Last month I wrote about the use of technology by the many manufacturers and suppliers of many of the tools used in the ski area industry as well as how many ski areas are utilizing technology in mountain operations. This post is an update on that theme being more specific in how to put the value on the use of technology, going digital.
Getting people on board with change isn’t always easy.
This is especially true in the ski industry, where many people still rely on paper forms without showing much interest in embracing maintenance management software like computerized maintenance management systems such as MountainOffice, a CMMS.
Many times, lift and vehicle maintenance managers stick with paper forms for four reasons:
- They don’t think their employees can use and they don’t want to train employees on new technology and processes.
- They’ve had issues working with electronic or mobile forms before.
- They need a solution that works in the office and out in the field.
- They don’t want to pay for all the features when the ski area will only use a few of them.
Figuring out the return on investment (ROI) of a CMMS can help you show the value of the solution and gain buy-in from senior management. Here’s what you need to know about calculating the ROI of a CMMS.
No two ski areas are exactly the same, which means you must understand your ski area’s current processes and strategies to get a grasp on the benefits of bringing in a CMMS.
To do this, you should measure key performance indicators (KPIs) of your assets over time. This can include:
- Tracking downtime of an asset and how that impacts productivity and revenue
- Tracking amount of PM work versus downtime reaction work – see item 5 below
- Inventory tracking and organization
- An asset’s actual lifespan versus its expectancy
Pro tip: The more data you review, the better you’ll understand your bottom line. If the historical data isn’t available, you should measure these KPIs for at least six months to a year to get an accurate view of your assets’ performance. Then, you should answer the following five questions to get a good idea of how different CMMS features can improve performance and maintenance processes:
- What data/reports would make the job easier?
- What info and reports do lift inspectors and insurance inspectors ask for?
- What information does your supervisor consistently ask for?
- Where is most of your maintenance budget going?
- What’s your desired planned maintenance (PM) to corrective maintenance (CM) ratio?
Calculating the ROI
To accurately calculate the ROI of MountainOffice, you must determine the total cost of ownership and the value of the maintenance solution.
Total cost of ownership
The total cost of ownership involves adding all the initial costs of implementing the CMMS to the long-term costs of maintaining the solution. When deciding which CMMS to invest in, be sure to ask questions about the following costs:
- Initial software or license price
- Additional hardware and software required
- Solution implementation services and support
- User and administrator training
- Long-term support and upgrades (MountainOffice includes in subscription price or in annual fee depending on your choice of purchase)
- License renewal fees (MountainOffice includes in subscription price or in annual fee depending on your choice of purchase)
The value of MountainOffice is easy to see, and implementing can lower business costs. However, to get a full grasp on the value MountainOffice can bring to your company, you should look at the following metrics:
- Asset lifespan – estimated number of years you expect to extend an asset’s life cycle
- Overtime – average of hourly labor (including overtime) wasted
- Inventory – average amount of time lost due to insufficient inventory
- Utilities – amount of budget spent on utilities versus the expected costs when utilities run at peak efficiency
- Productivity – amount of time spent on tasks like scheduling and work order management
- Document management efficiency – how long it takes to create, file, copy, search for and retrieve critical documents
MountainOffice offers many beneficial features that can improve your current workflows and efficiency. Using these metrics to determine the potential value MountainOffice can bring to your ski area will help convince a maintenance manager to use one.
Once you have the costs and value determined, you can put the measurements into this formula:
CMMS ROI = (Value – Costs) / Cost
Here is a link to a PDF of a template used to calculate ROI for MountainOffice:
The positive effect
Calculating the ROI can help you show the value MountainOffice and justify the costs of purchase to gain support from senior management. We believe that there are additional non-monetary benefits that we will discuss in another post. But, to get you thinking, consider the impact on the staff of improving organization and enabling transparency and accountability. What are those benefits?