ROI Analysis and Implementation Plan
Measuring cost reductions, revenue and performance improvements and extension of equipment life, and realizing these gains across the entire fleet

After the conclusion of the Pilot Test, TI-data will work with the client to review the ROI of the CBM System, and how the CBM System affected the relevant KPIs. Our approach in determining ROI is based on identifying opportunities for cost reduction, or “cost opportunities.”

Finding the “Cost Opportunities”
Evaluating the Cost/Benefit relationship of the CBM System begins with identifying all the “Cost Opportunities”, i.e. the costs that could be eliminated through the CBM System. Calculating and accumulating these costs are the basis for determining the Return on Investment (ROI).

Reduce Unscheduled Downtime – Improve Uptime
Unplanned incidents are reduced through the early warning indicators from the CBM System. Monitoring and trending the condition of the components and the lubricants reduces or eliminates unplanned failure events.

Reduce Materials and Workload
Changing workloads from calendar based to condition based reduces costs of materials, parts and labor for certain tasks, e.g. equipment overhauls, bearing replacements, oil changes, and frequency of bearing re-greasing.

Reduce Cost of Replacement Parts
Reducing or eliminating component failures through predictive analysis produces a high return on investment (e.g. sensors and lubrication reports show problems leading to failure of bearings). By fixing the balance or lubrication problems at a minor cost, the major cost of a failed bearing set is saved.

Extend Life of Equipment and Components
The CBM System is designed to provide information to optimize the maintenance and extend the life of the equipment and the major components.

Soft Cost/Revenue Improvements
Increased uptime and improved performance of equipment creates an improvement in the market position enabling higher utilization and increased day rates. Improved maintenance practice can contribute to reduced insurance costs and improved safety.

Direct Reduction of Overall Maintenance Costs
The benefit of combining several Cost Opportunities will yield an overall reduction in total maintenance costs. The cost reductions may include: parts, materials, labor (direct, idle and potential workforce reduction), outside services, direct downtime costs, maintenance practice improvements, equipment performance improvements, life of equipment improvement, insurance and safety.

Calculating Return on Investment (ROI)
Calculating the total Return on Investment (ROI) and estimating payback of the CBM System is an ongoing process using the monetary values and financial methodologies established by the client’s accounting system. Many variables are used in measuring the cost/value relationship to the CBM System.

Projecting the Dollar Value of the Cost Opportunities
Financial values for the cost opportunities are established considering:

• The cost of a day of non-productive charged time (downtime)
• The costs of major equipment/parts replacement
• The value of reduction in spare parts replacements
• The cost of unnecessary maintenance actions
• The value of reduced unplanned events
• Average cost per work order – planned versus unplanned
• Dollar value of each “cost opportunity” saved

TI-data’s Remote Condition System significantly extends the life of equipment, improves its performance, increases uptime, reduces maintenance costs and eliminates critical failures. It optimizes the use of valuable personnel, supports collaboration and shared expertise, and centralizes IT based information sharing.

Implementation Plan
Once the client has realized the financial benefits of TI-data’s CBM System, we will assist the client in determining how to roll out the CBM System to the entire fleet. For example, we can implement according to a client’s preferences on a certain rig class, in a specified geographic region, or a preferred equipment type. Regardless, TI-data is fully prepared to install CBM fleet-wide as quickly as the client desires.