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
| Metric | Value | Notes |
|---|
| ACV | $120K | WO Core + AI + Compliance module |
| CAC (estimated) | $40K | 3-month sales cycle for mid-size biotech |
| LTV (5-year, 10% churn) | $480K | Conservative: no expansion revenue |
| LTV:CAC | 12:1 | Excellent; >3:1 is threshold |
| Gross margin | 85% | SaaS platform, minimal per-tenant infra |
| Contribution margin | 65% | After support and CS costs |
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.