A Forrester Total Economic Impact™
Study Commissioned By UpKeep
February 2020
The Total Economic Impact™ Of UpKeep
Cost Savings And Business Benefits Enabled By The CMMS/EAM Solution UpKeep
Table Of Contents Executive Summary 1
Key Findings 1
TEI Framework And Methodology 4
The UpKeep Customer Journey 5
Interviewed Organization 5
Key Challenges 5
Solution Requirements 6
Key Results 6
Analysis Of Benefits 7
Time Savings In Filing Work Orders And Locating Asset Information 7
Savings From Avoided Production Downtime 8
Savings From Avoided Time Spent On Unplanned Work 11
Time Savings Toward Creating Asset Reports 13
Unquantified Benefits 14
Flexibility 14
Analysis Of Costs 15
UpKeep Training Costs 15
UpKeep Subscription Costs 16
Financial Summary 17
UpKeep: Overview 18
Appendix A: Total Economic Impact 19
Project Director:
Corey McNair
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1 | The Total Economic Impact™ Of UpKeep
Executive Summary
For decades, businesses handled enterprise and asset management with
pen and paper record keeping. This process often lent itself to
documentation errors including oversights in note-taking and missing
paper trails on asset performance. The rise of computerized maintenance
management systems (CMMS) and enterprise asset management (EAM)
solutions over the past decade is enabling factories to expedite the logging
of asset information and reliably track resources.
UpKeep, a CMMS/EAM solution, provides a centralized digital record for
facilities to file work orders, log asset information, monitor parts and
inventory, and track asset performance. This information is accessible
over mobile devices, allowing users to access asset records while dealing
with their equipment firsthand.
UpKeep commissioned Forrester Consulting to conduct a Total Economic
Impact™ (TEI) study and examine the potential return on investment (ROI)
enterprises may realize by utilizing UpKeep. The purpose of this study is to
provide readers with a framework to evaluate the potential financial impact
of UpKeep on their organization.
To better understand the benefits, costs, and risks associated with this
investment, Forrester interviewed employees from one company with
extended experience using UpKeep.
Prior to deploying UpKeep, the company did not have a formal system in
place for recording asset information and preventative maintenance. The
organization relied on sticky notes posted on white boards for technicians
to review and apply preventative maintenance tasks to assets. This
process limited the organization’s ability to create comprehensive reports
on asset health, which led to production downtime occurrences, lost
records, and hours of unplanned work.
Since deploying UpKeep at seven of its facilities across North America, the
organization has improved asset record keeping by allowing facility
technicians to immediately upload asset information on their mobile
devices and then find the information quickly with the application — saving
hours in time spent looking for asset information on sticky notes. Improved
record keeping is helping technicians to assess which assets need
preventative work, reducing the number of downtime occurrences and time
spent on unplanned work.
Key Findings
Quantified benefits. The interviewed organization experienced the
following risk-adjusted present value (PV) quantified benefits over three-
years:
› Technicians were able to reduce time spent on filing work orders
and locating asset information by 90%. UpKeep’s integration mobile
devices reduced time spent by technicians traversing the facility floor to
their workstations to record notes on asset information or file work
orders. Likewise, technicians reduced time spent on retrieving asset
information by having the information accessible on mobile devices.
Key Benefits
Time savings in filing work orders and locating asset information:
$511,141
Savings from avoided production downtime:
$683,391
Savings from avoided time spent on unplanned work:
$157,477
2 | The Total Economic Impact™ Of UpKeep
› The organization was able to increase preventative work on its
assets by 50% to help avoid production downtime. Historically, the
organization struggled with technicians consistently logging asset
information for other technicians to review. As the organization logged
more assets into UpKeep, it improved monitoring of asset performance
and cadence for preventative maintenance. Because of this, the
organization reduced production downtime and any resulting lost
business.
› Savings of over 3,000 hours for unplanned reactive maintenance
work. With the organization conducting more preventative maintenance
work on assets, fewer asset failures occurred. Each of those asset
failures required time to ensure that the problem was resolved. With
fewer downtime events since adopting UpKeep, technicians avoided
more unplanned work sessions and were able to focus on proactive
preventative and predictive maintenance.
› Time spent on collecting asset information for monthly reports
took 90 minutes. Before UpKeep, monthly reports on the status of
assets took time to collect across seven facilities and totaled hundreds
of hours annually. The organization drastically reduced time spent on
this task with asset information regularly being logged into UpKeep
through better reporting and dashboards.
