Automation ROI Calculator

Input Variables

Gather these data points before running the calculation:

Variable	Description	Example Value
Hours saved per week	Time eliminated by automating the manual process	12 hours
Hourly cost of labor	Fully loaded cost (salary + benefits / 2080 hours)	$55/hour
Number of affected employees	People who previously performed this task manually	4
Automation tool cost (monthly)	License and infrastructure cost for the automation	$500/month
Implementation cost (one-time)	Setup, configuration, and training time	$3,000
Error rate reduction	Percentage decrease in errors after automation	75%
Cost per error (average)	Revenue lost or rework cost per error occurrence	$200
Errors per month (before)	Number of errors occurring monthly before automation	20

ROI Calculation

Monthly Savings

1. Time savings = Hours saved per week x Hourly cost x Number of employees x 4.33 weeks
   • Example: 12 x $55 x 4 x 4.33 = $11,426/month
2. Error reduction savings = Errors per month x Error rate reduction x Cost per error
   • Example: 20 x 0.75 x $200 = $3,000/month
3. Total monthly savings = Time savings + Error reduction savings
   • Example: $11,426 + $3,000 = $14,426/month

Monthly Cost

4. Ongoing cost = Automation tool cost per month
   • Example: $500/month

ROI Calculation

5. Monthly net benefit = Total monthly savings - Ongoing cost
   • Example: $14,426 - $500 = $13,926/month
6. Payback period = Implementation cost / Monthly net benefit
   • Example: $3,000 / $13,926 = 0.22 months (roughly 1 week)
7. Annual ROI = ((Monthly net benefit x 12) - Implementation cost) / Implementation cost x 100
   • Example: (($13,926 x 12) - $3,000) / $3,000 x 100 = 5,470%

Secondary Benefits to Track

Not all automation value shows up in direct cost savings. Track these additional benefits:

• Speed improvement: How much faster is the process now? (e.g., lead routing time from 2 hours to 2 minutes)
• Consistency: Are outcomes more predictable and standardized?
• Scalability: Can you handle 2x volume without adding headcount?
• Employee satisfaction: Are team members spending less time on repetitive tasks?

Presenting ROI to Leadership

When building the business case, structure your presentation as follows:

1. State the problem (time wasted, errors, bottlenecks) with specific numbers.
2. Show the monthly and annual cost savings using the formulas above.
3. Include the payback period to demonstrate quick time-to-value.
4. Add qualitative benefits (speed, consistency, team morale).
5. Compare the cost of doing nothing vs. the cost of implementation.