The Beginner’s Guide to Increasing ROI with CMMS

February 6, 2022

Management teams are always looking for ways to increase profits and improve their bottom line. Some organizations set higher prices for their products, while others go smart and look for ways to cut down on expenses. One of the most comprehensive ways to drive your profits forward and improve return on investment is by investing in solutions that reduce operating costs without compromising on output.

The best way to do this is to look for inefficiencies in the production process and improve them. Some of the common inefficiencies in the organization today include unscheduled downtime, higher time to repairs, unorganized maintenance procedures, and inconsistencies in production.

While the root cause behind these inefficiencies can vary from organization to organization, a CMMS or a computerized maintenance management solution can help identify inefficiencies and reduce them. Preventive management schedules are a norm with CMMS solutions and help reduce downtime, improve technical efficiency, and reduce sudden disruptions.

However, CMMS solutions do come at a cost, and just like every concerned business owner, you would want to know the return on investment from the expenditure. In this article, we introduce all beginners to measuring and increasing ROI with your CMMS solution. The key metric here is efficiency.

Calculating ROI of a CMMS Solution

The formula for calculating the ROI of a CMMS solution is pretty simple. You can subtract the cost of the system from the value it provides and then divide it by the total cost. However, you will need to know concrete numbers for the value of a CMMS solution and the cost of a solution to compute this metric. While you may know of the cost, you may find it hard to derive the value offered by the CMMS solution and give a solid number to it.

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If you do not have the time and effort to compute a detailed amount for the ROI of your project, you can run through the research examples below to figure out how the system can benefit you:

  • According to research by the United States Department of Energy, a CMMS solution can help decrease almost 12 to 18 percent of the total costs. The decrease comes primarily through preventive maintenance measures.
  • Companies can generate an ROI of over 545 percent from their CMMS solution over 20 years. This stat was revealed in a study by Jones Lang LaSalle.
  • Manufacturing plants focused on defect elimination and preventive maintenance within their CMMS solution achieved an amazing uptime of 98 percent. This led to a reduction in delays. This stat was revealed in a study by the Reliability Incident Management Authority.

Ways CMMS can Improve ROI

CMMS solutions are quite comprehensive in nature and can improve your ROI in the following ways:

Reduce Equipment Downtime

CMMS systems can drastically help reduce system downtime, eventually saving an unprecedented amount of money for the organization. Equipment downtime is something that all major organizations and production facilities suffer from today. It is common for organizations to see drastic downtimes in operations and eventually suffer due to them.

Downtime can be devastating in some industries and can cause upwards of $50,000 per minute. This translates to a total cost of $3m per hour. The best way to avoid this downtime and its associated costs is regular upkeep and smart maintenance, which is exactly what a CMMS helps you do.

Improve Labor Utilizations

CMMS solutions can significantly help improve labour utilization rate. Labour utility is another concern for organizations in the current era.

AdobeStock_406984290A CMMS solution allows managers and operators to regular assign, review, and prioritize work for their labor in an organized manner. Managers can also schedule preventive maintenance measures for improved management.

Increase Asset Reliability and Life

After investing in an asset, the last thing an organization wants is to see it expire before the expected time period. As a manager, you want your assets to complete their expected lifecycles and have to incur huge expenses to constantly repair and replace assets.

CMMS systems allow organizations to track asset management and provide excellent upkeep. The maintenance solutions can help defer problems and provide a convenient solution that is simple to follow.

All of the solutions above can help improve the ROI of your CMMS solution.

True Cost of a CMMS

As we have mentioned above, the ROI of a CMMS solution can only be calculated and increased by identifying the true cost of the system. There are four primary costs that businesses incur at the time of purchasing a CMMS:

Cost of Licenses

The cost of licenses is charged per user. The people using and accessing the CMMS account will usually determine the cost of licenses. All technicians, managers and administrators will need access to the solution in one way or the other.

Cost of Implementation

The cost of implementation is calculated based on both time and money. For instance, an organization with thousands of assets will have to add them all to the CMMS system and then track the assets using periodic measures. The implementation takes time, and since you are paying your resources, it will also cost you money.

Cost of Onboarding

The cost of onboarding is another cost determined by the time more than money upfront. The on-boarding cost will include the time it takes for technicians to implement the entire solution within your organization.

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Cost of Mobile Devices

Finally, the cost of the CMMS solutions will include the cost of the mobile devices to be used for assessing records. This will include tablets and smartphones.

You can ensure positive ROI for your CMMS by prioritizing maintenance and taking the time to implement improvements and onboard staff. The results will slowly start showing and lead to improvements.

Want to see how your facility's ROI can be positively affected by Maintenance Care CMMS? Book your Demo today!

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