How to Find The Value of Automating Work

“If you have to do it more than once, it’s worth automating” is often a phrase that’s spoken – but I find not really taken to heart in workplaces. There’s any number of reasons that automation isn’t executed (and I think as a result innovation) in workplaces:

  • I couldn’t be bothered. Just tired people, not really wanting to spend the time because there are so many pressing tasks that need to be done.
  • I don’t know how. It can be expensive to find out because time exists as a finite resource in someone’s head. The ‘I don’t know’ is often overcome by asking.
  • It’s not worth it. A regular and sometimes difficult question to overcome – the value of automating (even in businesses that specialise in it!) is often not well understood. How do we even come to understand the value of automating a task?

The way to find the value of an automation task is simple – well at least the labour part. Here’s how I do it.

To start, I need to know what the base cost is to me over the long term.

To do this, I take the time it takes each time I do it, multiplied by my hourly rate/cost, for a year.

Screenshot of my calculator in Excel

An hourly task:
The task takes me 3hrs per week, at $270/hr, 52 times a year.
Which is (3 * 52) * 270
= $42,120
The base value of our task is $42,120

A minutes-per-day task:
The task takes 3 minutes per day, at $130/hr, 365 times a year.
Which is (((3/60) * 5) * 365 ) * 130
= $11,862.5
The base value of our task is $11,862.5

So is it worth automating?

To work this out, you need to amount of time of this task to automate it – simply divide the total by your hourly rate. That’s how many hours (or days, or minutes) you can spend automating for it to break even in a year.

For the minutes-per-day task this feels small. Small increments of time add up.

An hourly task:

The base value of my task is $42,120
My hourly rate is $270/hr
Time to automate should be less than or equal to (42,120/156)
Which = 156hrs
(or 20.8 days @ 7.5hrs/day)

A minutes-per-day task:

The base value of my task is $11,862.5
My hourly rate is $130/hr
Time to automate should be less than or equal to (11,862.5/130)
Which = 89hrs
(or 11.9 days @ 7.5hrs/day)

Wow! From what seems like a really inconsequential task 3 minutes a day, can turn out to be worth a significant amount of time and hours per year. I think that’s well worth automating if it’s possible.

Even if you do 1/2 the amount of time, this will provide savings in the first year.