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Automation ROI: How to Calculate Payback Before You Deploy

Alex Rivera
Nov 5, 2024
9 min read

The first question every operator asks before signing off on an installation: will this pay for itself? It should be answered with math, not promises. Here is the exact ROI framework we use to scope every Dynamanic! deployment. Use it to evaluate any automation investment.

Step one: quantify the labor cost of the process you are automating. If you are automating support triage, calculate the fully loaded cost of your team's time spent routing, categorizing, and assigning tickets. Include salaries, benefits, management overhead, and the opportunity cost of what those hours could produce elsewhere. If you are automating document processing, calculate hours spent on manual data entry plus the cost of errors that require rework. These are your baseline numbers. Everything gets measured against them.

Step two: project direct labor savings. Most automation systems can tell you their throughput capacity and the percentage of tasks they handle without human intervention. If a support routing system handles 70% of ticket triage automatically, and your team currently spends 40 hours per week on triage, the direct savings is 28 hours per week. Multiply by your blended hourly rate. Be conservative. Use 50-70% of the vendor's claimed efficiency as your planning number. Over-promising kills trust.

Step three: account for indirect value. This is where most ROI calculations fall short. Faster response times increase customer retention, which drives repeat revenue. Reduced manual work lowers burnout and turnover, saving recruitment and training costs. More accurate data leads to better operational decisions that compound over time. The ability to scale throughput without adding headcount gives you margin leverage as you grow. These indirect benefits often exceed the direct labor savings within 12 months.

Step four: build the total cost model. Beyond the subscription or installation fee, include: engineering time for integration, team hours for training and calibration, the productivity dip during the first 2-4 weeks of deployment, and ongoing monitoring costs. A realistic payback period for most Dynamanic! installations is 2-4 months. If the projected payback exceeds 6 months, either the automation target is wrong or the implementation plan needs to be scoped tighter. We do not install systems with uncertain ROI.

Tags:ROIOperationsFinance
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