As a maintenance manager on the front lines every day, the need for a computerized maintenance management system (CMMS) is obvious to you. Maintenance software enables your team to become more organized, decreases asset downtime, and increases productivity all while lowering maintenance costs!
But even if you’re confident that a CMMS will have a positive impact, there is still a big challenge to overcome – justifying the cost of a CMMS to upper management and convincing them to pay for it. This conversation can be intimidating, and understandably so.
Before approaching upper management about purchasing a CMMS, it is important to first understand things from their point of view. Putting yourself in their shoes helps you create a well-thought-out argument that the benefits of CMMS will justify their investment.
Maintenance: A Necessary Evil?
Upper management often views maintenance operations as a “necessary evil” whose costs must be minimized, so they are hesitant to invest additional funds into the department. Reinforcing this view is the reality that maintenance expenditures can often be cut or delayed without any immediate negative effects.
Maintenance staff, however, realizes that delaying or avoiding maintenance work will likely result in greater and more costly asset failures in the future. Likewise, a lack of investment in technology, like a good CMMS, will prevent the organization from achieving long-term efficiencies and cost savings.
As you can see, the goals of upper management and maintenance department staff can be quite different. Cost savings like the ones listed are more visible to upper management, but you know that there is more going on than meets the eye. In order to get the funding you need, your goal as the person asking for funding is to help change the perception of maintenance from a cost center to a value creator. This is no easy task, but it can certainly be achieved.
Appealing to Upper Management
The goals of upper management and maintenance managers must be aligned to justify the cost of a CMMS.
Justifying CMMS software costs requires a proposal that aligns with the broader goals of the organization. Upper management will naturally view a proposal for CMMS from a financial perspective. Therefore, you will want to show upper management that an investment in CMMS software will have a measureable, positive impact on your organization’s profit. This is typically achieved by either increasing revenues with improved production uptime or by minimizing costs with reduced maintenance inventory and labor costs.
Making a Case for CMMS
Quantify the Benefits
In order to make the strongest case for the purchase of a CMMS to upper management, a proposal will need to quantify (put into numbers) the benefits of the CMMS. To do so, you must make estimations about your current maintenance operations and identify how the CMMS will help you make improvements. For example:
- How long does it take to find equipment documentation?
- Do you know when assets are due for maintenance?
- How much time is spent trying to locate parts in the stockroom?
- How many hours of overtime do employees currently work?
- What is the cost of lost production when important assets break down?
Identify Areas of Cost Savings
After answering these questions, determine how the software might help improve the numbers. CMMS software vendors can provide you with information about how their features address these key areas. For example, a CMMS can store documents electronically for quick access, reducing the time it takes to locate manuals and troubleshooting guides. Automatic notifications alert the maintenance team when preventive maintenance is upcoming or due. Maintenance reports allow maintenance managers to monitor asset health. Make a list of the areas of cost savings with estimates of savings for each.
Look to the Future
The CMMS cost justification discussion shouldn’t just focus on the present – upper management will want to see the bigger picture as well. Therefore, consider how the savings achieved by the CMMS will impact the maintenance team or other areas of the business. Perhaps the newly available funds will allow for additional personnel or justify other purchases. Upper management may also decide to reallocate funds into research and development, purchase new equipment, update facilities, or schedule much needed training.
Estimate the Return on Investment (ROI)
Ultimately, upper management is most interested in the return on their investment (ROI) and payback period. An estimate of CMMS ROI and of payback time is most easily consumed by upper management, and if well-supported by your proposal, would most effectively lead to a purchase approval. With today’s low-cost Software as a Service (SaaS) subscriptions, the payback period can be as short as a few months.
Justifying the purchase of a CMMS has its challenges, but is definitely worthwhile. According to industry sources, a CMMS can help organizations save 10-15% on maintenance costs annually. While following the advice provided in this article doesn’t guarantee a “yes” from upper management, it should give you a starting point from which to build your case.
Invest in FTMaintenance
Justifying an investment in FTMaintenance is easy. FTMaintenance is a feature-rich, easy-to-use solution that is designed to help your organization increase profits by lowering maintenance costs. Complimentary CMMS implementation services and ongoing customer support empowers maintenance professionals to start improving their operations from day one. Request a demo to see how FTMaintenance can improve your maintenance operations.