An ROI Model for Remote Machine Monitoring

It takes the entire first year to roll out the management software and the wireless solution to receive the full benefits. Hence, in the first year column shown in the chart, I account for 50 percent of the benefits that will be fully achieved in following years. I have taken the entire cost for software licensing and hardware (wireless and DEX retrofit boxes) in the first year.

In reality, most companies will choose to finance many of these costs. This will help the first year payback, while slightly increasing costs in following years.

Finally, first year costs may be underrepresented since most companies deploy service technicians to install the wireless hardware in the machines. In addition, travel costs will be incurred, especially at large, multi-branch operations.

The chart on the preceding page shows the baseline profile, and then the savings and ROI after software and remote monitoring are deployed.

The baseline profile assumes that nothing is
implemented, so the results do not change over the
different years.

REMOTE MONITORING DELIVERS QUANTIFIABLE RESULTS

No model can be 100 percent accurate. The model in this article attempts to strike a balance between simplicity and taking most things into account. A more accurate and complicated model should further break down some of the cost assumptions previously noted.

The charts presented in this article are designed to demonstrate how remote machine monitoring, in conjunction with vending management software, can improve financial results. For those readers interested in a more comprehensive analysis, I have prepared a spreadsheet that goes into greater detail and covers five years.

Readers who are interested in reviewing this comprehensive spreadsheet can contact me directly.
The bottom line, however, is that even if you assume your operation is better than the baseline and the benefits you achieve will be lower, demonstrable operating profit improvements still exist when deploying software and remote monitoring.

If you include any of the soft benefits mentioned but not included in the model, technology investments can go a long way towards solving a major problem in our industry today: the lack of profit.

These technology solutions have another industrywide benefit — they make vending a more robust, reliable and viable alternative to convenience stores, and improve the consumer experience in vending.