Real-Time Location Systems are increasingly used by organizations to improve process efficiency, meet safety requirements, and control expenses. However, implementing an indoor RTLS solution should be based on a clear analysis of return on investment (ROI).
Projects often fail when they are not supported by measurable financial or operational justification. A thorough ROI assessment helps confirm that the system supports both short- and long-term operational needs.
This article outlines the main factors, measurable benefits, and calculation methods involved in evaluating ROI for location tracking systems, with relevance to sectors across North America, Europe, and Asia-Pacific.
Key Components of ROI for RTLS Systems
- Capital Expenditures
- Operational and Recurring Costs
- Tangible Returns
- Intangible Returns
Evaluating the return on investment (ROI) of real-time location systems involves more than comparing initial costs to projected savings. A thorough analysis should address all direct and indirect inputs and outcomes over the system’s lifecycle.
This section breaks down the financial and operational elements required to support a sound investment case for location-based infrastructure, including indoor RTLS deployments.
Capital Expenditures
Hardware Procurement
Initial hardware costs can vary significantly depending on the scale and precision required.
These typically include:
- Tags. Worn by personnel or attached to equipment/assets.
- Anchors and Gateways. Fixed-position devices that triangulate tag positions and transmit location data.
- Sensors. Optional units for environmental data (e.g., temperature, humidity) that may be integrated with the RTLS system.
Software Licensing and Integration
Organizations must factor in:
- License Fees. Usually annual or per-device, depending on the provider’s model.
- Integration Costs. Customization and data exchange with ERP, WMS, CMMS, or access control systems.
- Vendor Services. Costs related to configuring the software environment, setting up user access controls, and enabling system alerts.
Installation and Calibration
This includes the physical setup of devices, network configuration, and system calibration to ensure accuracy. In some facilities, especially those with complex layouts, multiple calibration passes may be needed to fine-tune location accuracy.
Employee Training and Onboarding
Training staff to use dashboards, interpret data, and respond to system alerts is essential. Training also ensures that operational teams use the system as intended, which affects the quality of outcomes.
Operational and Recurring Costs
Recurring costs can include:
- License Renewals
- Cloud Hosting or On-Premise Server Maintenance
- Firmware and Software Updates
- Hardware Repairs or Replacements
- Technical Support Agreements
These are essential for maintaining system reliability, accuracy, and security.
Tangible Returns
Process Efficiency Gains
Indoor RTLS systems can lead to measurable time and cost savings by:
- Reducing manual tracking tasks
- Shortening search times for tools, equipment, or personnel
- Preventing production delays caused by missing assets
- Increasing equipment utilization rates
Reduction in Operational Disruptions
Downtime caused by misplacement, unavailability, or inefficient routing of resources can be minimized, resulting in increased throughput and improved schedule adherence.
By monitoring asset movement and location in real time, organizations reduce losses from theft, misplacement, and misuse.
Intangible Returns
Workplace Safety and Risk Mitigation
Many indoor RTLS systems support safety use cases, such as:
- Monitoring restricted-area access
- Tracking evacuation status during emergencies
- Enforcing zone-based rules for hazardous environments
These outcomes reduce the likelihood of accidents, regulatory fines, and associated liability costs.
Compliance and Audit Readiness
Systems can generate digital audit trails, useful for demonstrating compliance with industry regulations such as OSHA, FDA, or ISO standards. This minimizes manual record keeping and improves transparency during inspections.
Employee Satisfaction and Accountability
When teams are equipped with tools that make their work more efficient and reduce frustration caused by asset unavailability or miscommunication, morale improves. Additionally, RTLS data encourages consistent accountability without the need for invasive oversight.
ROI Variables by RTLS Technology Type
The choice of real-time location system technology directly influences both short-term costs and long-term value.
Each technology has specific technical characteristics, performance metrics, and infrastructure requirements, all of which affect return on investment in different ways. Understanding these distinctions is essential when planning an indoor RTLS deployment.
