How to Calculate ROI of a CMMS
*Industry Average CMMS Cost Savings range from 10% to 40% annually
The basic concept of the ROI Expense Model is:
Overall Maintenance Cost Savings less the CMMS Cost = “ROI in Dollars Saved”
(For this Example, we are using an Average Annual Savings of 15%)
Example: If you have a total annual maintenance expense of $200,000 and you implement PropertyTRAK for a cost of $8,000 annually, you’d realize a 15% reduction in annual maintenance costs. You’d save $30,000 for the year and realize an Annual ROI Savings of ($30,000 – $8,000) = $22,000.
Typical areas where savings can be realized:
- Structural Organization
- Labor & Productivity
- Inventory Management & Tracking
- Reduced Downtime of Critical Systems
- Increased Asset Health & Life Expectancy
- Emergency Preparedness
Overall a well configured CMMS system can help save and prevent costs by providing an organized structure of asset information and work flow applications that improve the efficiency of your maintenance staff and vendors. Scheduled preventive maintenance reduces downtime by preventing equipment failures and extends the useful life of your assets.
Also, there are many other aspects to consider to fully calculate your savings and tangible improvements including: reduced potential liability, better accountability of your vendor costs, and improved communication among your employees, maintenance staff, and management.