Unquantified benefits. The interviewed organization experienced the
following benefits, which are not quantified for this study:
› Maximization of asset lifetime. With UpKeep helping the organization
to stay up to speed and ensure preventative maintenance compliance,
many assets experienced reduced wear and tear, and did not
experience unexpected early failure. The manufacturer was able to store
warranties to prevent excess work for its internal team and track which
assets were still under warranty.
› UpKeep provided technicians with a digital paper trail on assets.
The organization now has readily accessible asset history, which helps
to educate technicians on the status of their facilities and in planning for
future initiatives based on past performance.
Costs. The interviewed organization experienced the following risk-
adjusted PV costs:
› UpKeep training costs. Twelve facility managers spent two days
learning how to use UpKeep and best practices for their day-to-day
work. The company also paid for training services from UpKeep itself.
› UpKeep Subscription costs. The organization paid a monthly fee per
user for access to UpKeep.
Forrester’s interview with an existing customer and subsequent financial
analysis found that the interviewed organization experienced benefits of
$1,375,379 over three years versus costs of $331,189 of 315%.
ROI 315%
Benefits PV $1.4 million
NPV $1.0 million
Payback <3 months
3 | The Total Economic Impact™ Of UpKeep
$511.1K
$684.0K
$157.5K
$22.8K
Time savings in filingwork orders andlocating asset
information
Savings fromavoided production
downtime
Savings fromavoided time spenton unplanned work
Time savings towardcreating asset
reports
Benefits (Three-Year)
Total benefits PV,
$1.4M
Total costs PV, $331K
Initial Year 1 Year 2 Year 3
Financial Summary
Payback period:
<3 months
4 | The Total Economic Impact™ Of UpKeep
TEI Framework And Methodology
From the information provided in the interview, Forrester has constructed a
Total Economic Impact™ (TEI) framework for those organizations
considering implementing UpKeep.
The objective of the framework is to identify the cost, benefit, flexibility, and
risk factors that affect the investment decision. Forrester took a multistep
approach to evaluate the impact that UpKeep can have on an organization:
DUE DILIGENCE Interviewed UpKeep stakeholders and Forrester analysts to gather data relative to UpKeep.
CUSTOMER INTERVIEW
Interviewed one organization using UpKeep to obtain data with respect to costs, benefits, and risks.
FINANCIAL MODEL FRAMEWORK
Constructed a financial model representative of the interview using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewed organization.
CASE STUDY Employed four fundamental elements of TEI in modeling UpKeep’s impact: benefits, costs, flexibility, and risks. Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
The TEI methodology
helps companies
demonstrate, justify,
and realize the
tangible value of IT
initiatives to both
senior management
and other key
business
stakeholders.
DISCLOSURES
Readers should be aware of the following:
This study is commissioned by UpKeep and delivered by Forrester Consulting.
It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other
organizations will receive. Forrester strongly advises that readers use their own
estimates within the framework provided in the report to determine the
appropriateness of an investment in UpKeep.
UpKeep reviewed and provided feedback to Forrester, but Forrester maintains
editorial control over the study and its findings and does not accept changes to
the study that contradict Forrester’s findings or obscure the meaning of the
study.
UpKeep provided the customer names for the interviews but did not participate
in the interviews.
5 | The Total Economic Impact™ Of UpKeep
The UpKeep Customer Journey
BEFORE AND AFTER THE UPKEEP INVESTMENT
Interviewed Organization
For this study, Forrester conducted an in-depth interview with a national
reliability manager and local reliability manager at a manufacturing
company that uses UpKeep.
› The manufacturer is based in North America, has an annual revenue
of $500 million, and has more than 1,000 employees.
› The manufacturer has 125 technicians across seven facilities who
use UpKeep.
› The manufacturer did not have an asset management platform in
place before UpKeep, and it kept track of assets or work orders with
sticky notes, emails, text messages, or spreadsheets. To improve
tracking of its assets, the organization evaluated competitors in the
space and determined that alternatives to UpKeep wouldn’t be as
flexible for enabling accessibility across mobile devices.
Key Challenges
The interviewees from the organization shared the following issues and
challenges:
› Instituting an asset management process across multiple
facilities. The manufacturer has seven facilities and did not have an
established method for tracking assets, downtime, or reactive and
preventative maintenance. Technicians used a variety of means for
communication including, sticky notes, text messages, and emails.
Meanwhile, aggregating this information into a performance report
required technicians to spend time tracking this information. As a
result, asset information and work orders would go unnoticed or
unreported, which led to production downtime.
