Get a Free WorkTrek Demo
Let's show you how WorkTrek can help you optimize your maintenance operation.
Try for freeKey Takeaways:
- 65% of companies use a CMMS to monitor and optimize maintenance operations.
- Nearly 20% of plants dedicate over 20% of their budget to maintenance.
- Deferred maintenance cost the city of San Diego $1 billion in 2024.
Many view maintenance costs as a cost center with little return, rather than a potential source of added value.
This is a mistake.
With effective maintenance cost management, companies can maximize their budgets, weather rising costs, and achieve significant operational efficiency.
In this article, we’ll explore what maintenance cost management entails and share best practices to help you master it.
If you’re curious to learn more, keep reading.
Maintenance Cost Factors
Before we start exploring the intricacies of maintenance cost management, let’s first define what maintenance costs encompass.
Understanding this will help you monitor and control expenses more effectively.
Maintenance costs refer to any expense incurred by an individual or organization to keep assets in proper operating condition.
These costs are generally classified into three categories:
| Direct costs | Expenses are directly tied to maintenance activities, including labor wages, spare parts, materials, and contractor fees. |
| Indirect costs | Costs are caused by the downtime or inefficiency that happens because something wasn’t maintained properly. |
| Induced costs | System-wide consequences that stem from poor maintenance planning or failure. They often hit beyond the maintenance department. |
When viewed holistically, it becomes clear that maintenance costs are far more complex and impactful than they initially appear.
They can consume a substantial portion of an organization’s operating budget.
A recent report found that 64.4% of plants allocate between 5% and 20% of their annual operating budget to maintenance.
Additionally, nearly 20% of facilities dedicate over 20% of their budget to these activities.
These figures illustrate the significant investment required for maintenance.
That’s why it’s so important to carefully plan, monitor, and allocate upkeep budgets, which is exactly what maintenance cost management aims to achieve.
The Objectives of Maintenance Cost Management
Now, let’s explore what you can achieve with efficient cost management.
Minimizing Total Maintenance Costs
One of the most obvious cost management goals is to reduce unnecessary expenses related to labor, parts, downtime, and energy.
This objective is particularly important today, as maintenance costs rise by the month, creating greater pressure to save money wherever possible.
The 2025 BCIS Facilities Management Forecast predicts that maintenance costs, as measured by the BCIS All-in Maintenance Cost Indices, will rise by 17% by Q4 2029.
This increase is driven by various factors, including:
- Labor shortages
- Rising labor costs
- Stricter safety requirements
- Growing economic uncertainty
The impact of these issues can be minimized only through strategic cost control.
However, truly effective cost management never tries to slash costs indiscriminately. Instead, it focuses on the big picture.
For instance, an inexperienced maintenance manager might postpone costly maintenance to save money in the short term.
But a seasoned professional understands that deferred maintenance often leads to even greater expenses down the road.
The city of San Diego had to learn this lesson the hard way.
The city delayed hundreds of maintenance projects, including roof patches and basic repairs to HVAC systems, to save money.
According to an audit reported by the San Diego Union-Tribune, long-term costs are expected to rise, as the city may need to replace entire buildings earlier than necessary.
This is exactly why strategic cost management matters.
Companies need to realize that it’s not just about spending less, but about spending wisely.
It’s about making the right investments at the right time to avoid far greater losses in the future.
Reducing Downtime
Reducing downtime is one of the biggest priorities of maintenance cost management.
After all, downtime can be extremely costly, and it’s only getting more expensive.
According to a 2024 Siemens study, the annual cost of an idle production line at a large automotive plant has reached $695 million.
That’s 1.5 times higher than just five years earlier.
In the heavy industry sector, that figure stands at $59 million, a 1.6-fold increase since 2019.
Such enormous losses stem from the many different costs associated with downtime.
These include lost revenue, wages paid to idle staff, salaries for those resolving the issue, the cost of emergency replacement parts, and other related expenses.
There are also significant hidden costs involved.
Virve Viitanen, Global Head of Customer Care and Support at ABB Motion Services, explains:
“On top of the obvious direct financial costs, downtime also presents businesses with several indirect costs, like reputational damage, health and safety risks, loss of team morale, and insurance premium rises.”
