1. Count the time, not the task
Pick one process and measure three things: how many minutes it takes each time, how many times it happens in a week across everyone who does it, and how many people are involved. Time it for a week if you can. Estimates from memory are usually low, because nobody remembers the interruptions, the corrections and the waiting.
Multiply the minutes by the weekly count and divide by 60. That is the hours this process consumes every week.
2. Use the loaded cost of an hour
An employee costs more than their hourly wage. Payroll taxes, benefits and paid time off all add to it. Use that loaded figure, not the wage. If you do not know it, your bookkeeper or payroll provider can give you a reasonable number.
Multiply the weekly hours by the loaded hourly cost, then by the number of working weeks in a year. Using both 46 and 52 weeks gives a range that allows for holidays and time off instead of a single number that looks more precise than it is.
3. Add what mistakes and delays cost
Time is only part of the cost. Ask what happens when this process goes wrong or runs late:
- Invoices sent late or with the wrong amount
- Customers who wait for a reply or a confirmation
- Records that disagree and have to be reconciled
- Work that stops when the one person who knows the steps is away
Put a monthly figure on the corrections you already make. If you cannot, leave it out and treat your result as the floor, not the full cost.
4. Be conservative about what automation removes
Automation rarely removes every minute of a task. Someone still reviews the exceptions, approves the unusual cases and checks the results. Assume it removes most of the time, not all of it, and test the assumption on your own process before you rely on it.
A Worked Example
- 2 people
- doing the work
- 15 minutes
- each time
- 40 times a week
- across everyone
- $35 an hour
- loaded cost per person
- About 10 hours a week, or $16,100 to $18,200 a year across 46 to 52 working weeks.
- If automation removes 80 percent of that time, the yearly saving is about $12,880 to $14,560.
- Against a build starting at $5,000, that pays for itself in about 4 to 5 months, before any ongoing platform fees.
5. Compare it with the full cost of automating
The comparison is not the yearly cost against the price of the build alone. Include everything that comes with it:
- The one-time cost of building and testing it
- Ongoing platform, hosting or per-run fees, paid to those providers
- Upkeep when a connected system changes, done by your team or under a partnership
- The time your team spends reviewing exceptions
Divide the one-time cost by the monthly savings after ongoing fees. That is the number of months the build takes to pay for itself.
6. Know when the numbers say no
Automation is not always worth it, and the arithmetic will tell you. It usually is not when:
- The process happens a few times a month
- Every case needs a judgment call nobody can write down
- The process or the software is about to change
- The payback period is longer than the process is likely to stay the same
In those cases, a clearer checklist or a small change to an existing tool is often the better investment.
Try it with your own numbers
Enter your process below. The result is an estimate from your inputs, not a quote or a promise of savings.
Wages plus taxes and benefits. $40 is a common starting point.
Estimated annual cost of this work
$9,200 to $10,400
About 260 hours a year
An estimate from the numbers you entered, not a quote and not a promise of savings. Automation rarely removes every minute of a task.
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