The Total Economic Impact™ Of UpKeep...paper trails on asset performance. The rise of computerized maintenance management systems (CMMS) and enterprise asset management (EAM) solutions

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


› 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


$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


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.


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


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


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


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


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.


› 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.



› 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.”



Savings From Avoided Production Downtime: Calculation Table


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


Btr Savings from avoided production downtime (risk-adjusted)

$168,000 $288,720 $389,520


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.


› 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.


› 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.



Year 1: 1,400 hours

avoided in unplanned

work

Year 3: 3,198 hours

avoided in unplanned

work


Savings From Avoided Time Spent On Unplanned Work: Calculation Table


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


Ctr Savings from avoided time spent on unplanned work (risk-adjusted)

$39,200 $66,024 $89,544


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.”


› 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.


› 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.




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


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


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.


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


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


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


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

http://www.onupkeep.com/


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.

Documents

The Total Economic Impact™ Of UpKeep...paper trails on asset performance. The rise of computerized maintenance management systems (CMMS) and enterprise asset management (EAM) solutions