Return on CPS (RoCPS): An Evaluation Model to Assess the Cost Effectiveness of Cyber-Physical Systems for Small and Medium-Sized Enterprises

Abstract

This paper addresses the challenge of evaluating the cost effectiveness of cyber-physical systems (CPS) for small and medium-sized enterprises (SMEs) in manufacturing industries. CPS are key technologies to implement the digitalization and interlinking of production processes with the advantage of increasing production efficiency and flexibility. However, it is difficult to evaluate properly how much CPS can contribute to profit growth because of various costs of complex CPS components and ambiguous estimation of potential CPS benefits. For SMEs, the investment decision on CPS is especially difficult due to the lack of human resources with CPS competence and limited financial resources. Thus, an evaluation model for assessing the economic effectiveness of CPS aimed at SMEs is developed in this paper. To assess the effectiveness, different cost types of implementing CPS are identified and classified. Furthermore, potential benefits of CPS utilization are analyzed comprehensively and calculation rules for monetization of benefits are suggested. The metric Return on CPS (RoCPS) is defined to value the profit based on the invested capital. The RoCPS will facilitate the selection of economically efficient CPS solutions, supporting SMEs with economic growth by reasonable technology management. Finally, the evaluation model is validated by a use case of an electric vehicle start-up.