How to Calculate (and Improve) Your CMMS ROI

Businesses must constantly look for ways to reduce operational costs, increase productivity, and make the best use of their assets in today’s competitive market. As a result, many organizations are implementing a Computerized Maintenance Management System (CMMS+) as a solution.

By centralizing the management of maintenance activities and enabling users to gain access to important information organization-wide, this software can help users achieve significant cost savings and operational efficiencies.

So today, we will discuss the advantages of using CMMS software. We will also review how an organization can calculate the potential ROI of its investments, with examples. We’ll talk about how to boost your CMMS ROI before introducing LLumin’s advanced CMMS+ features, which can help you save even more than with other traditional solutions.

The Benefits of CMMS Solutions

If you’re new to implementing a CMMS solution, you should know this software can provide several advantages to an organization that depends on its assets’ performance. First and foremost, an advanced CMMS can provide real-time visibility to all personnel and stakeholders, enabling an organization to make data-driven decisions and optimize maintenance activities for maximum efficiency.

While the associated costs with a technology investment are always front and center, for organizations looking to cut costs and improve their operations, it’s a worthwhile investment.

Below, we have given a quick overview of some of the benefits of an advanced CMMS.

Benefit Description
Reduced Equipment Downtime Organizations can reduce downtime and repair costs by streamlining maintenance processes and improving asset management.
Extended Asset Lifespan By enabling preventive maintenance schedules, CMMS software can help organizations extend the life of their assets, reducing the need for costly emergency repairs.
Improved Regulatory Compliance CMMS software can help organizations improve regulatory compliance and reduce safety risks by providing comprehensive maintenance records and automated inspection scheduling.
Higher Productivity Organizations can boost productivity and cut labor costs by automating work order generation and tracking.
Cost Savings (estimates)
  • Reduced Labor Costs: 15-30% reduction through streamlined work order management and technician optimization.
  • Efficient Inventory Management: 20-40% reduction by eliminating overstocking and stockouts of spare parts.
  • Predictive Maintenance Savings: 25-50% reduction by avoiding emergency repairs and downtime through early issue detection.
  • Enhanced Energy Efficiency: 10-20% reduction in energy costs by optimizing equipment performance.
  • Paperless Documentation: 30-50% cost savings by eliminating paper-based processes.
  • Improved Regulatory Compliance: Avoid fines and penalties through accurate maintenance records and automated inspections.
  • Optimized Maintenance Scheduling: 15-25% improvement in scheduling efficiency.
  • Minimized Equipment Downtime: 20-40% reduction in planned and unplanned downtime.

Calculating the ROI of a CMMS Solution

To understand and discover the best cost savings when investing in a new CMMS software, you’ll need to calculate your return on investment (ROI). This calculation will help you weigh the advantages of implementing your solution against its associated costs.

Several formulas can be used to calculate your CMMS ROI. However, a commonly used formula to determine ROI is:

ROI = (Total Benefits – Total Costs) / Total Costs

When determining the effectiveness of your CMMS implementation, you should consider the benefits gained, such as lower repair costs, improved asset utilization, and decreased equipment downtime. 

Also, carefully factor in the costs of your new CMMS, such as your software licensing fees, implementation costs, ongoing maintenance costs, and support costs.

CMMS Implementation Costs Description
Software Licensing CMMS software purchase or subscription fees.
Setup and Customization Configuring and tailoring the CMMS for your needs.
Training Employee training for effective CMMS use.
Data Migration Transferring existing data to the new CMMS.
Integration Integrating CMMS with other systems or software.
Support and Maintenance Technical support, updates, and ongoing maintenance.
User Licenses Fees per user accessing the CMMS.
custom graphic containing common formulas to calculate CMMS ROI

For example, suppose a manufacturing company invests $50,000 in a new CMMS system that helps to reduce production defects and increase efficiency. Over the first year, the company estimates that the system will generate cost savings of $75,000. 

The ROI can then be calculated as:

ROI = (Gains from the investment – Cost of investment) / Cost of investment

            ($75,000 – $50,000) / $50,000 = 0.5

In this case, the ROI calculation equaled 0.5, indicating that the benefits of the investment were equal to half of the initial investment. While the definition of a good ROI varies by industry, a positive ROI is always desirable.

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How to Improve Your CMMS ROI

A CMMS can help organizations maintain a competitive advantage and derive several attractive benefits, but ensuring you’re getting the most out of your CMMS software investment is critical.

We’ve listed a few suggestions to help you increase your ROI and get the most out of your new CMMS solution. 

Action Description
Utilize All Features of Your New CMMS Utilize relevant CMMS features such as asset management, work order management, preventive maintenance scheduling, and inventory management.
Employee Training Your employees should be properly trained on how to use the CMMS software. This will enable them to enter data accurately, identify trends, and fully utilize the system. This will help to reduce errors and ensure consistent data entry.
Integration & Updates Check that your chosen CMMS software integrates with your existing tech stack and is continually updated to improve functionality and performance, fix bugs, and improve security.
Track KPIs Track your performance metrics using the data provided by your CMMS software. This can help you pinpoint areas where your maintenance operations can improve, reduce downtime, and save costs.

LLumin’s Advanced CMMS+ Features & Cost Savings

While traditional CMMS solutions can offer several appealing benefits to an organization, LLumin’s advanced CMMS+ features, such as advanced analytics, machine learning, and predictive maintenance capabilities, can offer additional cost savings by expanding on these capabilities and allowing organizations to identify maintenance needs well before equipment failure occurs.

In addition to its exceptional customer service and training support for new users, LLumin enables its customers to reduce maintenance, repair, and operations (MRO) inventory costs, repair costs, and extend the life of their assets. 

LLumin’s CMMS+ software has resulted in the following benefits:

  • Maintenance Cost Reduction of 40% ​
  • 44% Reduction in Unplanned Work Orders​
  • Increase in Machine Life by Up to 35% ​
  • Reduction in Overall Downtime by 35% ​
  • 40% Migration from Reactive to Proactive ​Maintenance
  • 26% Decrease in Mean Time to Repair (MTTR)​
  • Staff Cost Reduction of 25%

Get The Best CMMS ROI With LLumin’s CMMS+

Upgrade to LLumin’s advanced CMMS+ software to eliminate inefficiencies and downtime associated with outdated maintenance management systems. With our software, you’ll benefit from streamlined work order management, real-time monitoring of machine conditions, and proactive maintenance to stay ahead of equipment failures.

At LLumin, we prioritize excellent customer service throughout the entire process. Our implementation team will tailor the software to your company’s specific goals and business processes, providing you with a complete implementation plan and a support team to accelerate and guide your digital transformation. 

If you are looking for a cutting-edge CMMS+ accompanied by a seamless implementation process and an expert customer support staff, then LLumin is a perfect fit. Join the many satisfied customers who have experienced the benefits of LLumin’s CMMS+ software today.

Getting Started With LLumin

LLumin develops innovative CMMS software to manage and track assets for industrial plants, municipalities, utilities, fleets, and facilities. If you’d like to learn more about the total effective equipment performance KPI, we encourage you to schedule a free demo or contact the experts at LLumin to see how our CMMS+ software can help you reach maximum productivity and efficiency goals.

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