› Inefficiency in usage of technicians’ time. With frequent
occurrences of production downtime, technicians had to spend time
locating the information needed to repair an asset, then fix the asset,
and then work to prevent the issue from reoccurring. Over the course
of remediating issues, technicians would go back and forth between
the assets and their computers for information, creating further
inefficiency. Considering that many of these issues would occur on a
daily basis, technicians were often unable to complete other day-to-day
tasks they needed to address.
› Lack of a paper or digital trail on asset records. When technicians
had to check on the history of assets, they often did not have any
background on the assets because they weren’t logged. Although the
organization began to modernize by using spreadsheets to track
information, technicians still needed to remember to enter the
information by the time they got back to their computers from the
facility floor.
Key Factors
North American manufacturer
$500 million annual revenue
Seven facilities
125 UpKeep users
“In the past, asset feedback
would go from word of mouth
to either emails, texts, or sticky
notes. Because of that
inefficiency at communication,
work orders wouldn’t get done
and slipped through the
cracks.”
National reliability manager,
manufacturer
6 | The Total Economic Impact™ Of UpKeep
Solution Requirements
The interviewed organization searched for a solution that could:
› Store all asset information from the organization’s facilities in one
centralized location.
› Provide an easy-to-understand interface that could be integrated and
accessed on any mobile device at the facilities.
› Provide strong customer service and prioritize the needs of the
organization for maintenance assistance.
Key Results
The interview revealed that key results from the UpKeep investment
include:
› The manufacturer established continuity in asset management
across facilities. Technicians at each facility became familiar with the
UpKeep system and knew where to log asset information or work
orders and where to collect that information. If alerts or messages
need to be delivered, they are sent through the UpKeep platform and
do not go missing.
› Technicians improved efficiency toward managing assets and
work orders. After adopting UpKeep, technicians identified key assets
that needed preventative maintenance and they were able to avoid
spending hours of time on unplanned work. When reporting on assets,
technicians further saved time by logging information on mobile
devices they had on hand, which effectively removed time spent
traveling from the facility floor to their work desks.
› UpKeep provided an established paper trail of asset history. Going
forward, the organization logged all of its asset information in one
place and employees could refer to it when needed. In the case of
maximizing asset lifetime value, the organization could readily see how
long an asset had been in use and assess when a replacement would
be needed. Facilities could also draw upon the information to answer
any questions about potential Occupational Safety and Health
Administration (OSHA) audits.
“How long it takes now to file a
work request is almost
instantaneous. From when it’s
filed, colleagues within the
plant receive alerts on their
mobile devices and we’re able
to look at the request and then
triage it.”
Local reliability manager,
manufacturing
“UpKeep is the means that
allows us to utilize the tools
that we’ve got to reduce
downtime on assets.”
Local reliability manager,
manufacturing
“The focus of us for adopting
the solution was to have all of
our workflow going through
one system.”
National reliability manager,
manufacturing
7 | The Total Economic Impact™ Of UpKeep
The table above shows the total of all benefits across the areas listed below, as well as present values (PVs) discounted at 10%. Over three years, the interviewed organization expects risk-adjusted total benefits to be a PV of nearly $1.4 million.
Reduced time spent filing work orders and locating asset information by 90%
Analysis Of Benefits
QUANTIFIED BENEFIT DATA
Time Savings In Filing Work Orders And Locating
Asset Information
Enterprise asset management platforms are only as helpful as the data is
accessible. When the interviewed manufacturer looked at other
enterprise asset management platforms, it saw that accessibility to asset
information over various mobile devices could take time to build as a
custom integration or application. Accessibility to UpKeep over mobile
devices was a key feature for justifying adoption of the platform.
Before UpKeep, technicians at the organization would often leave work
orders on sticky notes and send asset information over emails for
technicians to review. As the facilities began to modernize, technicians
started putting asset information into spreadsheets. These processes
proved inefficient as technicians who worked on the floor of facilities
would either have to go back to their computer stations to file information
or track down notes on assets (if they had even been filed). The national
reliability manager said, “The yellow sticky notes actually work pretty well
if you have the right level of discipline. But if someone brushes by them
on a board and knocks them off, the notes are out of order.”
UpKeep enabled workers to log or retrieve asset information and work
orders from any mobile devices they carried around facilities. In addition,
technicians no longer had to track to down colleagues to ask questions
about asset information. Instead, they could do it directly with their
mobile devices while looking at the information.
UpKeep significantly reduced time spent on the busywork of managing
asset information that prevented other work from getting done. The local
reliability manager shared, “We prioritized having a mobile application for
our technicians that could allow them to take notes while in the field and
take pictures, measurements, and data without having to go back to a
terminal or turn in a piece of paper. We don’t have bandwidth from
staffing to do that, and UpKeep helped us achieve all of that.”
