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How to build a compelling ROI for a Next-Gen CMMS

Updated: Nov 11, 2022

Technologies have evolved considerably and your CMMS is no longer equipped to keep your plant running properly. The reliability of your machines is poor and this has a direct impact on your profitability. Next-gen CMMS can be expensive and justifying a change is difficult. I will try here to present solutions and arguments to help you build a compelling ROI.


How to justify the ROI of a next-gen CMMS



Introduction: Your company currently uses an obsolete CMMS.


Nowadays, paper-based CMMS are considered obsolete because they were developed more than 25 years ago. Inevitably, these CMMS present functional, technological, cybersecurity, architectural and technical debts. Note: Software is now considered obsolete every 2-5 years.


Moreover, paper CMMS are complex, misused, hated and confusing. Their lack of on-board communication leads to errors and assumptions. The poor precision of the data collected leads to false analyses and poor decision-making. The lack of integration creates an already too big gap in access to Industry 4.0 when your new machines and your OEMs are equipped with it.


Without knowing it or ignoring it, your business is in danger. I would also point out that a good number of decision-makers, by their age and their generation, are disconnected from reality. In fact, your workplace becomes a museum! This compared to your competitors but also to the daily life of your operators and technicians, who themselves use the latest computer technologies daily at home.


You must change your CMMS now.


CMMS are now linked to technologies and in particular to that of the cloud. Thanks to the democratisation of cloud and code, a large number of new CMMS are now available in the market. They have a lot of new features. I call them next-gen CMMS...



What is a next-gen CMMS?


A next-gen CMMS is a cloud-based solution that provides mobility, simplicity, rich media, communication, analytics and integration (API) features.


The mobility: Available on app stores and on the web, the next-gen CMMS is available everywhere, in all departments and in the pockets of all your employees on tablets or smartphones. As a result, this first feature automatically and dramatically improves your company's maintenance culture. CMMS is now associated with all stakeholders and becomes rewarding when reactive tasks are raised and corrected before breakdowns occur. NO MORE PAPERWORK


The simplicity: With a simple user interface design, the next-gen CMMS delivers positive experiences that keep the user loyal to the product. Implementation is easy and training is "free". Equipped with automation, your processes can be integrated into daily work (safety, hygiene, tools, etc.). Interestingly, these features have a big impact on the accuracy of your data. As a result, the next-gen CMMS has an unprecedented adoption rate. NO MORE BABYSITTING


The Rich Media: Next-gen CMMS are giving the ability to attach pictures and videos everywhere (requests, work orders, tasks, assets, parts...). A photo can replace 1000 words. Assumptions will be greatly reduced, decreasing errors and your history will be documented and detailed like never before. Employees can learn on the job with diversity and visual gestures. The next-gen CMMS becomes the safe of your know-how. NO MORE ASSUMPTIONS


The communication: Communication on paper inevitably leads to omissions and, more seriously, to incidents. With chat features built into next-gen CMMS, all communications are attached to work orders and linked to notifications. No more room for oversights, always be aware of what is happening in your plant/facility. You can also share work and information inside or outside your organisation. NO MORE ERRORS


The analytics: The whole point of a CMMS is to collect maintenance data in order to analyse it and allow decision-making. The next-gen CMMS are equipped with integrated visual analytics generator that informs, promotes performance and allows decision makers to identify problems. NO MORE LETDOWN


The integration: The next-gen CMMS offers an infinite capacity to connect and integrate your existing software and systems. This to develop automated usage-based maintenance by connecting sensors and PLCs or to connect your financial, change management and safety software. In other words, next-gen CMMS open doors to Industry 4.0. NO MORE COMPLEXITY



The true cost of a next-gen CMMS implementation


Based on 30 users, the annual cost of an outdated CMMS is around $10,000 USD while a next-gen CMMS will cost around $50,000 USD. My favorite next-gen CMMS is Upkeep.


The previous feature list may explain this cost difference, but I'm well aware that decision makers are obviously interested in ROI rather than feature set.


Often forgotten, we must also add the cost of digitisation linked to the purchase of a next-gen CMMS.


  1. Next-gen CMMS licences: 30 maintenance users = $50,000 USD per year + 60 production users (free)

  2. Hardwares: Smartphones (Samsung Galaxy XCover Pro) or Tablets (Samsung Galaxy Tab Active) and accessories: 30 maintenance users + 30 production users = $24,000 USD. (No sims provided, if wifi is available in facility. Hardware to be replaced every 3 years.)

  3. Software: Office app, email, calendar, video conference, security and management controls (Microsoft Office 365 E5): 60 users = $27,300 USD per year. Alternatively (Google Business Standard): 60 users = $12,960 USD per year.

  4. Training for hardwares and software: Video-based content can be created for every device and software introduction: $6,000 USD every 3 years.

  5. Professional Implementation: data mapping, cleaning and formatting + migration of existing records = $30,000 USD every 3 years.

