Work Order System — ROI Quantification Model
Classification: Internal — Business Case Date: 2026-02-13 Status: Draft Audience: CEO, Investors, Enterprise Prospects
1. Market Sizing: Bioscience QMS Change Control
Reconciliation Note (B.1.1): The original TAM of $17.4B uses a broad market definition including all CLIA labs and IT spend attribution methodology. The refined B.1.1 analysis (see docs/market/market-sizing.md) focuses specifically on Life Sciences QMS software at $4.35B (2026), which better represents the directly addressable software market for CODITECT. Both figures are valid for different presentation contexts:
- $17.4B = Total economic opportunity including IT infrastructure, services, and adjacent CMMS/EAM markets
- $4.35B = Focused life sciences QMS software market (cloud-based, FDA-regulated, excludes on-premise legacy and non-QMS IT spend)
For investor presentations and software market sizing, use the $4.35B figure from B.1.1 as the primary TAM reference.
1.1 Total Addressable Market (TAM)
Broad TAM (Original Analysis — $17.4B):
| Segment | Companies | Avg Annual IT Spend | QMS/Change Control Share | TAM |
|---|---|---|---|---|
| Pharma Top 50 | 50 | $2.1B | 3.2% | $3.36B |
| Pharma 51-200 | 150 | $420M | 3.5% | $2.21B |
| Biotech (funded) | 2,800 | $12M | 4.1% | $1.38B |
| Med Device Top 100 | 100 | $310M | 3.8% | $1.18B |
| CRO/CDMO | 450 | $85M | 2.9% | $1.11B |
| Clinical Labs (CLIA) | 310,000 | $1.2M | 2.2% | $8.18B |
| Total TAM | ~$17.4B |
Sources: Gartner 2025 IT spending benchmarks, FDA registered facility counts, CLIA lab directory.
Focused Software TAM (B.1.1 Analysis — $4.35B):
Life sciences QMS software market (cloud-based, FDA-regulated, ISO 13485-compliant):
- 2026: $4.35B
- 2033: $9.47B (CAGR 12.65%)
- Sources: Grand View Research, MarketsandMarkets, Fortune Business Insights (12 independent sources triangulated)
1.2 Serviceable Addressable Market (SAM)
CODITECT targets organizations with validated IT systems requiring Part 11 change control and willing to adopt AI-driven automation. Filter criteria: >$5M IT budget, active FDA submissions or CLIA certification, cloud-eligible infrastructure.
Original SAM Analysis (~$466M):
| Segment | Qualifying Companies | Avg WO Module Value | SAM |
|---|---|---|---|
| Pharma (50-200) | 120 | $850K/yr | $102M |
| Biotech (Series B+) | 680 | $180K/yr | $122M |
| Med Device (connected) | 65 | $420K/yr | $27M |
| CRO/CDMO (top tier) | 85 | $310K/yr | $26M |
| Clinical Labs (large) | 4,200 | $45K/yr | $189M |
| Total SAM | ~$466M |
B.1.1 Refined SAM: $412M (FDA-regulated, cloud-ready, 50+ employees in North America/Europe)
Reconciliation: Both SAM estimates are within similar range ($412M vs $466M), differing primarily in filter methodology (B.1.1 uses tighter geographic and regulatory maturity filters). For consistency with B.1.1 comprehensive market analysis, use $412M SAM in forward planning.
