Engineering leaders know automation drives productivity. But quantifying that value? That's where most initiatives stall. This framework gives you the tools to calculate real ROI and build compelling business cases for automation investment.
Before calculating automation ROI, you need to understand the full cost of manual work. It's not just time—it's opportunity cost, error rates, and cognitive load.
But this basic formula misses the compound effects. Here's the complete framework:
Formula: Hours Saved per Week × 52 × Average Hourly Rate
Example: 10 hours/week × 52 × $150/hr = $78,000/year
Formula: (Error Rate × Error Cost × Frequency) × Reduction %
Example: (0.15 × $75,000 × 4/year) × 0.90 = $40,500/year
Formula: (Feature Delivery Rate × Revenue per Feature) × Improvement %
Example: (12 features/year × $250,000) × 0.25 = $750,000/year
Formula: Base Value × (1 + Growth Rate)^Years
Example: $100,000 × (1.15)^3 = $152,087 over 3 years
Annual ROI: $1.2M (400% return in year one)
Annual ROI: $450K (300% return, enabled Series A)
A compelling automation business case needs more than just numbers. Here's how to build one that gets approved:
Document time spent, error rates, and opportunity costs. Use time tracking and incident data.
Set clear, measurable goals. Lead time reduction, error rate improvement, velocity increase.
Include all benefits: time savings, error reduction, velocity gains, and compound effects.
Demonstrate when the investment breaks even and projected returns over 1, 2, and 3 years.
Use our interactive calculator to model your specific automation opportunities:
Launch ROI CalculatorThe real magic of automation isn't in the immediate time savings—it's in the compound effects over time:
A 10% monthly improvement compounds to 3x annual improvement. That's the difference between linear and exponential growth.
Let's quantify the value of automation for your specific team and build a compelling business case.