Total Benefits
REF. BENEFIT YEAR 1 YEAR 2 YEAR 3 TOTAL PRESENT VALUE
Atr Time savings in filing work orders and locating asset information
$205,538 $205,538 $205,538 $616,613 $511,141
Btr Savings from avoided production downtime
$168,000 $288,720 $389,520 $846,240 $683,991
Ctr Savings from avoided time spent on unplanned work
$39,200 $66,024 $89,544 $194,768 $157,477
Dtr Time savings toward creating asset reports
$9,156 $9,156 $9,156 $27,468 $22,770
Total benefits (risk-adjusted) $421,894 $569,438 $693,758 $1,685,089 $1,375,379
8 | The Total Economic Impact™ Of UpKeep
Impact risk is the risk that the business or technology needs of the organization may not be met by the investment, resulting in lower overall total benefits. The greater the uncertainty, the wider the potential range of outcomes for benefit estimates.
Modeling and assumptions:
› Technicians at the organization spend one hour per day filing and
locating asset information or placing work orders.
› Since adopting UpKeep, each of the 125 users have reduced time
spent filing work orders and logging and retrieving asset information by
90% as it is accessible through one centralized location over mobile
devices.
› The fully burdened hourly rate of facility technicians is $35, and they
are present for 261 working days annually (excluding weekends).
› The productivity recapture is 25% with workers rededicating that time
to additional work-driven activities.
Variations to benefit results:
› The demographics of an organization will impact the scale of the
benefit depending on company size, industry, and number of assets
and facilities managed.
To account for these variations, Forrester adjusted this benefit downward
by 20%, yielding a three-year risk-adjusted total PV of $511,141.
Savings From Avoided Production Downtime
The interviewed manufacturer tracks a key metric: its reactivity to
production downtime occurrences and time spent to fix these issues. It
calculated this by weighing the number of occurrences of downtime
annually against the total number of assets and the associated
remediation time. Alongside those operational costs, production
downtime costs are a significant factor for organizations when assets fail.
The national reliability manager said, “Any sort of reactive downtime
event has a cost tied to the types of products created through certain
assets, frequency of utilization, and the opportunity cost of lost sales.”
Since adopting UpKeep, the organization has been able to keep track of
which assets need preventative maintenance and establish a cadence
for asset maintenance. As a result, it improved its reactivity rate. “We’re
at the point now where we have a much more efficient workflow, a much
Time Savings In Filing Work Orders And Locating Asset Information: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
A1 Numbers of technicians across facilities Interviews 125 125 125
A2 Time spent on filing work orders and locating asset information per day (hours)
Interviews 1 1 1
A3 Reduction in time spent filing work orders and locating asset information
Interviews 90% 90% 90%
A4 Fully burdened hourly rate of facility technician
Assumption $35 $35 $35
A5 Productivity recapture Assumption 25% 25% 25%
At Time savings in filing work orders and locating asset information
A1*A2* 261 working days *A3*A4*A5
$256,922 $256,922 $256,922
Risk adjustment ↓20%
Atr Time savings in filing work orders and locating asset information (risk-adjusted)
$205,538 $205,538 $205,538
9 | The Total Economic Impact™ Of UpKeep
three-year benefit PV
$683,991
Savings from avoided production downtime: 50% of total benefits
more efficient method of communication, and we’re able to couple that
with an optimized preventative maintenance program. It’s with UpKeep
that we can have more confidence that the right work is getting done.”
The interviewees indicated their tracking of asset performance and
reduction in unplanned failures were being used to validate the efficiency
of their work plan and UpKeep itself. Since it takes time to prove that
assets are performing reliably and not experiencing any hiccups, it took
several months to more than a year to validate for assets.
Modeling and assumptions:
› 1-hour production downtime occurrences: The organization has 3,500
occurrences of 1-hour production downtime occurrences annually,
representing 500 occurrences per facility annually.
› Costs for downtime related to products created, usage of asset, and
lost sales total $300.
› In Year 1, technicians begin adding asset information to UpKeep and
assess which ones need preventative maintenance. They conduct
maintenance on 40% of those assets. By Year 2, the organization has
all of its assets logged in UpKeep and conducts preventative
maintenance on 50% of those needing assistance. By Year 3, with
more assets performing reliably and fewer occurrences of downtime,
technicians are able to conduct any level of preventative maintenance
(e.g., quick updates, extended remediation) on 60% of assets that
require it.
