SAAKA

Practical resource

How to calculate automation ROI without counting capacity as cash

Calculate released hours first, then apply an explicit realization percentage only to the portion that can genuinely change cash expenditure. Add separate non-overlapping cash savings, subtract recurring costs, and show one-time cost, payback, and first-year return using stated assumptions.

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Illustrative technician reviewing production information beside a component inspection station
01

Understand

Equations

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Monthly hours released = transactions × (current minutes − future minutes) ÷ 60

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Monthly capacity value = hours released × loaded hourly labor cost

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Realized labor savings = capacity value × realization percentage

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Monthly net cash benefit = realized labor savings + other non-overlapping cash savings − recurring cost

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Simple payback = implementation cost ÷ positive monthly net cash benefit

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First-year net benefit = 12 × monthly net cash benefit − implementation cost

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First-year ROI = first-year net benefit ÷ (implementation cost + 12 × recurring cost) × 100

02

Understand

Worked example

Suppose 600 monthly transactions fall from 12 to 5 active minutes. That releases 70 hours. At $30 per loaded hour, capacity value is $2,100/month. With 0% cash realization and no other cash savings, realized labor savings are $0. If recurring cost is $500/month, net cash benefit is −$500 and there is no payback under these assumptions.

If a supported staffing or overtime change justified 40% realization, realized labor savings would be $840. Net cash benefit would be $340/month. With $12,000 implementation cost, simplified payback would be about 35.3 months. This still omits ramp-up, tax, financing, and unentered costs.

03

Apply

Capacity versus cash

Reassigned time can improve responsiveness or release capacity for other work, but it does not reduce cash expenditure automatically. Report capacity value and cash benefit separately. Avoid counting the same labor change again under 'other savings'.

04

Review

What to include in cost

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Discovery, design, build, integration, testing, migration, and training

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Licenses, hosting, monitoring, support, and internal administration

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Parallel running, exception handling, process ownership, and vendor changes

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Contingency for known uncertainty—kept visible, not buried

05

Review

Use the calculator

Enter your own assumptions in the automation ROI calculator. Results are available without providing contact details.

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Related routes through the site

01

Services

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02

Operational solutions

How can we reduce manual data entry in manufacturing?
03

Resources and tools

Estimate the value of automating one workflow
01

Start with one process

Which workflow currently costs your team the most time?

Bring one normal example and one exception. Use them to frame the systems, decisions, controls, and evidence a sensible next step needs.

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