ROI of Field Service Management Software: Calculate Your Business Case
The ROI of field service management software is calculated as the annual benefit minus the annual cost, divided by the cost. Payback time is the investment divided by the monthly benefit. The biggest benefits typically come from administrative time, driving, faster invoicing, and hours that would otherwise never be invoiced. Results vary from company to company, so the calculation should be based on your own figures.
How to calculate ROI step by step
1. Add up the costs
Start with what the system costs in the first year: the license, add-on modules and integrations, setup, and the internal time spent configuring the system and teaching employees to use it. Remember the internal time, even though it doesn't appear on an invoice.
2. Put numbers on the benefits
The benefits come from four places, and each can be calculated with your own figures:
- Administrative time: number of employees × minutes saved per day × working days × hourly rate. This is what happens when time and materials are registered directly on the task.
- Forgotten hours: number of hours per year that aren't invoiced today × hourly rate.
- Driving: kilometers saved per day × working days × cost per kilometer. Route planning can optimize the order of the day's visits.
- Invoicing at the office: hours saved per month × 12 × hourly rate. When approved hours and consumption go directly into the invoicing basis, the office doesn't have to collect the information afterwards.
3. Calculate ROI and payback time
Add up the benefits and subtract the costs. ROI is the result divided by the costs. Payback time is the costs divided by the monthly benefit. Here is a worked example with hypothetical figures, not a documented result:
| Item | Assumption (hypothetical) | Per year |
|---|---|---|
| Administrative time | 10 technicians × 12 min. a day × 220 days × DKK 400/hour | DKK 176,000 |
| Forgotten hours | 10 technicians × 1 hour a month × 12 × DKK 400/hour | DKK 48,000 |
| Driving | 10 technicians × 2 km a day × 220 days × DKK 4/km | DKK 17,600 |
| Invoicing at the office | 5 hours a month × 12 × DKK 350/hour | DKK 21,000 |
| Total benefit | DKK 262,600 | |
| First-year costs | License, setup, and internal time | DKK 200,000 |
| ROI | (262,600 − 200,000) ÷ 200,000 | about 31% |
| Payback time | 200,000 ÷ (262,600 ÷ 12) | about 9 months |
4. Don't count on the full benefit from day one
Employees need to get to know the system, and not all benefits arrive at once. Count on a gradual increase in the first year, and consider calculating two scenarios: a cautious one and a realistic one.
What have customers experienced?
Microbizz customers have published their own results on their case pages. They are the customers' own statements and can't be transferred directly to your company.
Fyns Kran Udstyr: ROI of about 10 months
On the case page, Fyns Kran Udstyr states an ROI of about 10 months after digitalizing planning, time registration, service reports, and certificates. The page doesn't describe the calculation method or the costs behind the figure.
KN Tagdækning: Invoicing in half an hour
KN Tagdækning states on its case page that invoicing, which used to take up to five days, can now be done half an hour after a job is finished. The company can also handle twice as many jobs, if not three times as many, and the director says the bottom line has doubled. No exact amounts are given.
Frequently asked questions about the ROI of field service software
How quickly does field service software pay for itself?
It depends on the number of employees, how much manual work there is today, and what the system costs. Fyns Kran Udstyr states about 10 months. Calculate your own payback time with the formulas above.
Which benefits are hard to put numbers on?
Fewer disputes with customers about completed work, better documentation, and happier employees are hard to measure in money. Include them as a note alongside the calculation instead of guessing at a figure.
What should we count as costs?
The license, add-on modules and integrations, setup, and the internal time for configuration and training. Check whether prices exclude VAT and whether setup is included in the quote.
Can we get help with the calculation?
Yes. You can contact Microbizz for a review of your situation, so the calculation is based on your own figures and a concrete quote.
