Automation ROI Calculator

Automation ROI is calculated by comparing what you currently spend (labour + error cost) against what you will save (recovered time + fewer errors) minus the ongoing technology cost. This calculator models the most common case: a manual, repeatable process done by multiple staff members, where errors generate rework, refunds, or remediation costs.

How to set your hourly cost

The "hourly cost" figure should include salary, employer NI/pension, benefits, and overhead (desk, equipment, management time). A simple rule of thumb: take annual salary, multiply by 1.3 for total employment cost, then divide by 1,760 (annual working hours). A £35,000/year employee costs approximately £26/hour in salary alone — about £34/hour with overhead. Use £30–£45/hour for most office roles, £50–£80/hour for specialist technical staff.

The 90% labour saving assumption

This calculator assumes 90% of the time currently spent on the process is recoverable. It does not assume 100% because automated systems still require monitoring, exception handling, and occasional manual intervention. For highly structured, rules-based processes (data entry, report generation, invoice matching) 90–95% recovery is realistic. For processes with frequent exceptions, model 60–75%.

Beyond direct savings, automation typically improves quality (consistent output, no fatigue errors), speed (hours or days reduced to seconds or minutes), and staff morale (repetitive data-entry work is a common attrition driver). These benefits do not appear in this model but should be included in a full business case.

Automation ROI calculations fail far more often on the baseline than on the arithmetic. If you do not know what the manual process costs today, every downstream number is fiction.

The four figures you need

• Volume — how often the process runs per week. Count it; do not estimate. People misjudge frequency by a factor of two routinely.
• Handling time — how long one run really takes, including chasing and context switching. Time five real instances rather than asking.
• Touch count — how many people are involved. Cross-department processes carry coordination cost no single person's estimate captures.
• Failure rate — how often it goes wrong and what fixing it costs. Rework is usually the largest hidden line.

A useful threshold: if a process costs under roughly £3,000 a year, automating it rarely pays back however irritating it is. Irritation and cost are different things.

Payback or ROI?

Payback period answers “when do I get my money back?” — the right metric when cash is tight or the process may change soon. ROI answers “how much value does this create?” and normalises for project size, making it the right one when comparing competing projects. Six to eighteen months payback is the normal target for internal tooling.

Include the running costs

Hosting, third-party API fees and maintenance all belong in the model. Most working automations need one to two hours of attention a month; leaving that out is the most common reason a projected return fails to appear.

The benefits you cannot price

Cycle time, consistency and staff retention rarely make the spreadsheet but often matter more than the labour saving. List them as named, unpriced benefits rather than inflating the hours saved to compensate — that is more credible to anyone scrutinising the case.