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Most business decisions come down to “how much will this cost” so preparing a business case for CMMS software is the easiest way to justify the costs. A business case details the why, what, when, how, and who when justifying any project. Typically, the maintenance manager, transport manager, or maintenance planner prepares the business case. They then act as the project sponsor. The business case for justifying a CMMS for fleet involves an assessment of:

  1. The business problem
  2. The key benefits of implementing the CMMS
  3. The costs associated including upfront costs, and ongoing licences
  4. The time & internal resources required
  5. The impact on fleet operations
  6. The capability within the organisation to successfully deliver the project

When preparing a business case for CMMS software, remember the golden rule of KISS (“KISS – Keep it Simple Stupid”). The document should be concise and only contain the information needed to make the decision. To make the project a no brainer for upper management, be sure to tie the business benefits to financial gains.

 

Step 1 – Outline the Business Drivers

The business driver section details why the project is needed. The business driver is also called the business challenge. When organisations implement a CMMS, the typical business drivers are:

  1. Reduce the human error associated with paper-based maintenance
  2. Move off inefficient maintenance spreadsheets
  3. Increasing regulatory compliance pressures
  4. Move from reactive to proactive maintenance
  5. Reduce maintenance related costs
  6. Improve customer satisfaction by improving asset reliability
  7. Embrace smart assets and IOT
  8. Free up capital by optimising spare parts
  9. Reduce energy consumption
  10. Improved health & safety
  11. Optimise maintenance resources

Select the business driver or drivers that best match your organisation.

 

Step 2 – Provide the Proposed Solution

In project management, scope is the defined features and functions of a product, or the scope of work needed to finish a project (source Wikipedia). CMMS project scope outlines the features and functions to be implemented to satisfy the business need. Typical CMMS project scope line items include:

  1. Driver inspections
  2. Reactive maintenance
  3. Planned maintenance
  4. Workshop scheduling
  5. Parts & Inventory
  6. Purchasing
  7. Integration

Outline how the organisation will use CMMS software to solve the business challenge. Some organisations may implement everything at once, some may take the phased approach, and implement one section at a time. Choose the approach that is right for your organisation. The project scope will also determine the CMMS vendors that make the shortlist.

 

Step 3 – Note the Assumptions

Project assumptions are the events or circumstances assumed to be true for the CMMS project to be successful. Typically for a CMMS implementation project these include

  • Availability of planned users and a training room for end user training
  • Availability of devices like phones, tablets, or computers to access the new system
  • Funding is available to complete the project
  • Vendor system available in chosen language

 

Step 4 – Summarize the Financials

The folks signing the cheques will be primarily concerned with the cost and return on investment. The formula for calculating the return on investment is as follows:

ROI = CMMS Value – CMMS Costs / CMMS Costs

1. Value – The value is calculated by aggregating the cost savings associated with moving to the new CMMS system. David Berger outlines the typical savings associated with a CMMS in The growing value of a CMMS article on plant services. The biggest gains will come from the biggest costs, which is typically parts. Berger estimates a 10-30% saving on parts inventory levels alone. In addition, you could also include inherent value associated with better customer service, goodwill, and repeat business.

For example, if your parts budget is ~€2m per year, then a correctly implemented CMMS should save the organization €200k-600k each year.

2. Costs – When looking at the costs, there a number of costs to consider. Firstly, understand the expected upfront costs associated with the software purchase such as licences, implementation costs, and hardware costs. Minimise hardware costs by opting for a cloud-based solution like Assetminder. Secondly, detail ongoing costs post go-live such as licencing, upgrades, and maintenance. Cloud-based vendors usually roll all ongoing costs up into the annual licence fee. Finally, calculate the costs of the devices used to access the system such as phones, tablets, and computers. Some of Assetminder’s clients offer a phone stipend for drivers that use their own personal devices. That way the organisation doesn’t have to worry about replacement devices or data plans, nor does the driver need to carry multiple devices.

 

Step 5 – Outline the Key Benefits

The project benefits must be tied back to the business driver. Many of the key benefits associated with a CMMS are outlined in our 9 benefits of fleet maintenance software article on the Assetminder website. For example, if the key driver for the project is to digitise pre-trip inspections, this section would outline the key advantages of going mobile with a CMMS. If the driver is safety related, outline the ways CMMS software will improve health and safety.

Outline the benefits that best match the business challenge at your organisation and include them in your business case for CMMS software.

 

Step 6 – Identify any Risks

Detail any known risks that could derail the project such as a key project resource leaving the organisation. Not all risks will be known ahead of time so manage the known risks. List out the risks, the consequences of the risk, and the plan to mitigate, transfer or avoid the risk. There may also be an opportunity to exploit the risk and turn it into an opportunity.

Step 7 – Outline the Required Resources

The resources section details the human, equipment, and location resources required to carry out the tasks in the CMMS project. Most organisations don’t have the expertise in-house to properly implement a CMMS so utilise the vendor’s project resources where possible. Cloud-based CMMS vendors make their money from software licences, so it is in their best interest to get the customer configured correctly out of the gate. That way they are more likely to secure licence revenue long term. Typical project resources include:

Internal External Other

Project champion

Resource to gather data

Vendor consultant

Trainer

Training/conference room

Training laptops

 

Step 8 – Conclusion Section

The conclusion is a short summary of the business case for CMMS software. Build confidence in the proposed solution by clearly summarizing the business case and the team’s recommendation to satisfy the business challenge.

 

The bottom line on creating a business case for CMMS software

In these challenging times, creating a business case for CMMS software should be easier than ever for any organisation looking to cut costs. The difficulty is convincing the finance folks to save money by spending it. If you follow the 8 steps above, it will be easy to produce a simple business case to justify a CMMS at your organisation. Once the business case is signed off, secure the funding quickly while the proposal is fresh.

 

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