How do you calculate the ROI of automation?
Automation ROI is straightforward: (hours saved per week × hourly cost of the person × 52) − (build cost + annual operating cost). If the result is positive in year one, the automation is worth building. Most workflows that meet the weekly-repetitive-predictable filter clear this bar inside a single quarter.
The honest ROI formula has three inputs. First, hours saved per week, measure this before the build, not after, by literally timing the manual process for two weeks. Second, the loaded hourly cost of whoever does the work today (salary plus benefits plus opportunity cost, divided by working hours per year). Third, build cost plus annual operating cost, agency fee plus SaaS plus infrastructure plus your own time.
Plug it in. A founder spending five hours a week on lead triage at a €200 loaded hourly rate is burning €52,000 per year on that one task. A €15,000 build plus €3,000/year of running cost pays back in roughly four months. After that, every year is pure return.
Two cautions. First, hours saved is real value only if the time gets reallocated to higher-leverage work. Second, soft factors, fewer errors, faster customer response, less burnout, are real value that doesn't fit neatly in the formula. Don't double-count them, but don't ignore them either.
- →Automation ROI examples
- →How to measure automation success
- →Hidden costs of automation
- →When does automation NOT pay back?