1.3 Serviceable Obtainable Market (SOM)
Year 1-3 realistic capture with current team and go-to-market:
| Year | Target Customers | Avg Revenue | SOM | Cumulative |
|---|---|---|---|---|
| Y1 | 8 | $120K | $960K | $960K |
| Y2 | 28 | $180K | $5.0M | $6.0M |
| Y3 | 75 | $220K | $16.5M | $22.5M |
2. Cost of Manual Change Control (Status Quo)
2.1 Per-Change Cost Analysis
Based on industry benchmarks from regulated bioscience organizations with 200-1000 validated systems:
| Activity | Manual Hours | Loaded Cost/Hr | Cost Per Change |
|---|---|---|---|
| WO creation & planning | 2.5 | $95 | $238 |
| Job plan assembly | 3.0 | $95 | $285 |
| Resource matching & scheduling | 1.5 | $85 | $128 |
| Execution documentation | 4.0 | $85 | $340 |
| Review & approval routing | 2.0 | $120 | $240 |
| QA review (regulatory) | 3.5 | $130 | $455 |
| Audit trail compilation | 1.5 | $95 | $143 |
| Compliance documentation | 2.5 | $130 | $325 |
| Rework (20% rejection rate) | 4.0 × 0.2 | $95 | $76 |
| Total per regulatory change | ~24.5 | $2,230 | |
| Total per non-regulatory change | ~14 | $1,200 |
2.2 Annual Cost for Mid-Size Biotech (200 validated systems)
| Metric | Value |
|---|---|
| Annual changes (regulatory) | 320 |
| Annual changes (non-regulatory) | 480 |
| PM-generated WOs (calibration, etc.) | 1,200 |
| Total annual WOs | 2,000 |
| Weighted avg cost per WO | $1,580 |
| Annual change control labor cost | $3.16M |
| + Compliance risk overhead (audit prep, CAPA) | $420K |
| + Tool licensing (CMMS, paper, SharePoint) | $180K |
| Total annual cost of change control | $3.76M |
2.3 Hidden Costs Not Captured Above
| Hidden Cost | Impact | Annual Estimate |
|---|---|---|
| Audit finding remediation (FDA 483s) | $150K-$2M per finding | $375K avg |
| Production downtime from delayed changes | 4-8 hrs/incident × 12/yr | $240K |
| Qualified personnel turnover (burnout from paperwork) | 15% turnover × $180K replacement | $540K |
| Opportunity cost of delayed product launches | 2-4 week regulatory delays | $1.2M |
| Insurance premium loading (quality system gaps) | 8-12% premium increase | $180K |
| Total hidden costs | ~$2.5M |
Combined annual cost: $6.26M for a 200-system organization doing 2,000 changes/year.
3. CODITECT WO Module Value Proposition
3.1 Efficiency Gains by Automation Level
| Function | Manual Time | Automated Time | Reduction | Agent Responsible |
|---|---|---|---|---|
| WO creation & metadata | 2.5 hrs | 0.2 hrs | 92% | WorkOrderOrchestrator |
| Job plan from template | 3.0 hrs | 0.3 hrs | 90% | Orchestrator + template engine |
| Resource matching | 1.5 hrs | 0.1 hrs | 93% | ExperienceMatchingNode |
| Schedule optimization | 1.5 hrs | 0.2 hrs | 87% | SchedulingNode |
| Execution tracking | 4.0 hrs | 1.0 hrs | 75% | Agent + human execution |
| Approval routing | 2.0 hrs | 0.1 hrs | 95% | Compliance Engine |
| QA pre-check | 2.0 hrs | 0.1 hrs | 95% | QAReviewNode |
| QA decision | 1.5 hrs | 1.0 hrs | 33% | Human QA (agent-assisted) |
| Audit trail | 1.5 hrs | 0.0 hrs | 100% | Automatic (DB triggers) |
| Compliance docs | 2.5 hrs | 0.3 hrs | 88% | Documentation agent |
| Total per regulatory WO | 24.5 hrs | 3.3 hrs | 87% |
3.2 Annual Savings Model
| Metric | Before CODITECT | After CODITECT | Savings |
|---|---|---|---|
| Avg hours per WO (weighted) | 18.5 | 2.8 | 15.7 hrs |
| Total annual hours (2,000 WOs) | 37,000 | 5,600 | 31,400 hrs |
| Labor cost ($95 weighted avg) | $3.52M | $532K | $2.98M |
| Rejection/rework rate | 20% | 5% | 75% reduction |
| Rework cost | $316K | $52K | $264K |
| Compliance risk (483 findings) | $375K | $50K | $325K |
| Downtime from delayed changes | $240K | $40K | $200K |
| Turnover reduction | $540K | $180K | $360K |
| Total annual savings | $4.13M |
3.3 Token Cost (CODITECT Operating Expense)
| WO Type | Tokens/WO | Annual Volume | Annual Tokens | Cost (@$3/MTok avg) |
|---|---|---|---|---|
| Simple (Haiku-routed) | 5,000 | 1,200 | 6M | $18 |
| Moderate (Sonnet-routed) | 15,000 | 500 | 7.5M | $22.50 |
| Complex (mixed routing) | 40,000 | 250 | 10M | $30 |
| Research/regulatory (Opus) | 80,000 | 50 | 4M | $60 |
| Total | 2,000 | 27.5M | $130.50 |
Model routing reduces token costs by ~55% vs. routing everything through Opus. Even at 10x the estimated volume, annual token cost is ~$1,300 — negligible relative to $4.1M savings.
