Guide · AI in Institutions
Calculate automation value after exception handling and running costs
Automation business cases count the hours saved and forget the hours still spent. Subtract review, exceptions, maintenance and running costs before you believe the saving.
The short answer
Net monthly value is the cost of doing the task by hand, minus review time, the exceptions that still need a person, maintenance and running costs. Divide the build cost by that net saving to get the break-even point, and find out which input moves the answer most before committing.
What the optimistic case leaves out
- Review: someone checks outputs, at least at first.
- Exceptions: the runs that still need a person, usually the slowest ones.
- Maintenance: inputs, formats and systems change.
- Running costs: licences and usage fees, every month.
The calculation
Manual cost is runs × minutes ÷ 60 × staff cost. Automated cost adds review time, exceptions × minutes each and maintenance hours, all at staff cost, plus running costs. The difference is the monthly saving; build cost ÷ saving is the break-even point in months.
A worked example
In the illustrative example in the automation ROI calculator, consolidating partner reports runs 120 times a month at 25 minutes each, with staff time at USD 18 an hour: about USD 900 a month by hand. With three minutes of review per run, 12% of runs still needing 20 minutes of a person’s time, four hours of maintenance and USD 60 of running costs, the automated version costs about USD 326 a month. The saving is about USD 574 a month, and a USD 4,000 build breaks even in about seven months.
Which input matters
The calculator’s sensitivity chart moves seven of the inputs 25% up and down. In the example, the minutes each run takes by hand move the two-year value most, followed by volume and staff cost. If the manual time is a guess, measure it for a fortnight before building anything.
Saved time is not saved money
Freed hours are only value if they are used. Decide in advance what the time will go to, or the saving exists only on paper.
What this guide does not cover
The calculation assumes today’s volumes and error rates hold. Build estimates are yours, and complex integrations often cost more than expected.
Responsible for this guide
Examples in this guide are illustrative, not client results. Figures come from the free tool’s worked example; change the inputs in the tool to see your own.
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