Process Automation Savings
Estimates the financial return of automating a manual process by comparing implementation cost against annual labor savings. Calculates payback period, 3-year ROI, and net present value of the automation investment.
Operations - Process Automation Savings.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- No business case framework for justifying automation investments
- Manual processes consuming expensive labor hours without quantified cost
- Automation proposals evaluated on gut feeling rather than financial analysis
- Inability to compare multiple automation candidates on a common basis
- Stakeholders not understanding the time horizon for automation payback
Who This Is For
- Operations managers proposing automation initiatives
- IT directors evaluating RPA or workflow tool investments
- CFOs reviewing capital expenditure proposals for automation
- Process improvement specialists building business cases
Inputs
- #Current manual hours per month
- $Hourly labor cost for the manual process
- $One-time implementation cost
- $Ongoing monthly maintenance cost
- %Expected automation coverage
- %Discount rate for NPV
Outputs
- Annual labor cost savings
- Net annual savings after maintenance
- Payback period in months
- 3-year ROI percentage
- Net present value (NPV) over 3 years
How Calculations Work
Current manual cost is hours multiplied by labor rate multiplied by 12 months. Automation coverage percentage determines how many hours are eliminated. Annual savings is the eliminated hours cost minus ongoing maintenance cost times 12. Payback period is implementation cost divided by monthly net savings. NPV discounts 3 years of net savings at the given discount rate and subtracts implementation cost.
Example Use Case
Scenario: A data entry process takes 200 hours/month at $28/hr. Automation tool costs $45,000 to implement with $500/month maintenance. It will automate 85% of the work. Discount rate: 8%.
Result: Annual manual cost: $67,200. Annual savings (85%): $57,120. Net annual savings: $51,120. Payback: 10.6 months. 3-year NPV: $86,740. 3-year ROI: 241%.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
What discount rate should I use?
Use your company's weighted average cost of capital (WACC) or internal hurdle rate. 8-12% is common for mid-size companies. If unsure, use 10%.
How do I estimate automation coverage?
Map the manual process steps. Identify which steps can be automated and which require human judgment. Coverage is the percentage of total hours that can be eliminated.
Should I include the cost of employee retraining?
Yes. Add retraining costs to the implementation cost. Ongoing change management costs go into monthly maintenance.
What payback period is acceptable?
Under 12 months is strong. 12-24 months is acceptable for most organizations. Over 24 months requires strong strategic justification.
Does this account for quality improvements?
Only indirectly through reduced error-correction hours. If quality improvements have a direct financial value (fewer returns, lower rework), add that as additional savings in the INPUT.
Download Process Automation Savings
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.