How to Build a Business Case for CMMS in South Africa

Maintenance is often treated as a cost centre. When you ask for budget for a CMMS, finance wants numbers: what does it cost, what do we save, and when do we get our money back? A strong CMMS ROI story turns that conversation from “why should we spend?” into “how soon can we start?” This guide shows you how to build a business case for CMMS in South Africa using current costs, projected savings, implementation costs, and a clear payback calculation in rand. You will learn what to include, how to quantify today’s maintenance pain, and how to present the case so management and the CFO can say yes.

Why You Need a Business Case for CMMS

Without a formal business case, CMMS investment is easy to defer. Maintenance competes with production, capex, and cost-cutting initiatives. Finance and leadership are used to seeing maintenance as an expense that must be minimised. A CMMS business case reframes the question: not “how much does maintenance cost?” but “how much does poor maintenance cost, and what do we gain by fixing it?” When you put a number on the cost of reactive maintenance, downtime, and compliance risk, the CMMS becomes an investment with a measurable return. That shift is what gets budget approved.

The CFO Needs Numbers, Not Features

CFOs and boards evaluate projects on risk and return. They care less about work order workflows or mobile apps than about: Will this reduce cost or risk? What is the payback period? What happens if we do nothing? A business case that leads with CMMS ROI — quantified savings, payback in months, and the cost of inaction — speaks their language. Lead with the financials; use features only to support how those financials are achieved.

What to Include in Your CMMS Business Case

A complete CMMS business case has four building blocks: current costs (what you spend today on maintenance and its failures), projected savings (what a CMMS can realistically deliver), implementation costs (software, setup, and training), and payback (how long until benefits exceed costs). Missing any one of these weakens the case. This section outlines each; the following sections show how to calculate them.

Current Costs

These are the costs you incur today because maintenance is reactive, poorly planned, or poorly recorded. They include downtime, the reactive maintenance premium (emergency repairs cost more than planned ones), overtime, compliance penalties or risk, and contractor spend that could be reduced with better planning. Quantifying current costs is the foundation: it defines the size of the opportunity and the denominator for CMMS ROI.

Projected Savings

Savings come from fewer unplanned failures, lower spare-parts cost through better planning and inventory, higher preventive maintenance (PM) compliance, and less overtime. Industry benchmarks and pilot data support these estimates. Be conservative: use ranges (e.g. 20–30% reduction in downtime) and document your assumptions so finance can stress-test them.

Implementation Costs

Include CMMS subscription fees (monthly or annual), one-off implementation or setup (data migration, configuration, integration if any), and training. Do not hide these; a credible business case shows total cost of ownership so payback is calculated on real spend.

Payback Period

Payback is the time in months or years until cumulative savings equal cumulative cost. A payback of 12–18 months is often acceptable for operational improvements in South African mining, manufacturing, and facilities. Shorter payback strengthens the case; longer payback may still be justified if risk reduction (e.g. compliance, safety) is material.

Calculating Your Current Maintenance Costs

To build the “before” side of your CMMS ROI, you need a realistic picture of what poor or reactive maintenance costs today. The main categories are below. You do not need perfect data; reasonable estimates are enough to build a credible business case. For a detailed method to put a number on downtime alone, see our guide on how to calculate the cost of downtime in South Africa.

Downtime

Unplanned stoppages cost lost production, idle labour, and often expedited parts and overtime. Use your actual or estimated cost per hour of downtime for critical assets or lines. If you do not have it yet, use the formula: lost production (throughput × downtime × contribution margin) plus labour and parts. Even one or two critical assets will give you a number that makes the case. Downtime is usually the largest single lever in the CMMS ROI equation.

Reactive Maintenance Premium

Emergency repairs typically cost 2–4 times more than the same work done in a planned window: premium rates for contractors, expedited parts, overtime, and less efficient use of labour. Estimate what share of your maintenance spend is reactive (e.g. 60%) and apply a premium factor (e.g. 2×) to the reactive portion to approximate the avoidable premium.

Overtime

Reactive maintenance pushes work into nights and weekends. Track overtime hours attributed to breakdowns or catch-up work and apply your loaded labour rate. Reducing reactive work directly reduces this cost.

Compliance Penalties and Risk

Under the OHS Act and, in mining, the MHSA, failure to maintain equipment can lead to improvement notices, fines, or prohibition. Include any actual penalties or remediation costs from the past 12–24 months. For risk you have not yet paid, use a probability-weighted estimate (e.g. one significant incident per X years × cost) so the business case reflects the cost of non-compliance.

Contractor Spend

When internal capacity is overwhelmed or skills are missing, contractors are used at premium rates. A CMMS that improves planning and PM compliance can reduce the volume of emergency call-outs and allow more work to be done in-house or on scheduled contracts. Compare current contractor spend to a realistic “after” scenario.

Projected CMMS Savings: What to Expect

Savings depend on your starting point and how well you implement. The following ranges are commonly used in CMMS ROI models and are consistent with benchmarks in South African and international operations. Use the middle or conservative end of ranges unless you have pilot data that supports higher figures.

Reduction in Unplanned Downtime (25–30%)

Better preventive maintenance and faster response when failures occur typically yield a 25–30% reduction in unplanned downtime hours. Apply this to your current cost-per-hour of downtime to get the annual saving. This is often the largest line item in the CMMS ROI calculation.

