A Simple Guide to Calculating Your Automation ROI
In this post, I'll share how to calculate the return on investment (ROI) for automating tasks in your business. We'll break down ROI into two categories: Hard ROI and Soft ROI.
Hard ROI includes easily measured factors like time and cost savings, while Soft ROI covers less tangible aspects like improved well-being and customer satisfaction. You can read on to learn how to calculate both types of ROI and unlock the full potential of automation for your business.
Finding Quick Wins: Low-Hanging Fruit for No-Code Automation
Automating small tasks is the best way to overcome friction if you're new to automation. To identify potential tasks to automate:
- Complete the exercise
- Set a timer for 5 minutes and write down tedious tasks that come to mind. (Duplicate this cheat sheet)
Then, explore Zapier or Make for the necessary software to automate these tasks and note the available Triggers and Actions in this Scribe (tutorial).
Understanding ROI: Types and Calculations 💰
ROI, or return on investment, measures the effectiveness of an investment, such as automations in your business. There are two types of ROI: Hard ROI and Soft ROI.
Hard ROI is easier to quantify and includes:
- Time saved
- Increased productivity
- Money saved from labor costs
Soft ROI is harder to measure but equally valuable and includes:
- Reduction in human errors
- Increased well-being and reduced stress
- Happier customers due to consistent service
Calculating ROI for No-Code Automations 📊
To calculate Hard ROI, use the following formula:
Formula:
Time (spent on one task) x Frequency (of performing tasks per month) x
Cost (per hour) x 12 Months = Yearly ROI
Duplicate this template to help you calculate ROI. Note that this formula assumes that automation will eliminate the need for human labor for each task. If automation only reduces the time required or requires some human oversight, the ROI will be lower than calculated using this formula.
Calculating Soft ROI is more challenging, but assigning it a monetary value is still essential to get a more accurate picture of your overall ROI. Download this spreadsheet to help you calculate Soft ROI.
Thanks for reading. Let me know if you have any questions 🙂
