When I talk to companies about implementing a CAFM system, almost the same question comes up sooner or later: "What exactly does it bring us in the end? And when will we get our investment back?"
The short answer: It depends. The long answer is more interesting – and usually more honest.
Why CAFM Can Reduce Costs – And Why It Doesn't Happen Automatically
Facility Management is a classic "high-volume business" in many organizations. Faults are reported, maintenance is scheduled, service providers are commissioned, invoices are checked, spaces are managed, and operator obligations are documented. This doesn't happen once, but hundreds or thousands of times a year.
In projects, I've seen these tasks handled via Excel files, emails, paper forms, and various individual solutions. Information was missing, had to be searched for, or entered multiple times. Responsibilities were unclear, deadlines were missed, and the status of a process could only be clarified by asking follow-up questions.
Initially, a CAFM system fundamentally changes only one thing: It creates a central data and process base. Buildings, spaces, equipment, contracts, orders, documents, and costs are linked together. This allows processes to be handled more transparently, faster, and more uniformly.
Typical effects I observe in practice are:
- Less manual effort for notifications, orders, and approvals
- Faster processing of technical disruptions
- Better planning of maintenance and inspections
- Greater transparency of costs and services
- Improved management of external service providers
- Earlier detection of energy consumption and deviations
- Fewer media breaks between departments and locations
- More complete documentation of operator obligations
Not all of these effects immediately lead to directly visible cost savings. Often, internal capacities are freed up first. These can be used for additional tasks, better controls, or the reduction of external services. That's why I like to differentiate between direct savings, avoided costs, and qualitative improvements when evaluating.
Considering economic efficiency systematically
For a reliable cost-benefit analysis, costs and benefits must be weighed against each other. The GEFMA 460 guideline provides an established framework for this. It helps to comprehensibly evaluate the introduction of CAFM and other digitalization approaches.
On the cost side, there are not only software licenses or monthly subscriptions. Internal and external project efforts must also be included in the calculation.
Typical costs include:
- System selection and procurement
- Technical concept and project management
- Data import, cleansing, and takeover
- Configuration of roles, forms, and workflows
- Interfaces to other systems, such as ERP or document management
- Training of employees and service providers
- Ongoing license, hosting, and support costs
- Internal administration and data maintenance
On the other hand, there are the expected benefits. These include, for example, lower maintenance costs, less time spent on administrative activities, or reduced energy costs.
A simple formula for the return on investment is:
ROI = (Benefit - Cost) / Cost * 100
A positive ROI indicates that the assessed benefit is higher than the costs. In practice, the payback period is also important. It describes when the cumulative savings cover the investment.
For well-defined CAFM projects, a payback period of two to three years can be realistic. In larger projects, it depends heavily on the extent of data preparation, process harmonization, and system integration.
I have seen projects where the software was relatively inexpensive, but the data preparation cost many times more. And conversely, cases where a higher software budget was quickly compensated for by very disciplined processes and clear responsibilities.
Calculating savings potential correctly
Simple formulas are often sufficient for calculating savings potentials. It is important to work with the actual quantities and costs of your own company.
For an administrative process, the calculation might look like this:
Savings = Number of transactions * Time saved * Hourly rate
For example, a company processes 10,000 storm reports per year. Digital forms, automatic forwarding, and mobile feedback reduce the administrative effort per report by 15 minutes. With an internal billing rate of 50 Euros per hour, the following annual savings result:
10,000 reports * 0.25 hours * 50 Euros = 125,000 Euros per year
It must be examined whether the freed-up time can actually be used economically. For instance, if additional personnel capacity is foregone, external services are reduced, or the team's productivity is increased, it constitutes an economically effective impact.
For existing cost blocks such as energy or maintenance, a savings rate can be calculated:
Savings = Initial costs * Savings rate
If the annual costs for maintenance and upkeep are 400,000 Euros and a CAFM-supported process can conservatively save 8 percent, the result is:
400,000 Euros * 8 percent = 32,000 Euros per year
A conservative assumption is important. Instead of calculating with maximum study values, companies should initially only consider effects that are highly likely to be achieved.
Controlling maintenance and upkeep more effectively
Maintenance and upkeep are among the areas with the greatest savings potential. Many companies have maintenance contracts and inspection obligations but lack a complete overview of assets, deadlines, costs, and actual services rendered.
I remember a project where a company paid for maintenance contracts for equipment that no longer existed for years. Other equipment was serviced multiple times because it was listed in different lists with slightly different names. And for some critical equipment, it was unclear whether the last inspection had actually been carried out.
A CAFM system can automatically schedule maintenance and inspections, generate work orders, and centrally document feedback from internal teams or service providers. The asset history becomes traceable. Faults can be analyzed and recurring errors identified.
