1. How to Establish a Measurable ROI from Implementing IBM Maximo Asset Management Mountain West Maximo User Group Monday, August 3 rd, 2015 Created by Leon Reed Principal Reliability Consultant GenesisSolutions POC: Bill Thompson Director, APO Marketing Communications Systems & Technology Asset Reliability Strategy & Process

2. 2 2 A Fully Integrated Global EAM Service Provider Computerized Business Intelligence System for Profitable Asset Management Payback Achieved from Utilizing Output Data Converted into Metrics for Cost Analytics and Measuring Reliability Improvements Objective Eliminate Waste Reduce Variation Reduce Costs Improve Safety and Environment Increase Profit Margins Remain Competitive Measuring ROI from Implementing Maximo Benefits of Implementing Maximo Insanity: doing the same thing over and over again and expecting different results. -Albert Einstein

3. 3 3 A Fully Integrated Global EAM Service Provider Reliability Excellence Achieved Through Proactive Asset Management Final Frontier for Improving Thinning Profit Margins in Mature Industries Maximo Automates Asset Management Central Repository for Asset Management Data Business System for Managing Work, Inventories, and Maintenance Resources Intelligence gathering system for making vital and cost effective business decisions for your organizations Measuring ROI from Implementing Maximo Benefits of Implementing Maximo

4. 4 4 A Fully Integrated Global EAM Service Provider Maximo Reliability Analytics Scorecards Performance Charts Key Performance Indicators Failure Analysis Cost Analysis Implementing a “Best in Class” CMMS/EAM System in an absolute necessity for an industry today to achieve World Class Reliability and Operational Excellence Measuring ROI from Implementing Maximo Maximo Output Data Converted into Metrics

5. 5 5 A Fully Integrated Global EAM Service Provider Average Percentages of Improvements Asset Management Cost Reduced by 12% to 18% Avg. According to US Department of Labor Above 30% in Extremely Reactive Industries Inventory Optimization Cost Reductions up to 20% Avg. Reduced Overtime Costs by 15% to 20% Avg. Production Throughput Increase of 10% – 18% Avg. Extended Life of Assets up to 22% Avg. Maintenance Labor Utilization Improvement – 57% Avg. with Planning and Scheduling Improved Reduction of Environmental and Safety Incidents with Lost Time Accidents by 20% Avg. Sounds Fantastic. Will These Numbers Impress your Leadership into Committing to Maximo? Probably Not! Measuring ROI from Implementing Maximo Improvements Utilizing a CMMS

6. 6 6 A Fully Integrated Global EAM Service Provider Beware of the simple percentages, average gains and ambiguous industry claims Communicate in a language Leadership understands Extrapolate definitive percentages specific to your reality into estimated or actual costs Culminate in Annual ROI, Payback Period, Increase in Profit Margin Estimated ROI Benefit and Project Costs estimation to Justify Funding and Implementing Maximo Actual ROI Actual Benefit and Project Costs derived from Maximo and Business metrics after implementation Measuring ROI from Implementing Maximo Improvements Utilizing a CMMS

7. 7 7 A Fully Integrated Global EAM Service Provider Measuring ROI from Implementing Maximo ROI results of total benefits received against total costs of implementing the project Same standard formula used in any business case. Cost Benefits (CB) – Project Costs (PC) Measuring ROI from Implementing Maximo Measuring ROI Project Costs (PC) ROI% = X 100 Once these costs and ROI are quantified, payback period and profit margin impact can be determined. How do we determine Cost Benefits and Project Costs ? ROI% = X 100 CB – PC PC OR

8. 8 8 A Fully Integrated Global EAM Service Provider Maximo Project Costs (PC) Software, Hardware and associated Licenses Data Input and Configuration Initial Installation and Training IT, Engineering and Technician Support Measuring ROI from Implementing Maximo Measuring Project Costs (PC)

9. 9 9 A Fully Integrated Global EAM Service Provider Maximo Cost Benefits (CB) Increased Asset Life Increased Productivity Reduced Downtime Optimized Inventory Levels Reduced Overtime Increased Purchasing Efficiency Optimized Labor Utilization Costly Bad Actor Identification and Cost Mitigation Measuring ROI from Implementing Maximo Measuring Cost Benefits (CB)

