What's the ROI of CMMS software?: Calculating the cost of a CMMS and its value to your business

Calculating the cost and ROI of a cloud-based CMMS

Back to blog

One of the most common questions we get here at Fiix is, “How much does a CMMS cost?” The runner up is, “What’s the ROI of CMMS software?” Both are good questions. But they’re also tough ones.

That’s because there’s no magic number. There are a bunch of factors that impact how much cloud software costs, and more importantly, how much value you get from your CMMS.

This blog is a primer on some of those factors (we can’t get into absolutely every detail here, since a lot of it is particular to your facility). It assumes that you already have some knowledge of CMMS software and what you’re looking for in a solution. If you don’t have that information yet, check out our guide to buying CMMS software.

Six factors that influence the cost of a CMMS

The six factors that influence the cost of a CMMS: software costs, implementation, hardware costs, integration fees, training, support, and administration, and scaling your CMMS

Software costs

Cloud-based CMMS software often runs on a subscription model. Subscription fees are ongoing payments made to a software provider to use its product. They are usually paid on an annual basis, although monthly and quarterly payments are also common.

Subscription fees are typically paid per user, and most software providers offer different subscription tiers, with the price of the subscription increasing with the number of features, level of service, ability to customize, and more.

When determining an estimate for subscription fees, think about the following:

  • How many people will be using the system
  • What features you need
  • What level of service you require from a vendor

Implementation

The price of implementing a CMMS includes both the direct and indirect costs of setting up the software and making it fully operational.

One potential cost of implementation is paying for the services of a CMMS vendor to configure the system, migrate data, create PMs, and more. Most providers charge hourly or charge for an implementation package that includes these services. A detailed scope of work from a vendor should outline the number of hours required for implementation based on the number of assets, PMs, pieces of inventory, etc.

Training, support, and administration

The cost of training and support is entirely dependent on the size, goals, and capabilities of your team.

As with implementation, most CMMS providers offer a specific number of hours for training and support with the purchase of a subscription. The number of hours typically increases with more expensive tiers. Any additional hours are charged hourly. The number of hours of training and support, along with its price, should be available on a scope of work from CMMS vendors.

When determining the cost of training and support for your CMMS, you have to look at how comfortable your team is using the software, how quickly you want to get up to full speed, and how many users will have access to the system.

The last element to take into account is the time and labour spent on system administration, which is the ongoing management of the software. This includes the cost of adding and onboarding new users, creating reports, creating new PMs, and more.

Fiix’s approach to CMMS success (click to enlarge)

Hardware costs

Purchasing mobile devices is one of the few hardware costs associated with cloud-based CMMS software. One of the main benefits of a CMMS is its mobile capabilities, which allow technicians to do work from anywhere and at any time. That’s why equipping your team with tablets or smartphones helps you find the most value in your software.

Most cloud-based CMMS systems have a mobile app, which makes it easy for users to access the software on their own phones or consumer-grade tablets. However, it’s best to consult with CMMS providers directly and find out which devices provide the best experience.

Integration fees

It’s essential for your CMMS to integrate with your company’s other software like an ERP. This makes it possible for maintenance to collaborate with other departments, collect better data, and find efficiencies.

While integrating a CMMS with other systems has become much cheaper with recent innovations, it is often facilitated by CMMS providers, which means an additional cost.

The first step in determining the price of integration is to figure out which systems to connect your CMMS to. There are three kinds of systems that can connect to your CMMS: Production systems (like sensors, PLCs, and SCADA), ERP software, and business process management software. Integrating with production systems may require an extra expense for additional hardware.

The next step is to talk with CMMS providers to understand what integrations are possible, if they charge for integrations, and how much each integration could cost.

Scaling your CMMS

As your company grows, so will the demands on your CMMS. Scaling your software to fit these needs can lead to extra costs. That’s why you need to think several years down the road when calculating the total price of a CMMS.