  6. IT related work: infrastructure, security and user management = $30,000 USD every 3 years.

  7. QR codes: Printer, labels and software to QR code assets and spare parts = $1000 USD per year.

  8. Integration: IoT sensors and financial software = $30,000 USD every 3 years.

Average total expenses per year = $111,000 USD



Costs that a next-gen CMMS will directly impact


The operation of an obsolete CMMS entails costs considered normal since they have been budgeted for years. But the limitations created by the use of obsolete software prevent you from reducing these costs.


  1. Maintenance staff efficiency: The use of an obsolete CMMS considerably reduces the time on tools for technicians (search for information, parts, paperwork, delays, lack of communication, decision, double handling, etc.). This time is estimated at 4 hours per day. 30 users x 4 hours x 228 days x $20 USD = $547,200 USD per year.

  2. Breakdowns cost: Processing or manufacturing plants with around 250 employees and using an obsolete CMMS face an average of 1500 breakdowns per year for 1000 hours. If we take the average breakdown cost per hour at $3000 USD = $3,000,000 USD per year.

  3. Training cost: 30 users x 40 hours x $100 USD = $120,000 USD per year.


With an average of $3,559,200 USD per year of improvable expenses, the budget for a next-gen CMMS represents 3.7%.


Purchasing a next-gen CMMS will significantly reduce the inefficiency of your technicians inherent in using an obsolete CMMS. Obviously, you will not recover this money as such, but by maximising the effective working time of your technicians, you put all the chances on your side to reduce downtime.



The hidden benefits of next-generation CMMS


Buying and implementing a next-gen CMMS brings a host of totally underestimated benefits to your business.

  • Location: A complete and visual map of your factory will help all stakeholders to take ownership of the premises. Everyone speaks the same language.

  • Assets: With QR codes, images, OEM manuals and many more information loaded, accurate data will be registered against the assets. The search for information is also reduced to a minimum, since everything is in one place.

  • Requests: By simply flashing a QR codes, production create digital documented requests before failure since they have the CMMS in their pocket. Up to 4 times more valuable requests generated.

  • Work Orders: Technicians' comments, data and timesheets are as accurate as ever.

  • Preventive Maintenance: Tasks are implemented and documented. Video-based instructions can be linked.

  • Parts and Inventory: Search and get all your spare parts at a glance wherever you are in the factory.

  • Analytics: Easily design and share all your performance and KPI graph.

  • IoT sensors: Start connecting IoT sensors to mobile and stand alone equipment will save you 28% of your maintenance budget. Automated your meters to develop maintenance based on asset usage.

  • Free Digitalisation: You will be able to set clear goals, encourage collaboration (between your operations and maintenance teams), initiate improvements, work in a better environment, see employees who are happy, personally developed, invested, confident and overcharged with leadership. E.g. The smartphones above are dual SIM tray which means users can use their business phone for personal use. You can therefore publish job offers with an included smartphone. This clearly sets you apart from the competition.

  • Free training: Next-gen CMMSs are so easy to use, user-friendly and intuitive. Therefore, no training is required when set up is done right.


What is the actual ROI then?


These figures are based on average implementation figures made by imwt - in maintenance we trust. The results will be visible from the first year.

  • Year 1: 25% technician efficiency gained, 5% breakdowns and 50% training improvement - New CMMS Saving of $238,000 USD compared to CMMS cost of $111,000 USD. Gain $127,000 USD

  • Year 2: 50% technician efficiency gained, 10% breakdowns and 90% training improvement - New CMMS Saving of $575,600 USD compared to CMMS cost of $111,000 USD. Gain $464,600 USD

  • Year 3: 75% technician efficiency gained, 15% breakdowns and 90% training improvement - New CMMS Saving of $575,600 USD compared to CMMS cost of $111,000 USD. Gain $772,400 USD


Generally, since this money is budgeted, companies develop areas of improvement around teams and resources. This can translate into new specialist hires, IoT-related projects, or education around leaders with training on scheduling and planning.


After the third year, everything has to be put back together again, but your business will already be transformed.



What are the risks?


I am well aware that it is important to state the risks when you are going to develop your business case. Here are some leads:


  • Stat-ups: Let's face it, the best current next-gen CMMS are offered by start-ups. If your organisation is a large group, decision makers are skittish. However, it is nonsense, times are changing and investments must be made on the fastest companies and not the biggest ones. Even if it means changing every 3 years!

  • Security: Times are changing, you have to admit that the cloud is now the safest way to store data. It is also the way for next-gen CMMS to automatically update and improve web and app store versions (usually every 15 days).

  • Big job: Changing CMMS can be scary because to be honest, it's still a big project. The most effective way to overcome this risk is to have the unconditional support of this change by all the managers and decision makers. It is also advisable to call on professional maintenance and innovation consultants to ensure speed and efficiency.



Conclusion


You will understand, you must change your CMMS without further delay.


I chose to conclude with two situations:

  • “Don’t show up to prove, show up to improve” - Simon Sinek

  • “The only way to find out if it will work out, is to do it.” - Simon Sinek.



imwt - in maintenance we trust





I hope this article sheds some light on the subject. Do not hesitate to leave your comments and raise questions. Thank you for your time.


This article is based on suggestions and personal studies aimed at generalising information. Please be respectful in your comments.

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