The right question isn't when you get your money back
When someone asks how long an automation takes to pay for itself, they usually have the classic sum in mind, I put out a large figure now and then I count the months it takes to get it back
That sum makes sense when you buy a machine, or when you pay for software all at the start, because there you have a hole to fill, and the real question is how long you take to fill it
With a monthly fee there is no hole, you don't put out the large figure, so there's nothing to get back, and the question changes shape, it becomes much simpler and also stricter
The comparison is between two numbers, and that's where it ends
With a fee you put what you pay every month on one side of the scales, and what you stop spending every month on the other, and you look
If the fee sits below, the sums add up from the first month, there's no break-even point to wait for, there's no chart that crosses over after two years, the month you start paying is the same month you start not spending on the other side
If the fee sits above, no amount of time fixes it, the month after will be the same, and so will the month after that
The number to put on the savings side
The delicate part isn't the division, it's working out what you have the right to write on the savings side, because that's where almost everyone cheats, often without noticing
What goes there is the time that really disappears, that is the hours a person spends today on the mechanical part of that process, valued at the company hourly cost, what that hour costs you all in, not the net figure that ends up on the payslip
The whole process doesn't go there, because inside it there's a part that calls for experience and stays with a person, the odd case, the decision taken by looking at the context
The benefits you like but can't measure don't go there either, having the data up to date sooner, sleeping more soundly, looking good in front of your accountant, they're real things and they may even be the reason you want to do it, but they aren't numbers, and put into the sum they dirty it
Keep them out, if the sums add up anyway those come as a gift, if the sums add up only thanks to them then they don't add up
The whole sum, with made-up numbers
Now the numbers, and they're made up here, they only serve to show how it's done, they aren't anybody's data
Let's say one person works on the process, two hours a day, twenty days a month, that's forty hours a month
Let's say that looking at ten files in a row you see six of them go through smoothly with no thinking involved, and four call for a head, then the mechanical part is roughly six tenths, that is twenty-four hours a month
You multiply those twenty-four hours by your company hourly cost, yours, not one I hand you, and you have the figure you would stop spending every month
From that figure take a little more off, because no automation removes a hundred per cent of the mechanical work, a few cases end up in a queue and a person looks at them
The number left over is the one you compare with the fee, and there's only one question, does the fee sit comfortably below it
Comfortably below means with a visible margin
Comfortably means the difference shows at a glance, without putting back into the sum the things you had just kept out, if the sums add up only that way it isn't the sums adding up, it's your wish that they would
A narrow margin is a problem even when it's positive, because the time you estimated is an estimate, and if you're off by a little you find yourself below zero without noticing
If it takes acrobatics with the numbers, the answer has already arrived, it isn't yet the moment to automate that process, and that's perfectly fine, you'll have another one that adds up with no effort
The two things the sum doesn't tell you
The sum is a division, and like every division it knows nothing about what you have around you
It doesn't know that those hours, taken away from data entry, may not turn into savings on the payslip but into work that today stays behind, and then the saving is real but changes face, you don't pay less, you do more with the same people, and it's something you have to decide beforehand, not afterwards
It doesn't know either that an automated process has to be looked after over time, because programs get updated and suppliers change their forms, and that's the reason Muffin Suite works on a fee and not on a closed project, with development, use, support, fixes and maintenance inside it
On subscription you'll find how the fee is put together, and in Work out the savings there's the calculator that does the multiplication of the hours for you, the numbers stay in your browser