4. ROI Calculation
4.1 Three-Year ROI for Mid-Size Biotech
| Item | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Costs | |||
| CODITECT license (WO module) | $180K | $180K | $180K |
| Implementation & integration | $120K | $0 | $0 |
| Training & change management | $45K | $15K | $10K |
| Internal IT support (0.5 FTE) | $75K | $75K | $75K |
| Total costs | $420K | $270K | $265K |
| Benefits | |||
| Labor efficiency (ramped) | $1.49M (50%) | $2.68M (90%) | $2.98M (100%) |
| Rework reduction | $132K | $238K | $264K |
| Compliance risk reduction | $163K | $293K | $325K |
| Downtime reduction | $100K | $180K | $200K |
| Turnover reduction | $180K | $324K | $360K |
| Total benefits | $2.07M | $3.71M | $4.13M |
| Net benefit | $1.65M | $3.44M | $3.86M |
| Cumulative net benefit | $1.65M | $5.09M | $8.95M |
4.2 Key Metrics
| Metric | Value |
|---|---|
| Payback period | 2.4 months |
| 3-year ROI | 937% |
| 3-year NPV (8% discount) | $7.82M |
| IRR | >500% |
| Annual benefit-to-cost ratio | 4.9:1 (Y1) → 15.6:1 (Y3) |
4.3 Sensitivity Analysis
| Scenario | Assumption Change | 3-Year ROI |
|---|---|---|
| Conservative | 50% of estimated savings | 419% |
| Base case | As modeled | 937% |
| Optimistic | 130% of savings + 20% more WOs | 1,280% |
| Higher license cost (2x) | $360K/yr license | 695% |
| Slower adoption | 40%/70%/90% ramp instead of 50/90/100 | 740% |
| Fewer WOs (1,000/yr) | Half volume | 420% |
Even the most conservative scenario (50% savings, 1,000 WOs) yields 210% 3-year ROI.
5. Competitive Displacement Economics
5.1 Cost of Alternatives
Updated Pricing from B.1.3 Competitive Landscape Analysis:
| Alternative | Annual Cost | Implementation | Time to Value | Limitations |
|---|---|---|---|---|
| Manual (paper + SharePoint) | $6.26M total cost | N/A (status quo) | N/A | No automation, audit gaps |
| ComplianceQuest | $80K-$250K license + Salesforce platform | 6-12 months | 9 months | Salesforce dependency, Agentforce integration unproven |
| Greenlight Guru | $40K-$150K license | 3-6 months | 6 months | Medical device only, no pharma/biotech workflows |
| Veeva Vault QMS | $150K-$500K+ license (enterprise) | 6-9 months | 9 months | Closed ecosystem, premium pricing, no agent orchestration |
| MasterControl | $50K-$150K license ($50/user/month) | 6-9 months | 9 months | Emerging AI, no autonomous agents |
| TrackWise Digital | $500K-$5M+ license (enterprise) | 9-18 months | 12-18 months | Legacy architecture, Honeywell integration overhead |
| Custom build | $0 license + $1.2M dev/yr | 18-24 months | 24 months | Maintenance burden, no compliance pre-built |
| CODITECT WO | $120K-$180K license (mid-stage biotech ICP) | 8-12 weeks | 3 months | Requires PostgreSQL, agent model |
Key Pricing Updates (B.1.3):
- Veeva Vault QMS: Confirmed $150K-$500K+ for enterprise (was $250K in original estimate) — enterprise premium pricing
- ComplianceQuest: $80K-$250K license with Salesforce platform dependency cost (platform tax issue)
- Greenlight Guru: $40K-$150K focused on medical device startups (design control specialty)
- MasterControl: $50/user/month subscription model ($25K+ annual entry point)
Note: ServiceNow and IBM Maximo are not direct QMS competitors in life sciences. ComplianceQuest (Salesforce-native) and Greenlight Guru (medical device specialist) are actual competitive threats per B.1.3 analysis.
