How to calculate automation ROI
Flow HQ · · 6 min read
Automation ROI = (value of time saved + value of errors avoided + revenue recovered − running costs) ÷ build cost. Use conservative estimates, measure the real numbers after launch, and compare.
The three sources of value
- Time saved — hours per month × the cost of one hour of the people doing the work.
- Errors avoided — mistakes per month × the average cost of fixing one.
- Revenue recovered — opportunities that no longer slip through, such as leads that now get a timely reply.
The formula
Monthly value = time saved + errors avoided + revenue recovered − monthly running costs.
Payback period (months) = build cost ÷ monthly value.
First-year ROI = (12 × monthly value − build cost) ÷ build cost.
A worked example
A hypothetical team spends 15 hours a week copying enquiry details into a CRM and sending follow-ups. That's about 65 hours a month. At ₹300 an hour of staff time, the time alone is worth about ₹19,500 a month.
Suppose better follow-up also wins two extra customers a month worth ₹5,000 each — ₹10,000. Running costs are, say, ₹3,000 a month. Monthly value: ₹19,500 + ₹10,000 − ₹3,000 = ₹26,500.
If the build cost were ₹1,00,000, payback would take just under four months.
All figures are examples for illustration. Use your own numbers — and be conservative.
Measure after launch
Estimates are a starting point. After launch, track the same numbers: hours spent on the process, reply times, follow-up rates and conversions. Real data tells you whether to expand the system or adjust it.