Lobbi-Docs ROI Calculator
Calculate the financial return on an automation engagement using actual client process data. Produce an ROI summary suitable for executive presentation, including payback period, first-year net benefit, and 3-year NPV.
Step 1: Data Collection
Ask the client the following questions during discovery. Document every answer — do not estimate figures that can be collected.
Current process data:
Who performs this process?
- Role/title: [e.g., CSR, Loan Processor, Underwriter]
- Fully-loaded hourly cost (salary + benefits + overhead): $[X]/hour
- If unknown: use industry benchmarks (CSR: $35–45/hr fully loaded; Loan Processor: $45–60/hr; Underwriter: $60–85/hr)
How often does the process occur?
- Frequency: [N] times per [day / week / month]
- Convert to annual: [N] × [frequency multiplier] = [annual volume]
- Seasonal variation: note if volume peaks (e.g., renewal season, year-end)
How long does one instance take?
- End-to-end time: [N] minutes per instance
- Include: setup, execution, review, documentation, follow-up communications
- Exclude: time spent waiting for external responses (unless staff is blocked)
What is the error rate?
- Percentage of instances that result in an error requiring correction: [X]%
- Time to identify and correct one error: [N] minutes
- Who performs the correction (same role or escalation?): [role]
Are there additional costs?
- Overtime or temporary staff costs from process volume: $[X]/year
- Vendor fees paid per transaction for manual process: $[X] × [annual volume]
- Compliance penalties or rework from errors (if tracked): $[X]/year
- Customer attrition attributable to process delays (if estimable): $[X]/year
What percentage of the process will automation handle?
- Straight-through processing rate (no human intervention): [X]% (typical range: 60–90%)
- Exception rate requiring human review: [100-X]%
- Time for human review of exceptions: [N] minutes each
Step 2: Current Annual Cost Calculation
Calculate the total annual cost of the manual process.
Manual labor cost:
Annual volume = [frequency per period] × [periods per year]
Hours per instance = [minutes per instance] / 60
Annual hours = annual volume × hours per instance
Annual labor cost = annual hours × fully-loaded hourly rate
Error and rework cost:
Annual errors = annual volume × error rate (decimal)
Annual rework hours = annual errors × (correction time in minutes / 60)
Annual rework cost = annual rework hours × hourly rate of correction staff
Additional costs:
Annual additional costs = overtime/temp + vendor transaction fees + penalties + attrition
Total annual cost of manual process:
Total = annual labor cost + annual rework cost + annual additional costs
Step 3: Automation Savings Calculation
Labor hours recovered by automation:
Straight-through volume = annual volume × straight-through rate
Hours recovered from straight-through = straight-through volume × (minutes per instance / 60)
Exception volume = annual volume × exception rate
Hours recovered from exceptions = exception volume × ((minutes per instance - exception review time) / 60)
Total hours recovered = hours recovered from straight-through + hours recovered from exceptions
Annual labor savings = total hours recovered × hourly rate
Error reduction savings:
Automation error rate (assume 0.1% for well-designed systems, vs. current [X]%)
Remaining annual errors = annual volume × 0.001
Rework hours saved = (annual errors - remaining annual errors) × (correction time / 60)
Annual error savings = rework hours saved × hourly rate
Additional cost savings:
Eliminated overtime/temp: $[X]/year
Eliminated per-transaction vendor fees: $[X] × straight-through volume
Annual additional savings = sum of eliminated costs
Total annual savings:
Total annual savings = annual labor savings + annual error savings + annual additional savings
Step 4: ROI Calculation
Project investment:
Total project fee: $[Investment]
Ongoing annual cost (maintenance, hosting, licensing): $[Annual ongoing]
Year 1 total cost: Project fee + annual ongoing
Year 2–3 total cost per year: Annual ongoing only
ROI metrics:
| Metric | Formula | Value |
|---|---|---|
| First-year net benefit | Total annual savings − Year 1 total cost | $[X] |
| First-year ROI | (Net benefit / Year 1 total cost) × 100 | [X]% |
| Payback period | Year 1 total cost / (Total annual savings / 12) | [N] months |
| Year 2 net benefit | Total annual savings − Annual ongoing | $[X] |
| Year 3 net benefit | Total annual savings − Annual ongoing | $[X] |
| 3-year cumulative savings | Sum of year 1–3 savings | $[X] |
| 3-year total cost | Year 1 cost + (Year 2+3 ongoing × 2) | $[X] |
| 3-year NPV (10% discount rate) | NPV formula below | $[X] |
3-year NPV calculation:
Discount rate: 10% (standard corporate hurdle rate)
Year 1 net cash flow: total annual savings − year 1 total cost
Year 2 net cash flow: total annual savings − annual ongoing
Year 3 net cash flow: total annual savings − annual ongoing
NPV = Year1_CF / (1.10)^1 + Year2_CF / (1.10)^2 + Year3_CF / (1.10)^3
Step 5: Sensitivity Analysis
Show how ROI changes if key assumptions vary. Helps the client see the floor.
| Scenario | Assumption Change | Annual Savings | Payback Period |
|---|---|---|---|
| Base case | As collected | $[X] | [N] months |
| Conservative (-20%) | 20% lower volume or savings rate | $[X] | [N] months |
| Optimistic (+20%) | 20% higher volume or straight-through rate | $[X] | [N] months |
| Break-even | Minimum savings to achieve 24-month payback | $[X] | 24 months |
Break-even volume: The minimum annual transaction volume at which the project pays back within 24 months:
Break-even annual savings = Year 1 total cost / 2
Break-even volume = break-even annual savings / (savings per transaction)
Step 6: ROI Summary Output
Produce a one-page ROI summary for executive presentation:
[Client Name] — Automation ROI Summary
| Current State | Automated | |
|---|---|---|
| Annual process volume | [N] transactions | [N] transactions |
| Manual hours per year | [N] hours | [N] hours (exceptions only) |
| Annual labor cost | $[X] | $[X] |
| Annual error cost | $[X] | $[X] |
| Total annual cost | $[X] | $[X] |
Investment and Return:
| Project investment | $[Amount] |
| Annual ongoing cost | $[Amount] |
| Annual net savings | $[Amount] |
| First-year ROI | [X]% |
| Payback period | [N] months |
| 3-year NPV | $[Amount] |
Based on [volume] transactions/year at $[rate]/hour, [X]% automation rate, and [X]% current error rate. Actual results may vary.
Notes on Data Quality
- If the client cannot provide actual hours or volume data, use a documented benchmark source and note the assumption
- Never fabricate figures — an overestimated ROI that fails to materialize destroys trust
- If the payback period exceeds 24 months at base case, have an honest conversation before proceeding with the proposal
- Recurring costs (hosting, licensing, support retainer) must be included — they reduce the ongoing savings
- If the client's fully-loaded hourly rate is unknown, use the midpoint of the role benchmark range and document it