6.5 How to implement measures to quantify Maintenance Human Factors investments for cost justification

1. Useful cost justifications must be straightforward and easy to understand. They need not be computed by economists.
   
   
2. The imprecise measurement of Human Factors interventions may complicate cost justification calculations.
   
   
3. Try to use existing maintenance event examples for cost justifications. Use data from the event investigation system described in Section 1.
   
   
4. How to calculate a Return on Investment (ROI) of a specific maintenance-related event.
   
   
   1. The basic equation for ROI is simple: merely divide benefit by cost.
      
      
   2. Estimate the annual cost of a particular type of maintenance error. Call this “Cost.”
      
      
   3. Determine the contributing factors to the event, and estimate the cost to mitigate these factors. Keep it simple and call this “Cost to Fix.”
      
      
   4. Estimate a reasonable “Probability of Success” that the interventions will be successful. Say, for example, that you estimate an 80% success rate.
      
      
   5. Multiply “Cost” by “Probability of Success.” Call this “Return.”
      
      
   6. Divide (“Return” – “Cost to Fix”) by “Cost to Fix.” Call this “Return on Investment” (ROI).
      
      
   7. A positive ROI (> 1.0) may not be achieved in one year.