› Even with preventative maintenance, downtime can still occur because
some assets don’t perform as expected or work orders aren’t being
completed as written. In Year 1, the preventative work helps to avoid
50% of related downtime occurrences. By Year 2, preventative work
helps to avoid 66% of the related downtime. By Year 3, with assets
performing more reliably across most of the facilities and more work
order instructions being correctly completed, preventative work helps
to avoid three-quarters of related downtime occurrences.
› Major production downtime occurrences: Across all of the facilities, the
organization faces two major occurrences of production downtime
where it must order replacement parts. These outages on production
last up to two days as technicians create workarounds until
replacement pieces arrive.
› Costs for major production downtime related to products created,
usage of asset, and lost sales totals $900.
› With UpKeep, facilities can conduct preventative work on all of the
major assets that may experience downtime by Year 2. After
preventative maintenance is done, the facilities can still experience at
least one major outage on an annual basis.
10 | The Total Economic Impact™ Of UpKeep
Variations to benefit results:
› If an organization is already using an enterprise asset management
platform, the level of improvement on production downtime may vary
based on previous experience.
› With regular updates to assets, the number requiring preventative work
can fall over time. According to the national reliability manager, “We
measure internally the number of work order requests being generated
by our production team to calibrate systems, and we saw that number
incline steadily over months. Eventually, we expect it to plateau and
decline as we’ll be reducing the number of issues that have occurred.”
To account for these variations, Forrester adjusted this benefit downward
by 20%, yielding a three-year risk-adjusted total PV of $683,991.
Savings From Avoided Production Downtime: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
B1 Number of 1-hour production downtime occurrences annually
Interviews 3,500 3,500 3,500
B2 1-hour production downtime cost Interview $300 $300 $300
B3 Percentage of assets on which preventative work is performed after adopting UpKeep
Assumption 40% 50% 60%
B4 Percentage of preventative work that helps to prevent downtime
Assumption 50% 66% 75%
B5 Avoided cost of lost production from 1-hour production downtime occurrences
B1*B2*B3*B4 $210,000 $346,500 $472,500
B6 Number of major production downtime occurrences per year
Assumption 2 2 2
B7 Average length of downtime (days) Interview 16 16 16
B8 Downtime production cost per hour for major asset failure
Interview $900 $900 $900
B9 Percentage of major assets on which preventative work is performed after adopting UpKeep
Interview 0% 100% 100%
B10 Percentage of preventative work that helps to prevent major asset downtime
Interview 0% 50% 50%
B11 Cost of lost production from major asset downtime
B6*B7*B8 *B9*B10
$0 $14,400 $14,400
Bt Savings from avoided production downtime B5+B11 $210,000 $360,900 $486,900
Risk adjustment ↓20%
Btr Savings from avoided production downtime (risk-adjusted)
$168,000 $288,720 $389,520
11 | The Total Economic Impact™ Of UpKeep
Savings From Avoided Time Spent On Unplanned
Work
Alongside the production costs incurred by asset downtime, there are
costs for technicians to resolve the problems. Technicians can spend
hours to days on reactive work depending on the severity of the failure,
the amount of time associated with fixing the issue, and time spent
planning to prevent it from happening again. Although technicians try to
account for time to deal with unplanned work on a daily basis, the high
frequency of downtime occurrences can eventually impact employee
efficiency.
The local reliability manager relayed, “Downtime occurrences was
information I wanted to capture. I wanted to know about every single
headache or thorn in the production side that was slowing them down
from 100% efficiency. I could then properly prioritize work for the
maintenance techs in order to get us on the path toward 100%
efficiency.” By using UpKeep to manage preventative maintenance
orders, technicians were able to avoid asset failures and dealing with
thousands of hours of unplanned work.
Modeling and assumptions:
› 1-hour production downtime occurrences: For each of the 3,500 1-hour
production downtime occurrences, one technician is tasked with
resolving those problems. It usually takes two hours to fix the asset,
review what caused the problem, and plan for it to not happen again.
› As the level of preventative work on assets ramps up over three years,
the organization can avoid the percentage of unplanned work that
would have taken two hours away from a technician each time.
› Major production downtime occurrences: Time spent on major
production downtime occurrences last roughly two days and require
three technicians to address the issue. Preventative work helps the
technicians avoid spending time on unplanned work for one of these
occurrences.
Variations to benefit results:
› The average amount of time spent on unplanned work will vary by
organization and type of work required of facility technicians. Likewise,
the frequency of occurrences of unplanned work at facilities will vary
and impact the total savings.
To account for these variations, Forrester adjusted this benefit downward
by 20%, yielding a three-year risk-adjusted total PV of $157,477.
