"What's the ROI?" It's the first question every business owner asks about automation — and it's the right question. But calculating ROI on automation isn't always straightforward.
Here's a practical framework we use with clients to measure the real return on workflow automation.
The Basic Formula
At its simplest, automation ROI is:
ROI = (Time Saved × Hourly Value - Cost of Automation) / Cost of Automation × 100
But this formula misses a lot. Let's break down what actually goes into each component.
Measuring Time Saved
Start by documenting the current process:
- Map every step — Write down exactly what happens from trigger to completion
- Time each step — How long does each part take?
- Count frequency — How often does this process run per week/month?
- Identify who's involved — What's their hourly cost to the business?
Be honest here. Most people underestimate how long tasks actually take because they don't account for:
- Context switching (the mental cost of stopping other work)
- Error correction (fixing mistakes from manual processes)
- Follow-up (chasing people when things fall through cracks)
A task that "takes 5 minutes" often really takes 15-20 minutes when you account for these factors.
Calculating Hourly Value
Don't just use salary. Use the fully loaded cost of an employee:
- Base salary
- Benefits (typically 20-30% of salary)
- Overhead (office space, equipment, software)
For most professional roles, multiply salary by 1.4-1.5 to get true hourly cost.
But here's the real insight: time saved isn't just about cost reduction. It's about capacity creation.
If your $80,000/year salesperson saves 10 hours per week on admin tasks, you're not saving $20,000 in salary. You're creating 10 additional hours per week for revenue-generating activities. If they close one extra deal per month because of that time, the ROI calculation changes dramatically.
The Hidden Benefits
Our framework includes factors most ROI calculations miss:
1. Error Reduction
Manual processes have error rates of 1-5%. Automated processes have error rates near zero. What does fixing errors cost you?
- Time to identify the error
- Time to correct it
- Customer goodwill lost
- Potential refunds or make-goods
2. Speed Improvement
Faster processes often mean faster revenue. If automation reduces your quote-to-close time from 5 days to 1 day, you'll close more deals before competitors can respond.
3. Scalability
Manual processes don't scale. If your business grows 50%, manual processes require 50% more labor. Automated processes handle increased volume with minimal additional cost.
4. Employee Satisfaction
This one's hard to quantify but real. People don't like doing repetitive tasks. Automation lets your team focus on meaningful work, reducing turnover and increasing engagement.
A Real Example
Let's look at a lead response automation we built for a consulting firm:
Before:
- 50 leads/month via contact form
- Admin manually checks form submissions 3x/day
- Each lead takes 10 minutes to process (add to CRM, send acknowledgment, notify sales)
- Average response time: 4-6 hours
- Lead-to-meeting conversion: 15%
After automation:
- Instant response to all leads (< 60 seconds)
- Zero manual processing time
- Lead-to-meeting conversion: 28%
ROI Calculation:
Time saved: 50 leads × 10 minutes = 8.3 hours/month
Hourly cost: $45/hour
Monthly time savings: $375
But the real value: 13% improvement in conversion rate
50 leads × 13% = 6.5 additional meetings/month
Average deal value: $5,000
Close rate from meeting: 30%
Additional monthly revenue: 6.5 × 30% × $5,000 = $9,750
Automation cost: $3,500 one-time + $200/month maintenance
First-year ROI: ($117,000 + $4,500 - $5,900) / $5,900 = 1,961%
That's not a typo. When automation improves conversion rates — not just saves time — the returns can be extraordinary.
The Framework
When evaluating any automation project, calculate:
- Direct time savings (hours × cost)
- Error reduction value (errors × cost to fix)
- Speed improvement value (faster cycles × revenue impact)
- Scalability value (growth capacity without added headcount)
- Conversion improvement (if applicable)
Then compare against:
- One-time setup cost
- Ongoing maintenance cost
- Training and adoption time
If the first-year return is 3x or better, it's almost certainly worth doing. If it's 10x or better (common with lead response and sales automations), do it immediately.
Next Steps
Not sure where to start? We offer a free automation audit that identifies your highest-ROI opportunities. No obligation — just a clear picture of where automation could move the needle for your business.