Downtime poses a significant risk to companies across all industries.
To mitigate this, it’s important to balance resources carefully, ensuring there is just enough material and skilled labor to maintain asset reliability without wasting money on unnecessary expenses.
Improving Budget Accuracy
Cost management in maintenance focuses on creating realistic, data-driven budgets that accurately reflect actual spending.
The goal is to forecast costs with minimal variance between projected and real expenses, using historical data, asset conditions, and anticipated future needs.
This is essential if you want to avoid overspending, underfunding, or inefficient allocation of financial resources.
However, a 2025 report by SFG20 shows how thankless of a task cost management can be.
As it turns out, 40% of organizations have reduced their facilities management budgets compared to the previous year.
In other words, while maintenance costs are climbing, budgets are shrinking, putting maintenance teams under pressure to do more with less.
This is why accurate budgeting is more important now than ever.
Maynor Carranza Vargas, Maintenance Manager at Griffith Foods, a food ingredients manufacturer, agrees:
Vargas adds that an accurate budget also helps you plan ahead and optimize maintenance schedules, boosting efficiency and reducing costs even further.
As a result, experienced maintenance managers consistently prioritize accurate, up-to-date data and consider maintenance costs holistically.
This helps them understand where the money is going and why, ultimately enabling them to tailor budgets according to company needs and priorities.
Best Practices for Effective Cost Management
Finally, let’s see how you can improve maintenance cost management within your organization.
Monitor Relevant KPIs
KPIs provide measurable insights into the performance, cost efficiency, and asset reliability within your company.
By tracking them consistently, you gain a clearer view of the effectiveness of your maintenance strategies.
Ultimately, this will help you identify trends and cost-saving opportunities.
Some helpful maintenance KPIs, along with brief explanations, can be found in the table below:
| Maintenance Cost per Unit of Production | Maintenance spending per unit produced. Helps evaluate overall cost-efficiency. |
| Planned vs. Unplanned Maintenance Ratio | A higher ratio of planned work indicates better cost control and fewer emergencies. |
| Maintenance Cost as % of Replacement Asset Value (RAV) | Measures maintenance spending against the asset’s value. Helps flag over- or under-investment. |
| Mean Time Between Failures (MTBF) | Calculates the average time between equipment failures. A higher MTBF indicates more reliable assets. |
| Mean Time to Repair (MTTR) | Shows how long it typically takes to repair failed equipment. Lower MTTR means reduced downtime and improved productivity. |
| Work Order Completion Rate | Reflects the percentage of maintenance tasks completed on schedule. Indicates team efficiency and workflow management. |
| Overtime Hours as % of Total Maintenance Hours | Highlights the amount of maintenance being handled during overtime. High levels may suggest poor scheduling or understaffing. |
| Inventory Turnover for Spare Parts | Measures how often spare parts are used relative to what’s stocked. Helps optimize inventory and reduce holding costs. |
There’s no denying that tracking all this data can become overwhelming, especially if you still rely on outdated, manual methods, such as spreadsheets.
Dedicated maintenance software solutions, like a CMMS, are much better suited for this task.
They automate data collection and reporting, offering real-time insights in an easy-to-digest format.
Pamela Paddock, Managing Director for Life Sciences at JLL, a firm that specializes in real estate and investment management, offers an example:
From there, it’s easier to make informed decisions.
If the asset is aging, it might be time to retire it.
If it’s newer, further investigation may be necessary to identify the root cause.
The bottom line is that when KPIs are tracked diligently, inefficiencies become visible and more easily fixable.
After all, you can’t improve what you don’t measure.
Prioritize Proactive Maintenance
Proactive maintenance lowers the risk of equipment failures, emergency repairs, and unexpected downtime.
This makes it a more cost-effective option compared to reactive upkeep.
Zach Williams, Engineering Manager at Kito Crosby Australia, an industrial equipment supplier specializing in custom hoists and lifting solutions, elaborates:
There are several approaches to proactive maintenance, depending on your budget and operational needs.
Let’s break them down.
