Business Case: CODITECT WO QMS Module
Document Type: Financial Justification & ROI Model
Version: 1.0 | Date: 2026-02-13
Classification: Strategic — CODITECT Platform
Audience: Investors, Board, Executive Leadership
1. Problem Quantification
1.1 Current Cost of Manual Change Control in Regulated Environments
Organizations managing validated systems without integrated AI-driven work order management face quantifiable costs:
| Cost Category | Per-Organization Annual Cost | Source / Basis |
|---|
| Manual WO creation & tracking | $150K–$400K | 2–4 FTEs × $75–100K loaded cost |
| Compliance documentation labor | $200K–$600K | QA staff for audit trails, signatures |
| Failed audits / remediation | $100K–$2M per event | FDA warning letter remediation averages $500K+ |
| Unplanned downtime (validated systems) | $50K–$500K | Average $260K/hr for pharma production |
| Vendor coordination overhead | $50K–$150K | Manual scheduling, evidence collection |
| Re-validation after changes | $100K–$300K | IQ/OQ/PQ labor-intensive processes |
| Total annual burden | $650K–$3.95M | Mid-size pharma/biotech |
1.2 Hidden Costs (Not Captured Above)
- Opportunity cost: 3–6 month delays in system upgrades due to change control friction.
- Talent drain: QA professionals spending 60%+ time on documentation vs. quality improvement.
- Audit anxiety: Organizations over-invest in manual controls ($2–3 for every $1 of actual risk).
- Agent ceiling: AI development tools cannot operate on validated systems without formal change control — blocking adoption entirely.
2. CODITECT WO QMS Value Proposition
2.1 Direct Cost Reduction
| Capability | Manual Cost | With CODITECT | Savings | Mechanism |
|---|
| WO creation & lifecycle | $150–400K | $30–80K | 60–80% | AI auto-generates WOs from agent intents |
| Audit trail generation | $200–600K | $20–60K | 90% | Immutable, auto-generated, append-only |
| Approval workflows | $100–200K | $20–40K | 80% | Digital routing with e-signatures |
| Resource matching | $50–100K | $10–20K | 80% | Algorithmic experience/availability matching |
| Vendor coordination | $50–150K | $15–45K | 70% | VendorCoordinatorNode automation |
| Validation documentation | $100–300K | $30–90K | 70% | Auto-generated IQ/OQ/PQ templates |
| Total | $650K–1.75M | $125–335K | $525K–1.4M | |
2.2 Revenue Acceleration
| Benefit | Quantification | Basis |
|---|
| Faster system upgrades | 3–6 months faster to validated state | Eliminate manual WO bottleneck |
| Earlier AI agent deployment | $500K–2M accelerated revenue | Validated AI agents in production sooner |
| Audit readiness always-on | $100–500K avoided remediation | Continuous compliance vs. periodic scramble |
| Reduced FDA 483 / warning letter risk | $500K–2M risk reduction | Proactive vs. reactive compliance |
2.3 Strategic Value (Non-Financial)
- Market access: Required for FDA-regulated AI deployment — without it, CODITECT cannot sell to pharma/biotech.
- Competitive moat: Only platform with integrated AI agent + change control.
- Platform stickiness: Audit trail continuity creates high switching costs.
- Data asset: Cross-tenant compliance patterns become proprietary intelligence.
