CMMS Return on Investment (ROI)
Considering implementing a computerized maintenance management software (CMMS) system? Maintenance managers recognize its value, however justifying the cost can be challenging. Demonstrating the ROI of CMMS systems is crucial if you want to seek budget approval from upper management.
Quantifying the Benefits of CMMS Software
Delaying implementation of a comprehensive maintenance management system will cost your organization more in the long run. Equipment downtime, emergency repairs, overtime costs, spare part costs, and time spent preparing for audits can all chip away at your organization’s bottom line. CMMS and enterprise asset management (EAM) solutions transform your maintenance operations from reactive to proactive. They reduce costs by helping you plan and schedule preventative maintenance, increase equipment life and reliability, and boost employee productivity.
Key Benefits
Controls costs by preventing emergency repairs, reducing unnecessary spare parts inventory, and improving the use of labor resources
Ensures regulatory compliance by consistently including safety and precautionary steps in work order procedures
Generates preventative maintenance work orders designed to keep your equipment up and running and extend the life of your operating assets
Assures quality by keeping assets in peak operating condition
Save 15-30% on Your Maintenance Budget
Depending on the size and operating characteristics of your organization, this could translate into tremendous annual savings. A.T. Kearney, in conjunction with Industry Week magazine, published a customer satisfaction survey that sampled 558 companies who were using a maintenance management software package. The report revealed that by using a maintenance management system, a company could significantly reduce the number of breakdowns and lost time resulting from parts being out of stock. The companies surveyed reported the following benefits:
Justifying the Cost of DPSI’s CMMS Software
A maintenance manager of a mid-sized manufacturing plant with approximately 150 employees, and almost as many machines and spare parts, was challenged with proving the value of DPSI’s maintenance management software. In order to justify his decision to computerize the maintenance department along with inventory and purchasing, he created a chart depicting the amount of money the plant risked losing by not implementing a CMMS. The chart successfully convinced upper management that the cost of not having parts in stock was exorbitant, and that our CMMS software was 100% worth the cost.
| Part Description | Price for Part – Rush | Days for Delivery – Rush | Price for Delivery – Rush | Downtime Hours |
Downtime Cost per Hour | Total Cost of Rush Replacement | Cost of Part if in Stock |
|---|---|---|---|---|---|---|---|
| Backup Variable Volume Pump | $1,000 | 21 | $1,100 | 508 | $100 | $53,000 | $1,230 |
| Backup Machine Nozzle | $4,720 | 14 | $4,900 | 355 | $100 | $43,120 | $4,876 |
| Backup Heat Exchanger (Small) | $1,335 | 28 | $1,485 | 680 | $100 | $70,820 | $1,845 |
| Backup Heat Exchanger (Large) | $3,306 | 14 | $3,456 | 344 | $100 | $41,162 | $3,816 |
| Backup Screw Repair | $2,085 | 28 | $3,085 | 678 | $100 | $72,970 | $2,645 |
Additional Information on Measuring ROI
Looking for more content on measuring the return on investment of CMMS/EAM software, or maintenance management costs? We’ve got you covered.
Maximizing the Potential of Your CMMS System
Most CMMS users occupy 50% of the available functionality at best. Learn ways in which maintenance managers can maximize CMMS potential to increase ROI.
5 Ways to Take Full Advantage of CMMS Software
Review maintenance activities and discover these five ways to realize cost-savings and take advantage of CMMS software to its fullest extent.
How to Estimate the ROI of a CMMS
The ROI of maintenance management software is ultimately its most important factor. Learn how to calculate CMMS return on investment.