Reduction in Spare Parts Costs (around 20%)

Improved planning reduces emergency purchases and duplicate orders; better inventory visibility reduces overstock and obsolescence. A 20% reduction in spare parts spend is a reasonable target for operations that currently have weak planning and no formal CMMS.

PM Compliance Improvement

Higher PM compliance means more work is done before failure. Define your current compliance rate (e.g. % of PMs completed on time) and set a target (e.g. 85–95%). The benefit is reflected in lower downtime and lower reactive premium; you can also show it as a separate metric for management (e.g. “PM compliance from 60% to 90%”).

Reduced Overtime

As reactive work falls, overtime attributed to breakdowns and catch-up should decrease. Estimate the percentage of overtime that is maintenance-related and apply the same 25–30% reduction logic to get an overtime saving.

CMMS Costs: What You Will Pay

To complete the CMMS ROI and payback calculation, you need total cost of ownership. Three components matter.

Subscription

SaaS CMMS is typically paid monthly or annually per user or per asset. In South Africa, Lungisa is priced from R1,499 to R3,999 per month depending on tier and users, in ZAR. Use your shortlisted vendor’s pricing and multiply by 12 for annual software cost.

Implementation

One-off costs include data migration (asset register, PM schedules, spare parts), configuration (workflows, notifications, reports), and any integration with ERP or other systems. Allow for internal time (maintenance, IT) and any external implementation support. Even a light implementation has a cost; include it so payback is realistic.

Training

Training ensures adoption. Include the cost of training sessions, materials, and the time of staff attending. Skimping on training often shows up later as low adoption and weaker CMMS ROI.

Payback Calculation: Worked Example in ZAR

Assume a mid-sized manufacturing site with the following simplified figures.

Current costs (annual):

Downtime (unplanned): R2,400,000
Reactive maintenance premium: R800,000
Overtime (maintenance-related): R400,000
Total current cost: R3,600,000

Projected savings (conservative):

Downtime reduction 25%: R600,000
Spare parts reduction 20% on R500,000 spend: R100,000
Overtime reduction 25%: R100,000
Total annual saving: R800,000

CMMS costs (Year 1):

Subscription (Lungisa mid-tier, R2,999/month × 12): R35,988
Implementation (data, config, 40 hours internal + small external): R80,000
Training: R25,000
Total Year 1 cost: R140,988

Ongoing (Year 2+): subscription only, R35,988 per year.

Payback: Year 1 net = R800,000 − R140,988 = R659,012. Payback is well under 12 months. In Year 2 and beyond, net benefit is roughly R764,012 per year (R800,000 − R35,988). The CMMS ROI is positive from the first year.

Your numbers will differ. The point is to use the same structure: current cost baseline, conservative savings, full implementation and subscription cost, then payback and ongoing benefit. Adjust the percentages and amounts to match your site and document assumptions so the CFO can validate them.

Intangible Benefits: Why They Matter (But Do Not Replace ROI)

A CMMS delivers benefits that are hard to put in rand but still matter for the business case.

Compliance and Audit Readiness

When inspectors ask for maintenance records, having work orders, PM completions, and asset history in one system reduces audit risk and preparation time. For OHS Act and MHSA environments, this is a real risk reduction even if you do not put a rand value on every avoided notice.

Knowledge Retention

Procedures and history in the CMMS reduce dependence on a few individuals. When experienced technicians leave, the next person can see what was done and how. That reduces the cost and risk of turnover.

Data-Driven Decisions

With accurate asset and work history, you can prioritise by criticality, see which assets fail most, and adjust PM frequency or scope. That leads to better capital and maintenance decisions over time.

In the business case, mention these after the financial CMMS ROI. They support the story and help with risk-focused stakeholders; they do not replace the need for a clear payback number.

Presenting the CMMS Business Case to Management

Structure the presentation around risk and return, not software features.

Open with the problem. Summarise current cost of downtime, reactive premium, and compliance risk. Use one or two numbers that resonate (e.g. “We lose an estimated R2.4 million per year to unplanned downtime”).
State the opportunity. “A CMMS can reduce these costs by X% based on industry benchmarks and our own estimates. Annual saving is approximately RY.”
Show the investment. Total Year 1 cost (subscription, implementation, training) and ongoing annual cost. Use local pricing (e.g. Lungisa R1,499–R3,999/month) so it is credible.
Give the payback. “Payback in Z months. After that, we retain RZ per year in ongoing savings plus reduced compliance and operational risk.”
Address “what if we do nothing?” Reiterate that current costs and risk continue; the only way to capture the savings and reduce risk is to invest.
Keep features in the appendix. Work orders, mobile access, and reporting are the how; the board and CFO care about the why (CMMS ROI and risk) and the when (payback).

If you need a step-by-step approach to rolling out the system after approval, see our guide on how to implement a CMMS in South Africa. For a clear explanation of what a CMMS is and how it supports maintenance and compliance, see what is CMMS in South Africa.

Building a business case for CMMS in South Africa is about turning maintenance from a cost into an investment with a number. Quantify current costs, apply conservative savings, add full implementation and subscription cost, and show payback in rand. Lead with CMMS ROI and risk reduction when you present to management; use the same structure whether you run a mine, a factory, or a multi-site facility. If you would like to see how Lungisa can support your maintenance and compliance with transparent ZAR pricing, explore Lungisa or contact the Skynode team to discuss your requirements.