Most automation projects are approved on a feeling: “this takes forever, let’s automate it”. A short calculation makes the decision clearer — and tells you which process to automate first.
The formula
Monthly saving = hours saved per day × hourly cost × working days × people
For example, if an engineer spends 3.5 hours a day on reports that could be generated automatically, at $40 per hour and 22 working days a month:
3.5 × $40 × 22 ≈ $3,080 per month per engineer
With five engineers, that is over $15,000 a month — before counting fewer errors.
Getting the inputs right
Hours saved. Measure, don’t guess. Ask two or three people to log how long the task takes for a week. Count only time the automation really removes — reviewing an automated report still takes a few minutes.
Hourly cost. Salary divided by about 1,800 working hours a year gives a conservative rate. Employer cost — taxes, benefits, equipment — is higher, so an estimate based on salary is a floor, not a ceiling.
Working days. Around 22 per month is a reasonable default for full-time staff.
What the formula leaves out
- Errors. Manual copying causes mistakes that cost money later: wrong invoices, rejected reports, rework. These are harder to price but often matter more than the time.
- Speed. A report that is ready at 9:00 instead of Friday afternoon changes decisions.
- Maintenance. Automations need monitoring and occasional updates. Budget a few hours a month.
Compare with the build cost
Divide the build cost by the monthly saving to get the payback period. A process that saves $3,000 a month and costs $9,000 to automate pays for itself in about three months. If payback is longer than a year, look for a smaller first step.
A practical order of work
- List repetitive tasks and log their time for one week.
- Calculate the monthly saving for each.
- Automate the one with the best saving-to-effort ratio first.
- Run it alongside the manual process until the team trusts it.
- Report the actual saving — and use it to justify the next step.