Calculating the ROI of a Visitor Management System

Customers continuously ask us, ‘What is the return on investment (ROI) of a visitor management system (VMS) investment?’.  The truth is that it depends. A boilerplate ROI can make peoples’ eyes roll as many of the benefits are intangible so the question becomes, how do you accurately measure the impact?

A comprehensive ROI calculation should take into account all of the little things your business needs on a day-to-day basis; document acknowledgment, badges, setup, support costs, and everything in between. It can be hard to know where to start, but I wrote this article to help.  After reading this, I am hopeful you will be able to share the value of visitor management internally and prioritize it with the appropriate stakeholders to ensure a successful deployment.

For more data on visitor management, I urge you to review the report The Evolution of Visitor Management to understand the trends and the measurable impact it has on businesses.

The Benefits

A visitor management system provides a wide range of benefits. Whether that is a reduction in administrative costs, the creation of operational efficiencies, a reduction of risk or access to more data, considering the benefits is the first step towards calculating your ROI.

  • Operational efficiencies

Research shows that 84% of surveyed companies see an increase in operational efficiency with the use of a VMS. One of the main reasons customers buy VMS is that it automates several key manual sign-in functions, including data entry, issuing a visitor badge, notifying a host, document signature, and more. Altogether, these activities often take 2-3 minutes per visitor, whereas a VMS can trim it down to 20-30 seconds. Visitors are also remembered on second and third visits, which means sign-in can be even shorter as tasks are remembered.

76% of our customers have told us that they believe a VMS has increased their efficiency when signing in visitors. These are early results from our survey, more of which can be found at the end of this article.

  • Reduction of administrative costs

Consider that at 2-3 minutes per sign-in, 20 visitors per day equals one hour of effort. That is an hour of work taken away from other business critical functions. Implementing a VMS allows your employees to get back to the things that matter most, and allow the sign-in process to occur without any gaps.

  • Reduction of risk

Increasingly, customers are struggling with changing regulatory shifts around visitor management. For example, a failed ITAR audit can result in a fine ranging from $20,000 to $78 million. Failure to comply with PCI Data Security Standard could cause banks to pass fraudulent charges on in the form of large fines. One commonality for regulatory bodies is consistency around unique badge identification. By relying on manual badging processes, you expose your business to these – potentially – crippling risks. The implementation of a visitor management solution will decrease the possibility of these risks impacting your organization.

  • Accumulate data and access to knowledge

With a VMS, you will know more about your visitors and facility usage that ever before. The Who, Where, Why, and When is accessible at any time. Consider how many hours it takes to complete an audit by consolidating paper logs and digitizing them. Compare that to being able to download a report with all collected data instantly. Early survey results tell us that 72% of VMS users believe that the level of information they have about their visitors has increased because they have a tool that puts data at their fingertips. In the event of an incident, being able to search a visitor’s contact information to see who they visited, and why, can save an incredible amount of time versus having to search through manual logs.

  • Brand perception 

Imagine signing in from the perspective of a customer, a supplier, or a job candidate and seeing a paper lobby book in an otherwise high-tech business. Jeff Bohnen, from Mountain Equipment Co-Op said that VMS

“makes us look like a progressive company with some tech savvy, instead of signing in guests on a clipboard and looking like a company stuck in the 1980s”.

This is an intangible benefit, but companies spend a great deal of time and effort on their brand and how they are perceived by others.

According to a 2014 Gartner Research study, “companies spent on average 10.2% of their annual 2014 revenue on overall marketing, with 50% of companies planning to increase [in 2015] to an average of 10.4%.”

Making a good first impression with visitors is a way to reinforce brand spending at a relatively small cost.

Which benefits you choose to include in your ROI calculation is up to you but it is important to consider the value of both intangible and tangible factors. It could be one of the above or a combination of them all. There is no right answer and I constantly hear of new and innovative benefits from users of VMS.

ROI of Visitor Management

The Costs

Before you finalize your decision, it’s important you dig deep into the costs. We will focus solely on Software as a Service (SaaS) for this article; where the tangible costs of hardware management, IT backups, upgrades, and infrastructure are covered and therefore not the responsibility of the buyer (as they are with on-premise solutions).

  • Dig deep into license fees

Monthly license fees sometimes exclude the costs of SMS text and email notifications as well as other add-ons. Make sure you ask providers to outline any and all costs to avoid surprises during implementation.

  • Implementation costs

Your chosen VMS will take some time and effort to implement; how much depends on the complexity of the VMS itself and your requirements.  Consider how much time it will take to educate employees about new processes (like pre-registration). Some vendors provide a self-help knowledge base to reduce the change management burden.

A tip to keep your implementation costs down: Ask your VMS provider to share a project plan and ask which steps typically take the longest to complete. This will allow you to set expectations and get the right people involved before even getting started.

  • Hardware costs

A VMS typically requires a stand, printer, and iPad (or other tablet) to run. The most basic of which will total around $700 USD.

  • Support

Support is often another one of those add-ons you need to dig into. Some vendors limit support access based on the version your purchase.  Consider the degree of assistance your team will need before you choose a price tier.  If you believe you’ll need access to phone, chat and email make sure that you budget for the tier than includes those options.

The Return

Now that we’ve discussed some of the benefits and costs, let’s consider a simple hypothetical example.

ABC Corporation has 5 locations in North America and Europe and each location averages 500 visits per month with an assumption that one hour of labor costs $25 USD.

By reducing sign-in efforts from 3 minutes ($0.42 per minute of labor) to 30 seconds ($0.21 per minute of labor) per visitor, there is a saving of $1.05/visit in operational efficiencies.  This calculates out to $525 saved per location (500 visits*$1.05) monthly.  With 5 locations that represent a monthly savings of $2,625 ($31,500 annually).

Compare against the cost of the software (5 locations):

$10k annual cost ($2k per site) + $3.5k for hardware ($700 per site) + $3k for time spent on implementation (24 hrs of effort*5 sites*$25) = $16.5k**

**we’ll work with this on an annual basis but it should be noted that after Year 1 the cost would decrease on hardware and implementation.

Your return:
Payback period = $16,500 /$31,500= 6.3 months
ROI% = (($31,500-$16,500)/$16,500)*100 = 90% annually
+Intangibles – such as brand perception and compliance with required regulatory bodies

Here is a great review on this topic:

“Traction Guest provided the ability to create an “unmanned” lobby entry system which notifies the host of an arriving visitor electronically. The cost savings in redeploying lobby staff paid for the system in less than 6 months.” – David Rodman, Business Systems Manager at Whippany Actuation Systems LLC.

I hope this simple example has given you a place to start on your own ROI calculation and gives you a better understanding of the impact a visitor management system can have.


Alex Brennan, Account Executive at Traction Guest  Written by Alex Brennan, Account Executive at Traction Guest.