What level of ROI can you anticipate from your maintenance software?
A CMMS for overcoming maintenance challenges
A Computerized Maintenance Management System (CMMS) is essential for overcoming maintenance challenges and reducing operational costs by pinpointing issues in the production of goods or services.
When it comes to maintenance, the primary challenges include:
- Unexpected downtime,
- Excessive repair times,
- Overstocking or shortages of spare parts,
- Lack of information on repair costs and activities.
A properly implemented CMMS can address these inefficiencies. It allows for scheduled preventive maintenance to minimize downtime and manages inventory effectively, ensuring that technicians have the necessary parts to perform repairs swiftly and maintain cost and activity oversight from anywhere.
However, quality maintenance software is not free. While some companies offer free CMMS trials, proper implementation requires time and financial investment.
Calculating the ROI of a CMMS
The Return on Investment (ROI) measures the gains or losses generated by an investment relative to the amount of money invested. ROI is typically expressed as a percentage and is commonly used to make financial decisions, assess a company’s profitability, or compare the effectiveness of different investments.
How is the ROI for a CMMS calculated?
To calculate the ROI for a CMMS, use the following formula: CMMS ROI = (VALUE – COST) / COST
ROI of CMMS – Step 1: Consider the Value Increase
If you don’t have the time to fully determine the total investment return of a CMMS, you can rely
on the outcomes of the following studies. Each of these links the ROI of a CMMS with preventive maintenance, as a CMMS allows you to automate preventive maintenance tasks.
A company can save between 12% and 18% of costs typically associated with repairs and corrective maintenance by implementing preventive maintenance.
Several studies have quantified the gains achieved through CMMS usage. In 2002, the French Association of Maintenance Engineers (AFIM) summarized some figures that we can corroborate from numerous client experiences:
- Reduction in work preparation time = -20% to -30%,
- Reduction in maintenance time = -10% to -30%,
- Up to a 50% increase in equipment lifespan,
- Reduction in inventory value = -10% to -20%,
- 5% improvement in the purchasing cycle,
- Reduction in production downtime = -10%,
- Optimization of subcontracting agreements,
- Improved machine availability.
The expected performance from a CMMS varies depending on the sector (manufacturing, buildings, healthcare, energy, etc.) in which the company operates.
The calculation of a CMMS’s ROI largely depends on the company’s ability to break down maintenance costs prior to the CMMS implementation. This process is often complex due to limited or unavailable information.
Significant gains are highly likely during the first few years of a CMMS’s operation. When correctly implemented, a CMMS consistently yields substantial benefits.
ROI of CMMS – Step 2: Evaluate the Costs of a CMMS
Before purchasing a CMMS solution, consider these four main expenses:
- Software licenses,
- Implementation and user training,
- Support and updates,
- Necessary equipment (computers, mobile devices).
Many of the aforementioned costs will vary depending on the maintenance management options and the chosen provider. Some systems offer cloud access, which requires no software installation, like our DimoMaint MX solution.
Additionally, some companies provide basic customer support and charge extra for updates. The costs for implementation and user training also differ depending on whether customers handle these tasks themselves or hire a provider to audit equipment and assets and/or conduct on-site user training.
A Maintenance Software typically requires access to a computer, though many providers also offer mobile device access. When considering the total cost of maintenance management systems, business owners should factor in the available equipment, the time, and labor needed to deploy the software against the costs associated with additional services provided by a supplier.