3. Customer ROI Model
3.1 Scenario: Mid-Size Biotech (200 employees, 50 validated systems)
| Line Item | Year 0 (Implementation) | Year 1 | Year 2 | Year 3 |
|---|
| Costs | | | | |
| CODITECT WO QMS License | — | ($120K) | ($120K) | ($120K) |
| Implementation Services | ($50K) | — | — | — |
| Internal Integration Effort | ($80K) | ($20K) | ($10K) | — |
| Training | ($15K) | ($5K) | ($5K) | ($5K) |
| Total Costs | ($145K) | ($145K) | ($135K) | ($125K) |
| | | | |
| Benefits | | | | |
| QA labor reduction (2 FTEs → 0.5 FTE) | — | $112K | $112K | $112K |
| WO management automation | — | $90K | $90K | $90K |
| Vendor coordination efficiency | — | $35K | $35K | $35K |
| Audit remediation avoidance | — | $75K | $75K | $75K |
| Accelerated system upgrades (revenue) | — | $150K | $200K | $250K |
| Total Benefits | $0 | $462K | $512K | $562K |
| | | | |
| Net Value | ($145K) | $317K | $377K | $437K |
| Cumulative | ($145K) | $172K | $549K | $986K |
3.2 Key Metrics
| Metric | Value |
|---|
| Payback period | 5.5 months (from Year 1 start) |
| 3-year ROI | 719% ($986K return / $145K initial investment) |
| 3-year NPV (10% discount) | $813K |
| IRR | >200% |
| Cost-to-savings ratio | 1:3.5 (Year 1), 1:4.5 (Year 3) |
3.3 Sensitivity Analysis
| Variable | Base Case | Pessimistic (-30%) | Optimistic (+30%) |
|---|
| Annual benefits | $462K | $323K | $601K |
| Implementation cost | $145K | $189K | $102K |
| Payback period | 5.5 months | 8.2 months | 3.1 months |
| 3-year ROI | 719% | 412% | 1,198% |
Even in the pessimistic scenario, payback is under 9 months with >400% 3-year ROI.
4.1 Unit Economics per Customer (B.2.1 Aligned)
Four-Tier Revenue Model:
| Tier | Target Customer | Annual Pricing | Key Features | Y3 Mix |
|---|
| Starter | Emerging Biotech (50-100 employees) | $48K | Core QMS, 3 AI agents, 5 seats | 15% |
| Professional | Growth Biotech (100-250 employees) | $96K | + Validation automation, 10 agents, 15 seats | 35% |
| Enterprise | Mid-Market Pharma (250-500 employees) | $192K | + Custom workflows, unlimited agents, 50 seats | 40% |
| Autonomous | Enterprise Pharma (500+ employees) | $500K+ | + White-glove support, dedicated infrastructure | 10% |
Blended Unit Economics (Year 3 Steady State):
| Metric | Value | Notes |
|---|
| Blended ACV | $120K | Weighted average: (15%×$48K) + (35%×$96K) + (40%×$192K) + (10%×$500K) |
| CAC (blended) | $35K | Hybrid sales-led + PLG motion; founder-led early efficiency |
| LTV (5-year, 12% churn) | $480K | Conservative churn assumption with NRR expansion |
| LTV:CAC | 13.7× | Excellent; >3× is SaaS benchmark threshold |
| Gross margin | 75-82% | 82-88% SaaS subscription, 50-60% professional services |
| Contribution margin | 65% | After support, CS, and infrastructure costs |
| Payback period | 6-12 months | Tier-dependent (Starter 6mo, Enterprise 12mo) |
4.2 Expansion Revenue Drivers
| Expansion Vector | Trigger | Incremental ACV |
|---|
| Additional compliance modules | New regulation or audit finding | +$24K per module |
| More validated systems | Company growth, acquisitions | +$12K per 25 systems |
| Agent orchestration seats | Scaling AI agent fleet | +$6K per 10 agents |
| Usage-based (WO volume) | Operational scale | +$0.50 per WO above threshold |
| Validation-as-a-Service | Major system changes (OS upgrades) | +$15–50K per engagement |
Net Revenue Retention (NRR) target: 130%+ — driven by expansion within existing accounts.
