Automation business case — Process to automate
Deterministic costing: same input, same result. The assumptions are listed at the end.
- Horizon
- 24 months
- Proposed decision
- Green light
Paid back within a year, and profitable even in the cautious case. The case stands as it is.
The situation today
- Volume
- 800 items / month
- Manual time
- 12 min / item
- Total workload
- 160 h / month
- Loaded hourly cost
- €55/h
- Current error rate
- 3 %
The project
- Target automated share
- 60 %
- Review per automated item
- 2 min
- Residual error rate
- 2 %
- Build
- €25,000
- Run cost
- €450 / month
- Ramp-up
- 3 months
The result
| Measure | Central | Range |
|---|---|---|
| Net annual gain, at run-rate | €33,000 | €15,000 — €50,000 |
| Paid back in | 10.3 mo | 7.2 mo — 20.8 mo |
| Hours freed per month | 72 h | 56 h — 80 h |
| Cumulative over 24 months | €37,000 | €4,100 — €70,000 |
| Minimum profitable monthly volume | 375 | — |
The annual detail, at run-rate
| Line | Amount | Type |
|---|---|---|
| Build and deployment | €25,000 | One-off |
| Annual run cost | €5,400 | Cost |
| Human review of automated items | €9,500 (€7,400 — €11,000) | Cost |
| Handling time saved | €46,000 (€27,000 — €63,000) | Gain |
| Errors avoided | €2,100 (€1,600 — €2,300) | Gain |
At run-rate, the net gain is €33,000 (€15,000 — €50,000) a year. Over 24 months, build deducted and ramp included, the cumulative result is €37,000 (€4,100 — €70,000).
Conditions for success
Assumptions
- Share of the planned rate actually achieved : 70 % — 100 % — A rate measured on a clean sample rarely holds on the full flow, exceptions included. The central case keeps 90% of the planned rate.
- Conversion of freed time into value : 60 % — 100 % — Higher than for a general assistant, because the time is concentrated in one team and can be redeployed. Not 100% either: some of it dissolves.
- Review at the full hourly rate : €55/h — Review time is counted without discount: it is certain time, unlike freed time.
- Adoption ramp : 3 months — The gain arrives gradually; the run cost starts in month one.
- Working hours per month : 133 h — 1,600 h a year net of leave — to convert hours into full-time equivalents.
Sign-off
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