How to Measure CAFM ROI

By Devon Maresco
Marketing Coordinator
SpaceIQ

As companies begin to see the value of a Computer-Aided Facility Management (CAFM) platform, demand for the features it offers is on the rise. But before executive stakeholders green light buy-in for new software and the potential expenses that come with it, they need to understand the opportunity for CAFM ROI.

Communicating the benefits of a CAFM platform in dollars and cents isn’t always easy. For one, it means quantifying many aspects of facilities in terms of cost—aspects you might not track yet. It also means introducing new opportunities for top- and bottom-line savings that, at this point, are theoretical.

Facility managers need to take the time to contextualize features and benefits into real dollars, to sell the C-suite and other stakeholders on CAFM ROI. Here’s how to get started.

Introduce CAFM and new metrics

First, introduce this new technology to stakeholders. What is CAFM? What does it do? Why would the company benefit? Conquer the learning curve with simple, succinct, value-driven explanations of what CAFM is and how it applies to the workplace experience. Then, use these benefits as a jumping off point for qualifying new metrics.

Introducing new metrics accomplishes two things. First, it shows stakeholders that you have the means of tracking ROI already established. Second, it gives insight into how you’re measuring ROI and where those returns will come from. For example, if you point to CAFM as a tool for asset tracking, you can also point to metrics that gauge (and lower) total cost of ownership.

This introduction of the software and its metrics is a crucial first step in selling stakeholders on the investment. It shows a forward-thinking mindset that’s rooted in ROI.

Identify bottom-line cost savings

In showcasing the benefits of CAFM software, start with bottom-line savings. How can this platform help your organization do what it’s already doing, but more efficiently? This argument for ROI is particularly powerful, because it shows focus on improvement. The ask isn’t related to untapped opportunities—it’s related to optimization of known variables. Some of the ROI areas to focus on include:

• Centralized, validated data insights
• Reporting of defensible data
• CAD capabilities for floor planning

These tools in particular integrate into aspects of operation many companies are already engaged in—and already-observed metrics. For example, it’s easy to explain the ROI of CAFM data when it informs energy conservation, driving lower utility costs.

Gather one or two specific examples for stakeholders. Demonstrate how specific CAFM features create bottom line savings, within the context of real dollars and costs.

Identify top-line revenue opportunities

CAFM software needs to do more than create cost-savings to offer justified investment. It also needs to create new revenue opportunities. Here, the formula for proving ROI is the same. Pick features from the software and connect them to theoretical opportunities to show diverse application for this investment. Some key areas to consider include:

• Space planning and management
• Capital project management
• Building operations
• Asset management
• Environmental and risk management

Presenting opportunities for new revenue requires more imagination, but the approach is similar to showing bottom-line savings. Show that you’ve done the legwork to create revenue before the investment. For example, provide figures about how CAFM capital project management can facilitate a new data center buildout that saves the company hosted cloud costs year-over-year.

Something to remember when presenting top-line ROI opportunities is that it’s all theoretical. Use meaningful data to inform your hypothesis and presentation, and make it clear that you’re working from projections. Nevertheless, strive to illustrate value.

Use real numbers and projections

Calculating CAFM ROI can be difficult without real numbers to source for benchmarks. Before you make the investment, spend time getting familiar with workplace costs at both macro and granular levels. While the purpose of CAFM software is to make these numbers more accessible, it helps to have a fundamental understanding of what, specifically, you’re looking at and why it’s important.

As facility managers present use-cases and arguments for ROI, use real numbers and projections to inform these arguments. How much money will a shift to preventive maintenance save you compared to unanticipated repair costs for a specific asset? What’s your cost per head in current floor plan vs. a target cost with a more efficient space layout? Use examples like these and their real costs, as well as targets and projections that make the case for CAFM ROI.

Build a case for long-term ROI

Presenting the case for a large investment in CAFM and other smart facility software is an uphill battle. It’s not that these innovations aren’t useful—it’s that they have short-term costs and long-tail benefits. It takes a forward-thinking mindset to make long-term investments in spite of short-term costs. And while many executive leaders are willing to make that investment, they need to understand the long-term ROI. Facility managers need to provide that context.

If you’re in a position to pitch leaders on a CAFM investment, take a quantifiable stance and prove the investment is worth the outcome. If the money adds up with good reasoning behind it, it’s difficult for leaders to say no—especially when the ROI is attainable, quantifiable, and valuable.

Keep reading: How Can Smart CAFM Improve Employee Experience?