Ultra-Wideband (UWB)
UWB systems offer precise location accuracy—often within 10 to 30 centimeters—and low latency. These attributes make them suitable for use cases that demand exact positioning, such as automated material handling in manufacturing or patient tracking in healthcare.
However, UWB typically requires a dense network of anchors and custom infrastructure, resulting in higher upfront costs and more complex implementation requirements. The ROI is often justified in high-value environments where precision leads directly to measurable productivity gains.
Bluetooth Low Energy (BLE)
BLE-based systems strike a balance between cost and accuracy. They are commonly used for asset tracking in retail, offices, and light industrial environments. BLE tags are relatively inexpensive, and many modern buildings already have compatible infrastructure in place, such as beacons or BLE-enabled access points.
While the accuracy is generally within a few meters, this is sufficient for most zone-level tracking. ROI can be realized quickly due to lower hardware and deployment costs, especially in environments that don’t require sub-meter accuracy.
Wi-Fi and Passive RFID
These technologies are often selected for facilities that already have widespread Wi-Fi coverage or use RFID for inventory management. Wi-Fi-based location tracking minimizes new infrastructure investment, but generally provides lower accuracy and can be affected by interference or signal fluctuations.
Passive RFID is useful for point-in-time tracking at choke points (e.g., dock doors or portals) but does not support continuous tracking. While both options may limit advanced functionality, they can reduce capital expenditure and simplify rollout, supporting a more gradual path to ROI.
Chirp Spread Spectrum (CSS)
CSS is gaining attention as a scalable solution for large facilities or outdoor-indoor hybrid environments. It supports long-range communication with relatively low power consumption and infrastructure density.
While still emerging, CSS may offer a favorable cost-to-coverage ratio for organizations with wide-area tracking requirements. Its growing ecosystem makes it a candidate for large-scale logistics or utility deployments.
Measuring Cost Savings with RTLS
Inventory Management
- Eliminate misplaced or lost inventory with real-time tracking.
- Reduce excess stock by maintaining accurate inventory levels.
- Reduce audit and costly plant shutdowns for manual inventory counts
Equipment and Asset Utilization
- Monitor and measure asset usage to identify underutilized equipment.
- Extend the lifecycle of assets with preventive maintenance.
Labor Efficiency
- Reduce search times for assets and inventory.
- Automate routine tasks, allowing employees to focus on high-value activities.
Operational Efficiency Gains
Process Optimization
- Streamline workflows by analyzing movement patterns and bottlenecks.
- Optimize material flow and resource allocation.
- Automate manual processes using location
Safety and Compliance
- Monitor safety zones and prevent unauthorized access with geofencing.
- Track and enforce compliance with operational standards.
Scalability: A Long-Term ROI Factor
- How RTLS Systems Scale with Business Growth:
Add new tags or expand tracking areas seamlessly as your use cases and operations grow.
Future-proof your investment with scalable technologies like UWB or BLE, which offer long-term value as they adapt to evolving requirements. - Total Cost of Ownership (TCO)
Factor in the lifecycle costs of RTLS, including future upgrades, replacement tags, and integration with new systems.
Tools and Methods to Calculate ROI
ROI Formula
ROI = [(Net Benefits – Total Costs) / Total Costs] x 100
Key Metrics to Analyze
- Reduction in Search Time: Quantify time saved by employees in locating assets.
- Decrease in Downtime: Measure the impact of faster maintenance and issue resolution.
- Improvement in Asset Utilization: Compare pre- and post-implementation usage rates.
Conclusion
Assessing the return on investment for indoor RTLS systems requires a comprehensive review of initial setup costs, ongoing operational expenses, and both measurable and non-financial outcomes.
These include savings from improved efficiency, better asset utilization, and stronger compliance with safety protocols.
A well-structured ROI analysis, adapted to the specific use case, helps ensure the chosen solution fits your operational requirements, financial limits, and future planning. This reduces the likelihood of system underuse and supports more confident decision-making.
To learn how RTLS asset tracking can support your organization’s performance goals, visit Locaxion’s RTLS Asset Tracking Solutions. The page includes practical tools and system options suited for a range of environments.