Year 1: 1,400 hours
avoided in unplanned
work
Year 3: 3,198 hours
avoided in unplanned
work
12 | The Total Economic Impact™ Of UpKeep
Savings From Avoided Time Spent On Unplanned Work: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
C1 Number of 1-hour production downtime occurrences annually
A1 3,500 3,500 3,500
C2 Number of employees fixing assets Interviews 1 1 1
C3 Time spent on unplanned work per occurrence (hours)
Interviews 2 2 2
C4 Fully burdened hourly rate of facility technician Assumption $35 $35 $35
C5 Percentage of equipment on which the facility can conduct preventative work
A3 40% 50% 60%
C6 Percentage of preventative work that helps to avoid unplanned work
A4 50% 66% 75%
C7 Savings from avoided time spent on unplanned work
C1*C2*C3*C4*C5*C6
$49,000 $80,850 $110,250
C8 Number of major production downtime occurrences per year
Interviews 2 2 2
C9 Number of employees fixing assets 3 3 3
C10 Time spent on unplanned work per major asset failure (hours)
Interviews 16 16 16
C11 Percentage of assets on which preventative work is performed after adopting UpKeep
A9 0% 100% 100%
C12 Percentage of preventative work that helps to avoid unplanned work
A10 0% 50% 50%
C13 Savings from avoided time spent on unplanned work for major asset downtime
C8*C9*C10*C11*C12*C4
$0 $1,680 $1,680
Ct Savings from avoided time spent on unplanned work
C7+C12 $49,000 $82,530 $111,930
Risk adjustment ↓20%
Ctr Savings from avoided time spent on unplanned work (risk-adjusted)
$39,200 $66,024 $89,544
13 | The Total Economic Impact™ Of UpKeep
UpKeep helps avoid nearly 55 hours per month of creating asset reports.
Time Savings Toward Creating Asset Reports
Before UpKeep, monthly reporting on asset performance across the
organization’s seven facilities was inconsistent. Reviews would take
upwards of a day at each facility and typically happened after a string of
assets experienced technical errors, resulting in frustrated and
unconstructive conversations.
The local reliability manager explained, “The process would go with
someone calling facilities and asking, ‘Did you get all of your preventative
maintenance done this month?’ I’d ask around internally if it was done,
and someone would say, ‘Yeah.’ So, there wasn’t a level of scrutiny on
accountability to back that up. Now a manager can look up that
information, doesn’t have to call anyone, and knows exactly where we
are.”
The back and forth conversations between facilities to assess the work
done on assets could take hours, according to the interviewee who said
time spent was effectively removed. Although the benefit is small in cost
savings relative to the other benefits, the reliability managers noted that it
helps make conversations about asset performance more objective-
focused. The national reliability manager said, “What we have now is a
monthly objective review where I’m able to export the plant’s planned
work and then also do an export of the previous month’s work and do a
comparison of whether or not the plan that was agreed upon got done.”
Modeling and assumptions:
› The organization files one report on asset performance per month.
One person at each facility is tasked with collecting information on
each of the assets for the report. This takes one day to complete.
› With UpKeep, collecting all of the information into one report now takes
90 minutes, resulting in a time difference of 654 hours.
› The fully burdened hourly rate of facility technicians is $35.
› The productivity recapture is 50% as a result of workers nearly
retaining a day to spend on day-to-day work activities.
Variations to benefit results:
› This benefit will vary for organizations based on the number of asset
reports created annually. In addition, the number of facilities and
assets accounted for will influence the amount time spent on putting
together the report.
To account for these variations, Forrester adjusted this benefit downward
by 20%, yielding a three-year risk-adjusted total PV of $22,770.
14 | The Total Economic Impact™ Of UpKeep
Flexibility, as defined by TEI,
represents an investment in additional capacity or capability that could be turned into business benefit for a future additional investment. This provides an organization with the "right" or the ability to engage in future initiatives but not the obligation to do so.
Unquantified Benefits
In addition to the quantified benefits above, the interviewed manufacturer
experienced additional benefits that were not quantified, including:
› Using UpKeep to improve asset lifetime. By having a log of the
entire history of an asset and its performance, technicians can conduct
necessary maintenance on asset wear-and-tear to preserve its lifetime
for usage. The interviewed manufacture was only beginning to see the
benefits of assets performing to their expected lifespan. The local
reliability manager said, “Reliability thinking says that the lifetime of an
asset is what it is. There’s nothing you can do about it. But you can
detract [from its lifespan] by improper maintenance practices. I would
say that we are optimizing the efficiency and the utilization of those
during the lifespan.”
