EXECUTIVE ANSWER
Manual process cost is not just salary.
It is human time + rework + direct costs that can actually be demonstrated.
The goal is not to inflate the problem. It is to build a number solid enough to decide what deserves attention.
HOW THE COST IS BUILT
Three layers before talking about ROI.
01
Human workload
Volume × person-minutes
The effective time all people spend executing the normal work.
02
Rework
Repeated cases × additional effort
Work that returns because of errors, missing information, inconsistencies, returns or corrections.
03
Direct costs
Only what can be demonstrated
Penalties, losses or other costs the business can already attribute to the process.
RESULT
Observable monthly cost
A defensible basis for later comparison with investment, achievable benefit, risk and payback.
BUSINESS EXAMPLE
Manual supplier quotation comparison.
A process does not need hundreds of monthly executions to be costly. A small number of cases can consume substantial value when each one requires heavy human work, coordination or rework.
Assume 40 monthly executions, 150 person-minutes per execution, COP 45,000 per hour, 20% rework, 60 additional minutes per reworked case and COP 800,000 in known direct costs.
EXECUTIONS
40 / month
OBSERVABLE WORK
108 h / month
MONTHLY COST
COP 5.66 M
ANNUAL COST
COP 67.92 M
COP 67.92 million per year justifies a serious evaluation of how much of that cost can become released capacity, savings, avoided hiring, less rework or another capturable impact, then compare it with investment, risk, maintenance and payback.
FROM RELEASED TIME TO ECONOMIC IMPACT
From current workload to a defensible economic consequence.
Current cost
What the process consumes today in work and directly attributable costs.
Releasable capacity
Manual work that could stop consuming team capacity if the intervention works.
Economic impact
Savings, avoided hiring, higher capacity, less rework or another consequence the business can demonstrate.
HOW TO USE THE NUMBER
Cost helps set priority. It does not make the decision.
Bounded impact in this process
Review proportionality.
If this process concentrates little observable value, compare a small intervention and, if it does not fit, look for another stage, process or area with greater impact.
Relevant problem, process to organize
Change the first step.
If rules, data or ownership are unstable, the first intervention may be to organize, stabilize or integrate before automating.
Meaningful problem and ready process
Evaluate intervention.
When cost, recurrence and operating conditions align, it is worth evaluating automation, integration or a combination.
WHAT WE DO QUANTIFY
Work and costs supported by evidence.
Human time
Person-hours used to execute the process.
Rework
Additional work caused by errors, missing information or corrections.
Direct costs
Amounts the business can already attribute to the process.
WHAT WE DO NOT FORCE INTO MONEY
Important impacts that are not money yet.
Waiting time
It may affect operations without having a defensible monetary relationship yet.
Releasable capacity
Freeing hours creates capacity that can become savings, avoided hiring, higher throughput, faster response or less rework.
Risk
It can be material without a sufficiently known frequency or economic impact yet.
Opportunity
Do not convert it into money unless the business can support the relationship with real outcomes.
FREQUENT QUESTIONS
Before turning the result into a decision.
How should I calculate a person’s hourly cost?+
Use the business cost your company considers appropriate for the analysis. It does not have to be take-home salary; it should be consistent and defensible.
Should I include waiting time?+
Only turn it into money when you can demonstrate its impact. Otherwise keep it as an unquantified operational impact.
What value do freed hours create?+
Freeing hours creates capacity. Economic impact appears when that capacity becomes savings, avoided hiring, higher throughput, less rework or another demonstrable outcome.
What is rework cost?+
It is the additional work created when a case must be corrected, completed, repeated or returned because of errors or incomplete information.
When does this cost justify automation?+
There is no universal threshold. Compare it with investment, realistically achievable benefit, risk, maintenance and payback.
NEXT STEP
Want to apply this analysis to a real process?
Lyrvanta’s diagnostic evaluates current workload, frequency, rework, impact and intervention conditions to help you identify where value exists and what the next step could be.