Is process automation worth it? How to work it out in ten minutes
5 min read
Short answer
Process automation pays off when a task comes up regularly and in volume, follows clear rules, and the investment pays for itself through saved working time within one to two years. For a first estimate you need three numbers: cases per month, minutes per case and the internal cost of an hour of work.
What does this mean for your company? Book an intro call
Automation always sounds good. Whether it pays off is not a matter of belief, though, but of arithmetic. For a first estimate you need three numbers and ten minutes.
The three numbers
- How often does the task come up? Count the cases per month, for example incoming invoices, quotes or inspection reports.
- How long does one case take? Measure realistically, including searching, asking around and correcting.
- What does an hour of work cost? Not just the gross wage, but the full cost of the position.
The calculation
Cases per month times minutes per case times twelve, divided by sixty: that is the working time per year in hours. Multiply by the hourly cost to get the annual cost of the task.
An example: 400 invoices a month, 12 minutes each, 45 euros per hour. That is 960 hours, or around 43,000 euros a year.
Stay realistic
A task can rarely be automated one hundred percent. Exceptions, queries and checks stay with people. It is safer to assume sixty to eighty percent. Also subtract ongoing costs for software and maintenance.
In the example, seventy percent leaves around 30,000 euros of savings a year. If the implementation costs 20,000 euros, it pays for itself after about eight months. If the one-off investment pays for itself through saved time within one to two years, a closer look is worthwhile.
When automation usually does not pay off
- The task is rare.
- Every case is different and needs judgement.
- The process itself is currently being rebuilt.
In these cases it is often wiser to simplify the process first and think about technology afterwards. And if AI tools are meant to be part of the solution, the five rules for a safe start with ChatGPT are worth a look.
Try it yourself
With the automation calculator you can run the numbers for your own tasks, without signing up. If the result looks interesting, we will work it out in an intro call with your real numbers.
Julius Launhardt automates processes in small and mid-sized companies and works out honestly beforehand whether the effort pays off. More on the process automation page.
Frequently asked questions
What level of automation should I assume?
Rarely one hundred percent. Exceptions, queries and checks stay with people. For a cautious estimate, sixty to eighty percent is realistic.
Which costs are missing from the simple calculation?
Ongoing costs for software, hosting and maintenance. Subtract them from the annual savings before you work out the payback period.
Which hourly rate is the right one?
Not the gross wage but the full cost of the position, including employer contributions. If in doubt, ask your accounting team for a realistic internal hourly rate.
What payback period makes a project worthwhile?
As a rule of thumb, one to two years. Longer periods can make sense if automation also prevents errors or allows growth without new hires.