One area of considerations is an increase in users. If you anticipate the maintenance team doubling in the next five years, your CMMS subscription fees will most likely double.

A short guide to buying the right CMMS. Get my free guide now

The second major consideration is extra training, support, and hardware. More spending is required on these services and equipment when multiple sites or additional users adopt the software.

Lastly, your CMMS must keep up as your business becomes more sophisticated. That might mean moving your CMMS subscription into a higher tier that offers more customization, reporting tools, security features, and more.

Calculating the ROI of CMMS software

Now it’s time to figure out how much value a CMMS can deliver. This section comes with a disclaimer: The ROI of CMMS software is dependent on so many factors, many of which are specific to you, your goals, and your facility. So this is less of an exact ROI calculation, and more of a list of areas where CMMS brings value to the business.

Downtime

Downtime can cost anywhere from a few thousand to a few million dollars every year. A CMMS can help you reduce downtime and the related costs by:

  1. Helping you understand the cost of each hour of downtime
  2. Tracking the number of downtime hours before and after implementing a CMMS
  3. Giving you visibility into individual types of failure or PM tasks to highlight how a CMMS has reduced downtime in each case

Labor

Eliminating inefficient processes with a CMMS can save you a lot of time and money. Once you have a baseline in terms of the time it takes to complete tasks as well as labor hours and pay rates, you can start finding answers to the following questions, and find the ROI of CMMS software as it relates to labor costs:

  • Are fewer unplanned breakdowns resulting in fewer additional staff or expensive contractors?
  • Are we running more planned maintenance? (Keep in mind that planned maintenance has been shown to cost three to four times less than reactive maintenance)
  • Are we saving time on data entry thanks to easier, digital report building?
  • Is work getting identified and done faster, thanks to mobile notifications?
  • Are facets like productive time, quality of work, and the total value of labour hours increasing?

Inventory

Fine-tuning your spare parts purchasing and organization can lead to fewer costs. You can measure this by calculating the amount you’ve spent on inventory before and after a CMMS. Here are some ways a CMMS can lead to smarter inventory decisions:

  • Spend less on emergency parts purchasing by scheduling maintenance and establishing condition-based monitoring
  • Track inventory and set minimum quantities so you’re not overstocking
  • Locate inventory easier to decreases downtime and labour costs

Asset life and efficiency

Part of the ROI of CMMS software comes from ensuring assets get the maintenance they need to operate longer and run at full speed. There are two main advantages of this that can save your company thousands or millions of dollars in the long-term:

  1. Machine availability, performance, and quality are increased.
  2. The life of assets are prolonged.

The ROI of CMMS software is dependent on so many factors, many of which are specific to you, your goals, and your facility.

Company sustainability and success

There are many ways a CMMS can deliver a higher ROI by affecting the business outside the shop floor. Here are just a few examples:

  • Better maintenance helps keep machines in like-new condition, decreasing utility costs.
  • Software can make audits easier, ensuring your company capitalizes on partnerships that require compliance with certain regulations.
  • Using a CMMS to schedule and track PMs can decrease downtime which cuts down manufacturing delays, so products are shipped on time and your customers stay happy.

One size does not fit all when it comes to the price and ROI of CMMS software

CMMS software comes in all shapes, sizes, and yes, prices. Some can run hundreds of thousands of dollars while others are free. Each comes with different features, capabilities, use cases, and ROI. Figuring out the cost of a CMMS and the value it provides requires a careful analysis of your company, its goals, and the CMMS options available. It’s important to consider all these factors and talk to different CMMS providers to get the full picture. When you can achieve a 360-degree view of all these elements, you can be confident that you know all your options and can choose the right fit for your organization.

Modernize your maintenance

Get the Executive's Guide to Digital Transformation and find out how.

Get the guide

Exec guide laptop graphic

Want to see Fiix in action?

No problem. You can try it today.

Free tour

fiix dashboard screenshot