Maintenance managers know that maintenance costs affect the organization’s bottom line both directly (i.e., money spent) and indirectly by preventing additional expenditures (i.e., money saved).
Anna started with reports from her MPulse CMMS software to put solid numbers behind her request. This CMMS data became her most powerful negotiating tool.
Anna set out to answer three big questions…
- What’s the purchase price of this request?
- What are the installation and ongoing costs?
- What are the potential savings?
The first two questions are straightforward. A little research can help Anna estimate the purchase price as well as any installation or ongoing costs.
The third question, however, is more important. How much could her organization potentially save with this purchase?
Return on Investment
Managers and bean counters love to talk about return on investment (ROI), so maintenance managers like Anna need to speak the same language.
ROI measures the gain or loss generated on an investment relative to the amount of money invested. ROI is expressed as a percentage to compare the efficiency of the investment.
The formula is: ROI = (Net Profit / Cost of Investment) x 100
Anna kept it simple by using MPulse to show the current labor hours and inventory costs for a specific task in relation to all labor hours. She could estimate the time savings, and then calculate the ROI for her managers.
With solid data and accurate reports, your organization can make good decisions based on hard evidence, which will improve its ability to compete effectively and efficiently.