10. 10 What is “Your” Estimated ROI? Estimated ROI is from Estimated Benefit and Project Costs to Justify Funding and Implementing Maximo Develop solid business case cost estimation Obtain real “current state” cost numbers for your specific industry or facility Adjust implied estimated benefits and percentages to match the realities Once Quantified, Total Sum of Estimated Cost Benefits and Estimated Project Costs Plugged into ROI Formula Determine estimated ROI and estimated payback time Improvement Impact on the Bottom Line Estimated increase in Profit Margins Measuring ROI from Implementing Maximo Developing the Business Case A Fully Integrated Global EAM Service Provider

11. 11 A Fully Integrated Global EAM Service Provider Maximo Cost Benefits (CB) for a Business Case Extended Asset Life [Actual Asset Costs or Replacement Asset Value (RAV) /Expected Life (Years)] X [Est. % Extension/100] = Cost Savings/Yr. Reduced Downtime - Increased Productivity From Improved Equipment Availability [Average Production Output /Yr.] X [Est. % Equipment Availability Increase/100] X [Profit/Unit] = Est. Profit Increase/Yr. Reduced Overtime Annual Overtime Costs/Dept. X [Est % Reduction/100] = Annual Overtime Costs Savings/Dept. Increase Purchasing Efficiency Automated Vendor Management, Automated Purchasing of PM Spare Parts and Inventory - 250.00 avg. cost per manual PO. Optimized Inventory Levels Total Inventory Cost x [Est % Reduction/100] = Inventory cost savings Optimized Labor Utilization Annual Maintenance Labor Cost X [Est. % Efficiency Reduction/100 = Annual Labor Cost Savings Measuring ROI from Implementing Maximo Estimating Cost Benefits (CB) for a Business Case

12. 12 A Fully Integrated Global EAM Service Provider What is “Your “ Actual ROI Increased Asset Life Increased Productivity Reduced Downtime Optimized Inventory Levels Reduced Overtime Increased Purchasing Efficiency Optimized Labor Utilization Costly Bad Actor Identification and Cost Mitigation Measuring ROI from Implementing Maximo Measuring Cost Benefits (CB) for Actual ROI Maximo System Install

13. 13 A Fully Integrated Global EAM Service Provider What is “Your “ Actual ROI Achieved and Measured from Actual Maximo Project Implementation Costs and Cost Benefits Utilizing Actual Maximo Output Data from Equipment Downtime, Labor Costs, Failure Data, Equipment Availability, etc. Measured from Actual Business Metrics Relative to the Maximo Implementation Converted into Metrics Measuring Reliability Improvements for Cost Analytics Total Summation of Actual Cost Benefits and Project Costs are Plugged into ROI Formula Determine Actual ROI and Actual Payback Period Improvement of Actual Impact to the Bottom Line and an increase in Profit Margins “True Payback in Proactive Asset Management for a CMMS/EAM system is made when Reliability Excellence is achieved from converting the output data into metrics for executing Performance Analytics, Cost Analysis and Statistical Reliability Analysis for increasing profit margins and reducing safety incidents”. Measuring ROI from Implementing Maximo Measuring Actual Payback and ROI

14. 14 A Fully Integrated Global EAM Service Provider Begin with the End in Mind Stephen Covey’s 2 nd Law Seasoned Reliability Engineers are needed for CMMS Implementations Manage system integration to foundational key elements for proactive asset management Ensures definitive configurations for correct output data Accurate metric conversions to perform analytics Desired Maximo Report Function Improvements Improved Number Crunching using custom defined historical data criteria Fed into a independent configurable Maximo Metrics Module Conversion outputs to KPI’s, Scorecards and Dashboards Selection of user defined graphical displays Custom legends, backgrounds and colors Saved to a report query with custom print functions Measuring ROI from Implementing Maximo Summary

15. 15 A Fully Integrated Global EAM Service Provider Measuring ROI from Implementing Maximo Same standard formula used in any business case. Not Complicated Cost Benefits (CB) – Project Costs (PC) Measuring ROI from Implementing Maximo Conclusion Project Costs (PC) ROI% = X 100 Determining accurate Estimated and Actual Cost Benefits (CB) will be paramount for achieving success in establishing a Measurable ROI from Implementing Maximo Bill Thompson – bthompson@genesissolutions.combthompson@genesissolutions.com (203) 431-0281 – info@genesissolutions.cominfo@genesissolutions.com www.GenesisSolutions.com ROI% = X 100 CB – PC PC OR