Automation ROI Mental Model
Whenever I approach an automation task, I always ask myself is it worth it. Unfortunately, I can’t recall the origin, but the chart below has always been key to my decision making.
What we see above is a rule of thumb for process automation ROI. Let’s take an example;
Inserting test data into a database takes 1 hour, and I do it daily. I am confident that I can shave 30 minutes off the lead time through automation.
Therefore, if we look at the daily column, and the 30 minutes (saving) row - the point at which they intersect is the amount of time I can spend before hitting diminishing returns. So, for this process, I can spend five weeks automating a task for a positive ROI.
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