Automation ROI Calculator
ANA›Life Services Authority›National Calculator Authority›Automation ROI Calculator
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Automation ROI Calculator
Estimate the financial return on your automation investment by comparing implementation costs against labor and efficiency savings over time.
Total Implementation Cost ($)
Software, hardware, integration, and setup costs
Annual Maintenance & Licensing Cost ($/year)
Ongoing support, subscriptions, and upkeep
Hours Saved Per Week (hours)
Total manual labor hours eliminated per week
Average Hourly Labor Rate ($/hour)
Fully loaded cost including benefits (typically 1.25–1.4× base wage)
Annual Error & Rework Cost Savings ($/year)
Reduced costs from fewer mistakes, returns, or corrections
Other Annual Savings ($/year)
Throughput gains, compliance savings, reduced overtime, etc.
Analysis Period (years)
Typical automation projects are evaluated over 3–5 years
Discount Rate / Cost of Capital (%)
Used for NPV calculation; use your WACC or hurdle rate (commonly 8–12%)
Calculate ROI
function autCalc() { const implCost = parseFloat(document.getElementById('aut-impl-cost').value); const annualMaint = parseFloat(document.getElementById('aut-annual-maint').value); const hoursSaved = parseFloat(document.getElementById('aut-hours-saved').value); const hourlyRate = parseFloat(document.getElementById('aut-hourly-rate').value); const errorSavings = parseFloat(document.getElementById('aut-error-savings').value); const otherSavings = parseFloat(document.getElementById('aut-other-savings').value); const years = parseInt(document.getElementById('aut-years').value); const discountRate = parseFloat(document.getElementById('aut-discount-rate').value);
const resultDiv = document.getElementById('aut-result');
// --- Validation --- const errors = []; if (isNaN(implCost) || implCost 20) errors.push("Analysis Period must be between 1 and 20 years."); if (isNaN(discountRate) || discountRate 50) errors.push("Discount Rate must be between 0% and 50%.");
if (hoursSaved > 0 && isNaN(hourlyRate)) errors.push("Please enter an Hourly Labor Rate to calculate labor savings.");
if (errors.length > 0) { resultDiv.style.display = 'block'; resultDiv.innerHTML = 'Please fix the following:' + errors.map(e => '').join('') + ''; return; }
// --- Core Calculations --- // Annual labor savings: hours/week × 52 weeks × hourly rate const annualLaborSavings = hoursSaved * 52 * hourlyRate;
// Total annual gross savings const annualGrossSavings = annualLaborSavings + errorSavings + otherSavings;
// Total annual net savings (after maintenance) const annualNetSavings = annualGrossSavings - annualMaint;
// Simple Payback Period (years) = Implementation Cost / Annual Net Savings let paybackYears = null; let paybackMonths = null; if (annualNetSavings > 0) { paybackYears = implCost / annualNetSavings; paybackMonths = paybackYears * 12; }
// Total net savings over analysis period (undiscounted) const totalNetSavings = (annualNetSavings * years) - implCost;
// Simple ROI % = (Total Net Savings / Implementation Cost) × 100 let simpleROI = null; if (implCost > 0) { simpleROI = (totalNetSavings / implCost) * 100; }
// NPV Calculation // NPV = -C0 + Σ [Annual Net Savings / (1 + r)^t] for t = 1 to n // where r = discount rate as decimal const r = discountRate / 100; let npv = -implCost; let npvTable = []; let cumulativeCashFlow = -implCost;
for (let t = 1; t 0 && annualNetSavings > 0) { let lo = -0.999, hi = 10.0; for (let i = 0; i 0) lo = mid; else hi = mid; } if (irr === null) irr = (lo + hi) / 2; }
// --- Format helpers --- const fmt = v => '$' + v.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0}); const fmtD = v => '$' + v.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}); const pct = v => v.toFixed(1) + '%';
// --- Build table rows --- let tableRows = npvTable.map(row => '' + '' + row.year + '' + '' + fmt(row.grossSavings) + '' + '' + fmt(row.maint) + '' + '' + fmt(row.netSavings) + '' + '' + fmt(row.pv) + '' + '= 0 ? '#27ae60' : '#e74c3c') + '">' + fmt(row.cumulative) + '' + '' ).join('');
// --- Payback display --- let paybackDisplay = ''; if (annualNetSavings Never (annual costs exceed savings)'; } else if (paybackYears > years) { paybackDisplay = '> ' + years + ' years (beyond analysis period)'; } else { const py = Math.floor(paybackYears); const pm = Math.round((paybackYears - py) * 12); paybackDisplay = py + ' yr ' + pm + ' mo (' + paybackYears.toFixed(2) + ' years)'; }
// --- ROI rating --- let roiRating = '', roiColor = ''; if (simpleROI === null) { roiRating = 'N/A'; roiColor = '#888'; } else if (simpleROI >= 200) { roiRating = 'Excellent'; roiColor = '#27ae60'; } else if (simpleROI >= 100) { roiRating = 'Strong'; roiColor = '#2ecc71'; } else if (simpleROI >= 50) { roiRating = 'Good'; roiColor = '#f39c12'; } else if (simpleROI >= 0) { roiRating = 'Marginal'; roiColor = '#e67e22'; } else { roiRating = 'Negative'; roiColor = '#e74c3c'; }
resultDiv.style.display = 'block'; resultDiv.innerHTML = ` ### Automation ROI Results
Simple ROI
${simpleROI !== null ? pct(simpleROI) : 'N/A'}
${roiRating} over ${years} yr${years>1?'s':''}
Payback Period ${paybackDisplay} Time to recover investment
Net Present Value =0?'#27ae60':'#e74c3c'}">${fmtD(npv)} At ${pct(discountRate)} discount rate
IRR ${irr !== null ? pct(irr*100) : 'N/A'} Internal Rate of Return
Annual Labor Savings ${fmt(annualLaborSavings)} ${hoursSaved} hrs/wk × 52 × ${fmt(hourlyRate)}/hr
Annual Gross Savings ${fmt(annualGrossSavings)} Labor + error + other savings
Annual Net Savings =0?'#27ae60':'#e74c3c'}">${fmt(annualNetSavings)} After maintenance costs
Total Net Savings (${years} yr) =0?'#27ae60':'#e74c3c'}">${fmt(totalNetSavings)} Undiscounted, after impl. cost
#### Year-by-Year Cash Flow
Year Gross Savings Maintenance Net Cash Flow PV of Cash Flow Cumulative (incl. impl.)
${tableRows}
- Year 0 investment of ${fmt(implCost)} is reflected in the cumulative column. PV discounted at ${pct(discountRate)} per year.
`; }
#### Formulas Used
Annual Labor Savings = Hours Saved per Week × 52 × Hourly Labor Rate
Annual Gross Savings = Annual Labor Savings + Error & Rework Savings + Other Annual Savings
Annual Net Savings = Annual Gross Savings − Annual Maintenance & Licensing Cost
Simple Payback Period = Implementation Cost ÷ Annual Net Savings
Simple ROI = [(Annual Net Savings × Years − Implementation Cost) ÷ Implementation Cost] × 100%
Net Present Value (NPV) = −C₀ + Σ [Annual Net Savings ÷ (1 + r)ᵗ] for t = 1 to n
where C₀ = implementation cost, r = discount rate (decimal), n = analysis period in years
Internal Rate of Return (IRR) = rate r* such that NPV = 0; solved numerically via bisection
#### Assumptions & References
- References: Brigham & Houston, Fundamentals of Financial Management (16th ed.); McKinsey Global Institute, A Future That Works: Automation, Employment, and Productivity (2017).
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