementing LPWA to supplement its cellular infrastructure and support IoT.
One initiative includes converting every vehicle into a smart asset capable of connecting with other smart assets, creating a system of smart assets. As real-time data is gathered, algorithms are designed to monitor the movement of assets to analyze traffic and to solve certain pandemic problems, such as theft.
Benefits of EAM implementation