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Why the “ROI Question” is Sinking APM Investments

Talk to any decision maker about asset performance management (APM), and you’ll hear “ROI” mentioned no fewer than 10 times. I’m exaggerating but return on investment is an understandably undeniable factor for new APM projects, especially for smaller, resource-constrained organizations. The ironic thing is, focusing so much on ROI is preventing many of these entities from getting true value from their APM investments.

It Pays to See Past ROI

An APM deployment is no different from any other business investment. If you follow the steps to choosing the right provider and implement a solution that fits your needs, you will see returns. It’s not rocket science. That’s why the question I like to pose to small organizations who are curious about APM is this:

“Once you have your ROI, then what?”

I’ll go out on a limb and say that if achieving maximum ROI is the sole objective of your APM deployment, then you’ve missed out on a much bigger opportunity. The purpose of any APM deployment should be to solve operational and investment challenges first and foremost, and ROI will come as a byproduct. Those challenges are nuanced and ever-evolving, however, and there’s no-one-size-fits-all solution. Because solving the operational challenges of today and tomorrow is a complex undertaking, fixing the entire APM conversation to ROI can distract from seeing the bigger picture of an investment and lead you headlong into an ill-fitting solution.

Looking at the way many solutions are priced offers a great example of how organizations can get caught in a short-sighted view of APM. Many solutions are priced based on “tags,” which can mean that you end up paying for the quantity of assets you’re measuring, or the number of sensors deployed across your infrastructure. On paper, this model may seem terrifically cost-effective and as though it will yield high returns. But how does that pricing model indicate value for your specific operation? If the purpose of your APM deployment is to reduce operational costs and people hours, maybe a more impactful metric for APM might be gallons of water pumped or amount of energy output, and, if that’s the case, wouldn’t it be great to have your solution price based on metrics that relate to your business?

The point I’m making is yes, ROI is an essential metric for APM success, but it’s not the metric. Ultimately, the resulting value of an APM deployment should be unique and specific to your operation and organization, and often that requires you to look beyond ROI and ask yourself: “What do we really want to accomplish through APM?”

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