Flexibility
The value of flexibility is clearly unique to each customer, and the
measure of its value varies from organization to organization. There are
multiple scenarios in which a customer might choose to implement
UpKeep and later realize additional uses and business opportunities,
including:
› UpKeep provides a paper trail when undergoing an OSHA audit.
The interviewed organizations did not regularly experience OSHA
audits, as they only occurred when someone filed a complaint about
their facility and fines were likely to be levied. However, in the case that
an audit would happen, the interviewees noted that UpKeep would be
helpful for record-keeping purposes to educate technicians on where
assets had issues in the past. In addition, UpKeep can be used as a
data center for compliance information such as employee training,
storm water prevention, and other intelligence.
Flexibility would also be quantified when evaluated as part of a specific
project (described in more detail in Appendix A).
Time Savings Toward Creating Asset Reports: Calculation Table
REF. METRIC CALC. YEAR 1 YEAR 2 YEAR 3
D1 Number of asset reports created annually 12 12 12
D2 Time spent on creating asset reports before UpKeep (hours)
7 facilities*8 hours 56 56 56
D3 Time spent on creating asset reports after UpKeep (hours)
Interviews 1.5 1.5 1.5
D4 Difference in time spent on creating asset reports since adopting UpKeep (hours)
(D1*D2*)-(D1*D3) 654 654 654
D5 Fully burdened hourly rate of facility technician
Assumption $35 $35 $35
D6 Productivity recapture Assumption 50% 50% 50%
Dt Time savings toward creating asset reports D4*D5*D6 $11,445 $11,445 $11,445
Risk adjustment ↓20%
Dtr Time savings toward creating asset reports (risk-adjusted)
$9,156 $9,156 $9,156
Maximizing asset lifetime
is a long-term goal for
the organization with
UpKeep.
15 | The Total Economic Impact™ Of UpKeep
The table above shows the total of all
costs across the areas listed below, as well as present values (PVs) discounted at 10%. Over three years, the interviewed organization expects risk-adjusted total costs to be a PV of $331,189.
Implementation risk is the risk that a proposed investment may deviate from the original or expected requirements, resulting in higher costs than anticipated. The greater the uncertainty, the wider the potential range of outcomes for cost estimates.
Analysis Of Costs
QUANTIFIED COST DATA
UpKeep Training Costs
Before deploying UpKeep, the manufacturer had facility managers
participate in training sessions to oversee implementation of the solution
across its seven facilities and 125 users. The organization sent 12 facility
managers to training sessions that took place over the course of two
days. Their fully burdened daily rate was $280. The organization also
paid UpKeep a one-time flat fee of $15,000 to train the managers.
Risk:
› Implementation costs will vary based on the number of people involved
in training and whether or not the organization elects to use UpKeep’s
services to help with training.
To account for these risks, Forrester adjusted this cost upward by 20%,
yielding a three-year risk-adjusted total PV of $26,064.
Total Costs
REF. COST INITIAL YEAR 1 YEAR 2 YEAR 3 TOTAL PRESENT VALUE
Etr UpKeep training costs $26,064 $0 $0 $0 $26,064 $26,064
Ftr UpKeep subscription costs $734 $122,400 $122,400 $122,400 $367,934 $305,125
Total costs (risk-adjusted) $26,798 $122,400 $122,400 $122,400 $393,998 $331,189
UpKeep Training Costs
REF. METRIC CALC. INITIAL YEAR 1 YEAR 2 YEAR 3
E1 Number of facility managers in training sessions
Interview 12
E2 Time spent training (days) Interview 2
E3 Fully burdened daily rate for facility technicians
Assumption $280
E4 Implementation fee Assumption $15,000
Et UpKeep training costs (E1*E2*E3)+E4 $21,720 $0 $0 $0
Risk adjustment ↑20%
Etr UpKeep training costs (risk-adjusted)
$26,064 $0 $0 $0
16 | The Total Economic Impact™ Of UpKeep
UpKeep Subscription Costs
The manufacturer pays for UpKeep on a per user basis. Initially, the
organization distributed UpKeep to three users at a facility for testing
purposes. After three months and a positive experience, the organization
trained all its managers and then unrolled the service out to 125 users
across its facilities. For access, the facility paid $68 per user per month,
totaling a little more than $100,000 annually.
Risk:
› Subscription costs will vary based on the rollout of UpKeep to users
and the number of users who access the platform on a monthly basis.
To account for these risks, Forrester adjusted this cost upward by 20%,
yielding a three-year risk-adjusted total PV of $305,125.