4.3 Path to $10M ARR
| Milestone | Customers | ACV | ARR | Timeline |
|---|
| First 5 lighthouse | 5 | $100K | $500K | Month 6–12 |
| Product-market fit | 15 | $120K | $1.8M | Month 12–18 |
| Sales engine on | 40 | $140K | $5.6M | Month 18–30 |
| Category leader | 75 | $160K | $12.0M | Month 30–36 |
5. Build Cost Analysis
5.1 WO QMS Module Development Cost
| Phase | Duration | Team | Cost (Loaded) |
|---|
| POC (Core schema + lifecycle) | 4 weeks | 2 engineers | $50K |
| Pilot (Hierarchy, DAG, e-sig) | 3 weeks | 2.5 engineers | $47K |
| Integration (Agent adapter, events) | 3 weeks | 2 engineers | $38K |
| Production (PM, vendor, dashboards) | 2 weeks | 3 engineers | $38K |
| Total | 12 weeks | 2–3 engineers | $173K |
5.2 Ongoing Operating Cost
| Item | Monthly | Annual |
|---|
| Cloud infrastructure (per tenant) | $200 | $2,400 |
| Shared platform overhead (amortized) | $500 | $6,000 |
| Support allocation | $300 | $3,600 |
| Total per-tenant operating cost | $1,000 | $12,000 |
5.3 Break-Even Analysis
| Metric | Value |
|---|
| Development investment | $173K |
| Per-customer contribution margin | $120K × 65% = $78K |
| Customers to break even | 3 customers |
| Time to break even | Month 9–12 (with 5 lighthouse customers) |
6. Risk-Adjusted Financial Summary
6.1 Revenue Scenarios (Year 3)
| Scenario | Probability | ARR | Risk-Adjusted ARR |
|---|
| Bull (category takes off) | 20% | $24M | $4.8M |
| Base (steady growth) | 50% | $12M | $6.0M |
| Bear (slow adoption) | 25% | $5M | $1.25M |
| Failure (pivot required) | 5% | $0 | $0 |
| Expected Value | | | $12.05M |
6.2 Investment Required
| Category | Year 1 | Year 2 | Year 3 | Total |
|---|
| Engineering | $350K | $500K | $700K | $1.55M |
| Sales & Marketing | $200K | $400K | $800K | $1.4M |
| Operations & Support | $100K | $200K | $400K | $700K |
| Total Investment | $650K | $1.1M | $1.9M | $3.65M |
6.3 Capital Efficiency
| Metric | Value |
|---|
| Burn multiple (Year 3) | 0.3x ($1.9M burn / $6.4M net new ARR) |
| ARR per employee (Year 3, ~15 FTEs) | $800K |
| Magic number | 2.1 (excellent capital efficiency) |
7. Recommendation
7.1 Go — Build the WO QMS Module
The financial case is compelling across all scenarios:
- Low build cost ($173K) relative to market opportunity ($2.4B SAM).
- Fast payback for customers (5.5 months) makes sales frictionless.
- Break-even at 3 customers — achievable within 12 months.
- Category creation justifies premium valuation multiples.
- Compliance-enabling — this is not optional for market entry, it's required.
7.2 Conditions for Go
- Vault integration for credential management in Job Plans (critical security prerequisite).
- DAG cycle detection in WO dependency graphs (prevents operational deadlocks).
- Lighthouse customer commitment — secure 2–3 LOIs before full build.
7.3 Key Success Metrics
| Metric | Month 6 | Month 12 | Month 18 |
|---|
| Lighthouse customers signed | 2 | 5 | 10 |
| WOs processed (total) | 500 | 5,000 | 25,000 |
| Compliance audits passed | 1 | 3 | 8 |
| NPS | >40 | >50 | >60 |
| Time-to-value (implementation) | <4 weeks | <3 weeks | <2 weeks |
Financial projections are estimates based on market research, comparable company analysis, and internal cost modeling. Actual results will vary based on execution, market conditions, and customer acquisition velocity.
Copyright 2026 AZ1.AI Inc. All rights reserved.
Developer: Hal Casteel, CEO/CTO
Product: CODITECT-BIO-QMS | Part of the CODITECT Product Suite
Classification: Internal - Confidential