This not only improves documentation but also cost-effectiveness. For example, companies can identify:
- Which assets cause particularly high failure or repair costs
- For which objects maintenance deadlines are becoming critical
- Which service providers deliver services late or incompletely
- Where a repair is still worthwhile and where renewal is more economical
- Which maintenance services are commissioned multiple times or unnecessarily
Practical reports mention savings of up to 20 percent in maintenance and repair costs. This figure should be understood as a guideline. A well-organized technical operation will generally achieve lower improvements than a company with many manual processes and incomplete data.
Better control of energy costs
Energy is a significant cost block in building operations. At the same time, it is often difficult to detect consumption deviations early on. Data is often available but not regularly analyzed or not linked to areas, usage times, and technical systems.
CAFM can capture and analyze energy data in a structured way. When meter readings, costs, areas, and technical information are brought together, conspicuous consumption can be identified more quickly. This can lead to concrete measures, such as adjusting operating times, inspecting a system, or optimizing control parameters.
A simple example: The energy consumption of a building decreases from 900 to 750 kilowatt-hours per square meter per year. The saving is around 16.7 percent.
In practice, such improvements do not arise solely from the CAFM system. The software creates transparency and supports tracking. The actual savings result from technical and organizational measures.
Depending on the initial situation, savings potentials of around 15 to 25 percent are mentioned in the energy sector. Companies should assess these figures individually. Those who already operate professional energy management will usually achieve lower savings in the short term. The benefit here lies more in detecting deviations faster and securing successes permanently.
Automate processes and relieve staff
Many CAFM projects start with fault and order management. The reason is understandable: the processes here are often recurring, easily measurable, and immediately noticeable to users.
A digital fault report already contains all important information: location, room, category, priority, description, and photos if applicable. The system automatically forwards it to the correct department. Employees and service providers can process the order on mobile devices and report their work status. Inquiries and manual status lists are reduced.
This saves time and improves service quality. Practical examples mention processing accelerations of about 30 to 40 percent. A reduction in administrative personnel costs by up to 30 percent is also possible if many manual and decentralized processes existed previously.
An example from a branch network: A company processes 12,000 reports per year. The average processing of a report incurs one hour of administrative effort. Through digital workflows, 80 percent of this effort can be reduced. At a calculated rate of 10 Euros per hour, this results in:
12,000 reports × 1 hour × 80 percent × 10 Euros = 96,000 Euros per year
In such a scenario, further effects often arise: faster commissioning, fewer unnecessary external interventions, better traceability, and clearer management of service providers.
Manage spaces and costs in the portfolio
CAFM can also create economic advantages in space management. Companies need reliable information about which spaces are available, how they are used, and what costs they incur.
A central space database helps to identify vacant spaces, underutilization, or unnecessarily maintained areas. It supports relocations, workplace concepts, cost allocations, and space planning. This becomes particularly relevant for large office portfolios, educational real estate, public properties, or decentralized corporate structures.
A simple approach is to consider savings per square meter. If a portfolio comprises 1 million square meters and savings of 5 euros per square meter per year are achieved through better space, energy, or maintenance management, the annual potential is:
1,000,000 square meters × 5 euros = 5,000,000 euros per year
This figure is only reliable if it is broken down into individual measures. Possible components include lower energy consumption, optimized service provider costs, reduced vacancies, or more efficient use of office and ancillary spaces.
Lump-sum savings values help with initial orientation. However, for an investment decision, it should always be understandable how the amount is composed.
Key figures for usage controlling
A business case is only helpful if the planned effects are also reviewed after implementation. Therefore, companies should determine at the beginning of the project which key figures they want to measure and which baseline values apply.
Suitable key figures are:
- Cost per square meter
- Maintenance and repair costs per object or asset
- Number and duration of technical failures
- Proportion of on-time maintenance and inspections completed
- Average processing time per ticket
- Proportion of orders processed digitally and on mobile
- External service provider costs per service type
- Energy consumption per square meter or unit of use
- Space utilization and vacancy rate
- Lead time for invoices and approvals
These key figures should be collected before the project and regularly compared after go-live. Only then can it be determined whether the expected savings are actually materializing.
It is also useful not to just look at overall figures. High energy consumption or many disruptions can be concentrated in individual buildings, systems, or regions. CAFM helps to make such anomalies visible and to initiate targeted measures.
Making CAFM Benefits Measurable
CAFM can significantly reduce costs in facility management. High potentials often exist with manual processes, incomplete data, decentralized structures, and poorly transparent service provider management.
However, the introduction should not be justified with blanket savings promises. A reliable business case is based on the data of one's own portfolio: number of transactions, processing times, maintenance budgets, energy consumption, space, and external costs.
The crucial question is not only: 'What functions does the system offer?' But above all:
Which specific process are we improving, what is the current effort, and how do we measure success?
If these questions are answered at the beginning, CAFM becomes an effective control instrument. It creates transparency, reduces unnecessary effort, and provides the data basis for better decisions in building operations.