Firstly, there is preventive maintenance, performed at regular intervals regardless of the equipment’s condition.
It prioritizes regular inspections and minor repairs that ultimately help prevent major failures and operational disruptions.
To maximize efficiency, many organizations use a CMMS to automate task scheduling based on specific parameters, as shown in the example below.
Secondly, condition-based maintenance is triggered by signs of asset wear or performance decline, identified through sensors that monitor parameters such as:
- Temperature
- Vibration
- Oil quality
Maintenance is carried out only when indicators suggest it’s necessary, which can make it more cost-effective than preventive maintenance.
However, condition-based maintenance requires an upfront investment in monitoring technology.
Lastly, predictive maintenance is another strategy that’s gaining increasing traction.
It’s an advanced version of CBM that leverages IoT sensors and artificial intelligence to analyze asset data and predict failures before they happen.
According to research by Deloitte, it can increase equipment uptime by 10–20% and reduce overall upkeep costs by 5–10%.
While highly effective, it demands a significant initial investment, which may not be feasible for all organizations.
Outsource Maintenance When Necessary
Outsourcing reduces overhead, provides access to specialized expertise, and frees up internal teams to focus on core business activities.
This is a great way to save money, especially when dealing with complex or seldom-used equipment that would be inefficient to maintain in-house.
Eric Woltz, Garage Management System Liaison at Holman, a fleet management and productivity solutions provider, is a big believer in this approach.
According to him, running an effective in-house maintenance operation requires a substantial investment:
However, by outsourcing, you can eliminate most of these variables and redirect your attention to your core business.
That said, outsourcing isn’t always a perfect solution.
It can come with trade-offs, including reduced control and potential security concerns.
That’s why it’s worth taking a step back and evaluating whether this strategy aligns with your organization’s long-term needs.
Generally, outsourcing makes sense when:
- You don’t have the resources—or the need—to build your maintenance team
- You’re working on a specialized project that requires niche expertise
- You’re testing a short-term investment or pilot program
- Your business has a seasonal production load
If you decide outsourcing is the right choice for you, ensure you research the market thoroughly and tailor the outsourcing model to your specific needs.
Choose the right partner, outline a clear agreement, and define the scope of work precisely.
Without these fundamentals in place, outsourcing can ultimately do more harm than good.
Invest in the Right Technology
Technology reduces manual effort, increases data visibility, and automates cost-intensive processes, ultimately providing you with greater visibility and control over expenses.
It’s no wonder that so many companies are increasingly relying on it.
A recent study has shown that 65% of companies already use a CMMS to monitor and optimize maintenance operations.
The popularity of these solutions stems from their ability to streamline all key aspects of maintenance without sacrificing user-friendliness and cost-effectiveness.
Take our own CMMS solution, WorkTrek, for example.
It automates tasks and monitors data throughout all maintenance activities, including:
- Work order management
- Inventory management
- Invoicing
- Preventive maintenance scheduling
WorkTrek unifies all these activities in one centralized platform, eliminating the need to rely on fragmented spreadsheets or handwritten logs.
This significantly improves data accuracy.
Additionally, with over 50 pre-built reports and more than 20 pre-built KPIs, WorkTrek transforms this raw data into actionable insights, allowing you to identify areas for improvement easily.
For example, by analyzing planned versus actual expenses, you can identify where budget assumptions deviate from reality.
This would enable you to adjust future budgets, revise maintenance strategies, and justify corrective actions based on actual performance instead of assumptions.
That’s the beauty of maintenance technology.
It gives you clear insight into where your money goes, how effectively it’s being used, and how to maximize the value of every resource.
In an era of rising costs and shrinking budgets, CMMS solutions are essential allies for those aiming to optimize their spending.
Conclusion
When you stop treating maintenance as an afterthought and start viewing it as a strategic investment, everything changes.
Costs become more predictable, downtime decreases, asset lifespans increase, and your staff can do more with less.
Today, looking beyond quick fixes and focusing on long-term value is what separates those who struggle from those who thrive.
Yes, it might take a shift in mindset, but once you make it, you’ll realize it was worth the effort.