UpKeep Subscription Costs
REF. METRIC CALC. INITIAL YEAR 1 YEAR 2 YEAR 3
F1 Number of UpKeep users Interview 3 125 125 125
F2 Cost per user per month Interview $68 $68 $68 $68
F3 Months using UpKeep 3 12 12 12
Ft UpKeep subscription costs E1*E2*E3 $612 $102,000 $102,000 $102,000
Risk adjustment ↑20%
Ftr UpKeep subscription costs (risk-adjusted)
$734 $122,400 $122,400 $122,400
125 users
of UpKeep at the
interviewed organization
17 | The Total Economic Impact™ Of UpKeep
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the interviewed organization's investment. Forrester assumes a yearly discount rate of 10% for this analysis.
Financial Summary
CONSOLIDATED THREE-YEAR RISK-ADJUSTED METRICS
Cash Flow Chart (Risk-Adjusted)
-$0.2 M
$0.2 M
$0.4 M
$0.6 M
$0.8 M
$1.0 M
$1.2 M
$1.4 M
Initial Year 1 Year 2 Year 3
Cashflows
Total costs
Total benefits
Cumulative net benefits
These risk-adjusted ROI,
NPV, and payback period
values are determined by
applying risk-adjustment
factors to the unadjusted
results in each Benefit and
Cost section.
Cash Flow Table (Risk-Adjusted)
INITIAL YEAR 1 YEAR 2 YEAR 3 TOTAL PRESENT VALUE
Total costs ($26,798) ($122,400) ($122,400) ($122,400) ($393,998) ($331,189)
Total benefits $0 $421,894 $569,438 $693,758 $1,685,089 $1,375,379
Net benefits ($26,798) $299,494 $447,038 $571,358 $1,291,090 $1,044,190
ROI 315%
Payback period <3
18 | The Total Economic Impact™ Of UpKeep
UpKeep: Overview
The following information is provided by UpKeep. Forrester has not validated any claims and does not endorse
UpKeep or its offerings.
UpKeep is the leading mobile-first CMMS/Enterprise Asset Management System helping maintenance teams deliver reliability for their facility. UpKeep has been named the No. 1 Maintenance Management Software and has also been recognized as a top place to work in Los Angeles. UpKeep has over 160,000 registered users from small businesses to large enterprises including Yamaha, Jet.com, Unilever, and Constellation Brands. UpKeep offers core maintenance and asset management functionality including full asset lifecycle management, inventory, work order management, and preventive maintenance to create service schedules. Users can see work order summaries showing upcoming work along with due dates, criticality, and workers assigned to each. UpKeep has raised $50 million in venture capital from Bain Capital, Battery Ventures, Insight Partners, Emergence Capital, and Y Combinator. UpKeep's mission is to empower maintenance teams to revolutionize their businesses. For more information about UpKeep, visit http://www.onupkeep.com
19 | The Total Economic Impact™ Of UpKeep
Appendix A: Total Economic Impact
Total Economic Impact is a methodology developed by Forrester
Research that enhances a company’s technology decision-making
processes and assists vendors in communicating the value proposition
of their products and services to clients. The TEI methodology helps
companies demonstrate, justify, and realize the tangible value of IT
initiatives to both senior management and other key business
stakeholders.
Total Economic Impact Approach
Benefits represent the value delivered to the business by the
product. The TEI methodology places equal weight on the
measure of benefits and the measure of costs, allowing for a
full examination of the effect of the technology on the entire
organization.
Costs consider all expenses necessary to deliver the
proposed value, or benefits, of the product. The cost category
within TEI captures incremental costs over the existing
environment for ongoing costs associated with the solution.
Flexibility represents the strategic value that can be
obtained for some future additional investment building on
top of the initial investment already made. Having the ability
to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates
given: 1) the likelihood that estimates will meet original
projections and 2) the likelihood that estimates will be
tracked over time. TEI risk factors are based on “triangular
distribution.”
The initial investment column contains costs incurred at “time 0” or at the
beginning of Year 1 that are not discounted. All other cash flows are discounted
using the discount rate at the end of the year. PV calculations are calculated for
each total cost and benefit estimate. NPV calculations in the summary tables are
the sum of the initial investment and the discounted cash flows in each year.
Sums and present value calculations of the Total Benefits, Total Costs, and
Cash Flow tables may not exactly add up, as some rounding may occur.
Present value (PV)
The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
Net present value (NPV)
The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made, unless other projects have higher NPVs.
Return on investment (ROI)
A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
Discount rate
The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.
Payback period
The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.