The ROI of VR

[Updated on March 26, 2024]

One of the primary reasons why some companies are still hesitant to invest in VR is due to the lack of clear ROI (return on investment). However, companies that embraced extended reality (XR) early on can now reflect on its significant impact on their growth. According to a recent study by Forrester, Mixed Reality (MR) yielded a 3-year ROI of 177% for decision-makers.

Drawing from our expertise in VR working with industrial clients since 2004, let’s explore the expected ROI for companies operating in the B2B market when leveraging XR.

1. Costs VS Benefits of a virtual reality solution
2. The ROI of VR in Engineering
3. More and more companies convinced by the ROI of VR

1. Costs VS Benefits of a virtual reality solution

The VR headset market has witnessed intense competition, leading to a decline in prices for both consumer and business VR headsets in recent years. Some headsets, like the Meta Quest 2, have become quite affordable - priced at below $300 for a professional-use headset. While VR and AR headset prices are decreasing, their specifications are improving. AR or VR headsets can enhance long-distance collaborative work, allowing real-time sharing of 3D data.

For those preferring less immersion but still wanting to showcase 3D project improvements during meetings, alternative VR systems like Powerwalls, LED Walls, or Immersive Rooms are available. While these solutions may be pricier than VR headsets, they are better suited for in-person meetings with multiple participants. Thus, investments are needed in both hardware and software, including software for working on 3D data and VR software like TechViz for instant VR data visualization.

To accurately gauge the benefits brought by AR/VR, it's crucial to compare the gains in production time and money against the investment made. VR solutions offer numerous benefits, saving time and money while enhancing service or product quality. Evaluating VR solution effectiveness requires precise quantification and qualification of improvements, such as how VR accelerates processes or reduces design errors and rework.

In 'The Total Economic Impact of Mixed Reality Using Microsoft HoloLens 2,' Forrester's financial analysis indicates a 3-year ROI of 177% for decision-makers using HoloLens 2. This includes a Present Value of $11.9M, a Net Present Value (NPV) of $7.6M, and a payback period of 13 months. The report highlights insights across various industries, showcasing how mixed reality improves field task efficiency, reduces rework, and delivers qualitative benefits such as talent recruitment, employee health and safety, and customer outcomes.

2. The ROI of VR in Engineering

Concrete benefits of using AR or VR:

In Engineering, you can use AR or VR to make virtual project reviews and virtual collaboration over the same 3d project with various stakeholders. Those 2 functions of VR can add very high value in the progress of a project while addressing the challenges decision-makers and engineers are facing.

VR helps:

• • • Accelerating processes
    • Improving product & process quality
    • Reducing time to market
    • Reducing costs in design errors fixing
    • Visualizing a 3D model and viewing task instructions
    • Collaborating from remote
    • Designing and decision-making
    • Fostering innovation mindset
    • Staffing shortages and turnover
      
      

How much does it bring?

According to a study from Capgemini, “three in four companies using VR can attest to operational benefits of over 10%”.

Nvidia reported that “projects that fully integrate VR technologies are seeing a 60-65% reduction in the number of design issues”. When used correctly, ROI of VR can quickly be measured a few months after its integration.

Decrease time to market

VR enhances testing efficiency, allowing simultaneous testing across multiple stages, which starts much earlier than with traditional methods.

Additionally, VR promotes teamwork by visualizing team challenges, facilitating better understanding and collaboration.

For instance, Embraer completed the development of the EMBRAER 170 (E170) in 38 months, compared to 60 months for the previous model (ERJ145), demonstrating measurable time savings with VR investment.

Reduce cost of Redesign

VR enables multiple perspectives, identifying issues earlier in the design process, resulting in significant cost savings. For example, adjustments made during the initial VR visit to the Penn State Ice Rink averted over $475,500 in construction costs. In the automobile industry, Ford reported a 90% reduction in prototype costs by using VR for vehicle design and testing.

And Boeing experienced a 30% decrease in the time required for designing and assembling complex aircraft components through VR simulations.

In The Penn State Ice Rink for example, numerous adjustments to the office space were made at no cost to construction as a direct result of the first CAVE visit, directly averting over $475,500 in changes after or during construction. The total amount of the redesign cost raised to -$500k.

Improve product/process quality:

By giving the ability, the test assembly processes before the start of production, train their workforce and even guide them while during the operation phase, immersive technologies give strong boost to the quality of processes.

For instance, Ford's use of VR technology reduced employee injuries by 70% and ergonomic issues by 90%. This has positive impact on productivity, reduced down time and even employee retention.

Foster Innovation:

While difficult to quantify, VR facilitates proof of concept at lower costs and expedites the presentation of new ideas to management.
Indeed, Virtual reality is a technology that provides endless opportunities to make proves of concept. Obviously resulting to a drastic reduction of costs. Besides, VR makes it easier to push new ideas & projects forward in front of top managers before it gets nipped in the bud.

VR enables Lockheed Martin, for example, to stretch the limits of what’s possible and the possibilities seem limitless.

3. More and more companies are convinced of the ROI of VR

As a matter of fact, whatever the industrial sector, or the engineering project, design errors are inevitable. If detected too late in the development phase, these errors force the teams to go up the entire design chain (back to the drawing board, design modifications on CAD, creation of new prototypes, new tests, etc.). Which often leads to exceeding deadlines and budgets.             

Recent studies demonstrate growing acceptance of VR's ROI across industries. According to Capgemini, 82% of surveyed companies using VR experienced expected or better-than-expected results. Additionally, 50% of companies yet to adopt VR/AR express intent to do so within the next three years.

VR is now considered a reliable project performance booster by leading global companies in engineering and beyond.
Accenture estimates that VR can save businesses up to $11 billion in travel costs annually by facilitating remote collaboration.

According to a survey by HTC Vive, 85% of businesses believe that VR improves communication and collaboration among remote teams.

Still unsure about VR's ROI?

TechViz offers solutions to accelerate processes, allowing direct VR visualization of 3D models from any CAD software without data conversion. Feel free to reach out to us for project assistance or software inquiries."

More articles about working with Virtual Reality:

• How VR is Transforming the Energy Sector

• 3 Questions regarding Digital Trust to ask before Implementing a Virtual Reality Engineering Software