Return on Investment – People or Technology?


When we are making an investment in any type of improvement program, there is usually a return on investment calculation that is provided to executive management to secure the funding for the project. The investment is usually straightforward to calculate – but what about the return?
What produces the return on the investment? Is it a direct reduction in cost? It could be, if for example, it was an investment is some technology that directly reduced energy costs. However, what about a new CMMS/EAM system? Is calculating the return on that investment as clear? You would only have to review surveys such as conducted by ReliabilityWeb to get your answer. The majority of companies feel they never realized the projected return on investment for their CMMS/EAM systems. Why is this the case?

It is because the CMMS/ EAM system requires changes in behaviors, both from the organization and employees if it is to produce a return on investment. For example, a typical part of the ROI on a CMMS/EAM system is increased labor productivity for the maintenance technicians. However, if the organization continues to be reactive, does not implement and execute a preventive maintenance program, does not implement good planning and scheduling processes, then nothing really changes. No savings is realized, since the organizational behavior did not change.

Just purchasing technology does not produce a return on investment. Unless organizational processes are developed and enforce and the people in the organization change their behaviors to conform to the new processes, we only have the investment – not the return.

So if we are going to have a return on investment for technology in maintenance and reliability, we need to focus on helping the people in the organization change their work processes to fully utilize the technology. If the technology is the investment, then the people provide us the return on that investment.

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