How to Calculate ROI for Technology Investments in Field Service

When considering a new field service technology investment, one of the key questions is: Will this be worth it? In field service, where both costs and potential benefits are significant, understanding the ROI is crucial. A clear ROI calculation helps you justify the costs and see the long-term value.

This guide provides a few tips for calculating ROI for technology investments.

Why calculating ROI matters

Field service organizations often face challenges that affect both costs and customer satisfaction. High labor costs, frequent overtime, and repeat site visits due to failed first-time fixes are just a few examples. While field service software solutions—like AI-powered service tools—offer a way to mitigate these problems, leadership needs to know whether the benefits outweigh the costs. That’s where ROI calculations come in.

A well-thought-out ROI model helps quantify the tangible savings, efficiency improvements, and potential revenue gains that can result from these technology implementations.

Key factors in ROI calculation

To get started, you’ll need to collect key data from your service operations. Here are some important factors to consider when building your ROI model:

• Case volume and service calls: How many cases do you handle monthly? In this example, we’ll use 10,000 cases per month, with 2,000 of them requiring service calls.
• Labor costs: Include both call center and field service salaries. In our example, let’s assume an average salary of $60,000 for call center agents and $72,800 for field engineers, with an overtime of $52.50/hour for field engineers.
• Current Efficiency Metrics: What is your current first-time fix rate (FTFR) and first-call resolution rate (FCR)? We’ll use an 85% FTFR and 90% FCR in this example.
• Time per Task: How long does it take to handle a case or complete a field service order? In our model, we’ll say the average case handle time is 30 minutes, and field service work takes about 240 minutes per order.

These general assumptions will be the foundation of your ROI calculation and help you to estimate the costs and potential savings. If you need help building an ROI model specific to your company’s data and use cases, our team is here to help. 

How technology can drive savings

Once you have your baseline data, it’s time to look at how new technology can impact your operations and drive tangible savings. Here are three benefit drivers to consider:

1. Reduced Overtime: Field engineers often work overtime, especially when service orders increase. By improving efficiency, technology can reduce the need for extra hours. In our model, if you save one hour of overtime per engineer per week across 64 engineers, the yearly savings can go up to $167,500.
2. Improved First-Time Fix Rates: A high FTFR is key to reducing the number of repeat visits. Using our previous number of 85% FTFR, a 3% improvement could result in 720 fewer service orders per year. If each visit costs $43.75 per hour, that’s a potential savings of $126,000 annually.
3. Efficient Call Handling: Technology that streamlines call center operations can save time on every call. In our model, saving just 3 minutes per call for 8,000 monthly calls results in a yearly savings of $172,800.

These examples show how even small efficiency improvements can have a big financial impact over time.

Costs to consider

When calculating ROI, don’t forget to account for all the costs:

• Initial investments: This could include one-time licensing fees or other costs incurred before the project starts.
• Implementation costs: This is the cost of implementing the technology.
• Ongoing support and subscription fees: This is the recurring cost of using the technology.
• Training costs: This can include training your team and any travel or group training expenses.
• Other costs: While most of the costs should be clear, unexpected costs almost always appear, so it’s a good idea to try to account for them.

By including all these costs, your ROI model will present a complete financial picture.

Steps to a strong ROI model

To ensure your ROI model is reliable, follow these tips:

1. Define Your Assumptions: Start by gathering data on case volume, labor costs, and current efficiency rates. Make sure your assumptions are realistic and reflect your specific business conditions.
2. Calculate Benefit Drivers: Identify where the technology will drive cost savings or new revenue, such as reduced overtime, improved FTF rates, and increased call center efficiency.
3. Include All Costs: Be thorough in including initial, ongoing, and any other costs to avoid surprises later.
4. Work with Finance: Involve your finance team early to ensure that the numbers are vetted and agreed upon.

Have realistic expectations

It’s important to approach ROI projections with a conservative mindset. Real-world implementations rarely deliver 100% value from day one, so adjust your model to account for gradual improvements.

One way to manage expectations is by using implementation filters. Instead of assuming you’ll capture the full benefit immediately, apply a gradual ramp-up over the first few years. For example, you can assume:

• Year 1: Capture 80% of the projected benefits.
• Year 2: Increase to 85%.
• Year 3: Reach 90% of the expected benefits.

Justifying technology investments with ROI

Calculating ROI allows you to demonstrate exactly how new tools will save costs, improve efficiency, and potentially generate additional revenue. Since the ROI model is based on specific, measurable metrics, you’ll also be able to track and quantify the success of your investment over time.

Whether you're looking to reduce overtime or handle more service calls without increasing headcount, a solid ROI model will support your case and give you the confidence to move forward.

Boost Service ROI with Service AIdvisor

Service Advisor helps your team boost first-time fix rates and reduce costly repeat visits by centralizing knowledge and delivering instant answers to technical questions. With seamless access across platforms and predictable subscription costs, Service AIdvisor makes it easy to keep expenses under control while boosting productivity.

Join us at our live learning session on October 29^th to learn how you can use AI to help your service teams work smarter, reduce operational costs, and tackle common service challenges.