5.2 Switching Cost Analysis
| From → To CODITECT | Migration Effort | Risk | Incentive |
|---|---|---|---|
| Paper/SharePoint | Low (greenfield) | Low | Highest (most pain eliminated) |
| ComplianceQuest | Medium (Salesforce data export) | Medium | Eliminate Salesforce platform tax, autonomous agents vs. Agentforce roadmap |
| Greenlight Guru | Medium (medical device data) | Medium-High | Only if expanding from med device to pharma/biotech |
| Veeva Vault | High (ecosystem lock-in) | High | Only if agent-native is strategic priority; cost reduction ($500K → $180K) |
| MasterControl | Medium (data migration) | Medium | Autonomous AI vs. emerging predictive analytics |
| TrackWise | Medium-High (legacy data) | Medium | Modernization, cloud-native, AI augmentation |
| Custom build | Low-Medium (replace, not migrate) | Low | Maintenance burden elimination, FDA-validated compliance |
Cross-Reference: For complete competitive pricing analysis and business model breakdown, see docs/market/competitive-landscape.md Section 4 (Pricing & Business Models).
6. CODITECT Platform Revenue Impact
6.1 WO Module as Platform Anchor
The WO module serves as a strategic entry point because:
- Mandatory for regulated operations — Not optional, every change must be controlled
- High daily interaction — Users interact with WOs 5-20x/day, building platform habit
- Cross-module expansion — WOs naturally connect to document control, training, CAPA, deviation management
- Agent showcase — Demonstrates CODITECT's autonomous capabilities in a concrete, measurable way
6.2 Revenue Expansion Model
| Module | Triggered By | Additional Revenue |
|---|---|---|
| WO (base) | Entry point | $180K/yr |
| Document Control | WO document linking | $120K/yr |
| Training Management | Experience/certification tracking | $90K/yr |
| CAPA Management | WO rejection → CAPA workflow | $150K/yr |
| Deviation Management | Agent-detected compliance deviations | $130K/yr |
| Validation Lifecycle | Asset validation status tracking | $110K/yr |
| Full QMS suite | $780K/yr |
6.3 Net Revenue Retention Model
| Year | Customers | Avg Modules | ARPU | Revenue |
|---|---|---|---|---|
| Y1 | 8 | 1.2 | $216K | $1.73M |
| Y2 | 28 | 2.1 | $378K | $10.6M |
| Y3 | 75 | 2.8 | $504K | $37.8M |
Net revenue retention: ~180% driven by module expansion within existing customers.
7. Investor Metrics Summary
| Metric | Value | Benchmark |
|---|---|---|
| TAM (Broad) | $17.4B | Total economic opportunity (IT infrastructure + services + QMS software) |
| TAM (Focused Software) | $4.35B (2026) → $9.47B (2033) | Life sciences QMS software market (B.1.1 analysis) |
| SAM | $412M (B.1.1 refined) | FDA-regulated, cloud-ready, 50+ employees (NA/EU) |
| SOM (Y3) | $22.5M | Conservative, 5.5% SAM penetration |
| Gross margin | 85%+ | SaaS + negligible token costs |
| CAC payback | <12 months | High-value, low-volume enterprise sales |
| LTV:CAC | >10:1 | Module expansion drives NRR |
| NRR | ~180% | Cross-sell QMS modules |
| Competitive moat | Agent-native + compliance + 12-24 month AI lead | No existing QMS has autonomous agents deployed |
| Time to revenue | 3 months post-implementation | Fast payback for customers |
TAM Presentation Guidance:
- For software market sizing and investor pitches: Use $4.35B (2026) focused life sciences QMS software TAM
- For total economic opportunity and strategic context: Reference $17.4B broad market including IT infrastructure and services
- SAM consistency: Use $412M from B.1.1 analysis for forward planning and market penetration metrics
8. Risk-Adjusted Scenarios
8.1 Bear Case (30% probability)
- Slower enterprise adoption, 4 customers Y1
- Regulatory pushback on AI in change control
- Revenue: $500K Y1, $2.5M Y2, $8M Y3
8.2 Base Case (50% probability)
- As modeled above
- Revenue: $1.7M Y1, $10.6M Y2, $37.8M Y3
8.3 Bull Case (20% probability)
- FDA guidance favorable to AI-assisted QMS
- Strategic partnership with major CRO
- Revenue: $3M Y1, $18M Y2, $65M Y3
Expected Value (Y3): 0.3×$8M + 0.5×$37.8M + 0.2×$65M = $34.3M
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