One of the most important things every professional must consider when making a significant business-related purchase is: what will the return on investment be?
Let’s face it—money makes the world go ‘round. If you’re looking for a way to make your maintenance operations more cost-efficient and productive, a computerized maintenance management system (CMMS) may be just what you need. In this article, we talk about how to estimate your return on investment (ROI) with a CMMS. We’ll also discuss how a CMMS can save your business money.
What is Return on Investment (ROI)?
ROI stands for Return On Investment. In simple terms, it measures how much value you’ve gained from an investment relative to the amount of money invested. To accurately determine your return on investment of your CMMS, apply the following CMMS ROI formula:
CMMS ROI = (CMMS Value – CMMS Cost) / (CMMS Cost)
The “CMMS Cost” includes the purchase of the software, service, support, and any additional services. “CMMS Value” is the dollar value of savings across all maintenance costs. Each of these variables is covered below.
Areas of Maintenance Costs
The first part of determining your CMMS ROI is figuring out your maintenance costs. This part of the equation is easier to find, so it makes for a good starting point. More likely than not, your cost drivers are already apparent to you. Examples of common maintenance management costs include:
- Work order generation, processing, and closure
- Inventory management and overhead
- Expedited inventory delivery fees
- Condition audits
- Report generation
If monetary costs are not easily calculated, ask questions like the following:
- How many hours of emergency maintenance do you experience in a week?
- How many hours of lost production time do you average monthly?
- How much time is spent creating and closing work orders each week?
After estimating all know maintenance management costs, both direct and indirect, enter the total into the the “CMMS Cost” portion of the equation above. Don’t worry if the number seems high – a CMMS has the potential to significantly reduce this value.
Value Created with CMMS
Maintenance management software has many capabilities that have the potential to create value (or reduce maintenance management cost). Over time, this value will lead to a significant return on your CMMS investment. Compare the information below to the cost drivers mentioned earlier.
Work Order Generation, Processing, and Closure
The ability to automatically create, process, and close work orders rather than using pen and paper or a spreadsheet, can easily save you up to 50%. The time freed up can be used to accomplish more maintenance tasks more quickly, or to reduce overall maintenance labor costs.
Inventory Management
In order to complete or fulfill work orders, you need parts and supplies. With a CMMS, you’ll be able to optimize inventory management, saving you up to 50% on excess inventory purchases and expedited delivery fees. Maintenance management software allows you to keep track of inventory counts in real time, as well as send notifications via email when parts are due for reorder.
Condition Audits
Numerous costs are associated with on-site equipment condition audits. These costs can include the hourly rate for the contractor’s time, data analysis and reporting fees, and other costs such as additional fees based on the size of your facility, scope of the audit, and the volume of documentation that must be created. With maintenance management software, audits will be faster, easier, and possibly less frequent, saving you up to 80%.
A CMMS keeps detailed equipment records so you can easily check information related to the status of your machines. You’ll also be able to find patterns in reoccurring repairs to help you make more informed decisions about maintaining versus replacing assets, lowering the downtime of your equipment and troubleshooting breakdowns faster, leading to improved asset life and reliability.
Report Generation
Any of this information can be put together through report generation, which costs up to 50% less with CMMS automated reporting capabilities. Self-refreshing dashboards display KPIs (Key Performance Indicators), along with notifications and alerts, which give you insight into the status of your current maintenance work.
Built-in maintenance reports, charts, and graphs cover every aspect of your maintenance operations. You can modify reports to meet your needs as they change. User-defined data sets also filter information and sort records.
With all of these savings, your investment in a CMMS will pay for itself in a relatively short time frame.
Determining the Payback Period
Knowing your CMMS ROI is one thing, but corporate executives will want to know how soon that return can be achieved. This time frame is known as the payback period. While individual results will vary, the payback period with FTMaintenance maintenance management software can be as short as 4 months!
FasTrak expedites the payback period through services such as CMMS implementation services and CMMS training. When you become an FTMaintenance customer, we’ll work with you well beyond the installation of the software—we’ll provide you with detailed instructions on how to import your data and train your users on the most important functions of our software.
You’ll have unlimited access to our CMMS customer support to answer your questions and assist you in getting comfortable with using FTMaintenance CMMS. When your software gets up and running quickly and users are able to maximize the use of our CMMS features, the payback period becomes a lot shorter.
FTMaintenance CMMS Software
Achieving a positive CMMS ROI is something that happens over time throughout your use of FTMaintenance CMMS software. It involves more than making back the money you spent on the software (your “payback”). The “real” return occurs when you begin seeing changes in the way your maintenance team operates. See how FTMaintenance can help you reduce your maintenance management costs by scheduling a demo.