How to Actually Calculate Your ERP Automation ROI

The three cost buckets most calculators ignore

• Consultant retainers — billed hourly, often $150–$250/hour, often hidden in an annual contract line.
• Error recovery — the hours spent unpicking a wrong journal, a missed invoice, a duplicate payment. Usually 2–4x the original task time.
• Delay cost — a close that runs 10 days instead of 4 delays every downstream decision that depends on actuals.

The simple ROI formula that actually works

Start with: (direct labor saved × loaded cost/hour) + (consultant fees eliminated) + (error-recovery hours saved × loaded cost/hour) + (cost of delayed decisions avoided) − (AI service cost) = net annual ROI. Divide by the AI service cost to get ROI%.

Numbers from a real mid-market deployment

• Direct labor saved: 1.5 FTE × $80K loaded = $120K/year
• Consultant retainer eliminated: $15,000/month × 12 = $180K/year
• Error recovery saved: 200 hours × $60 loaded = $12K/year
• Faster close decisions: harder to quantify, often $50K–$200K/year depending on decision speed
• Total savings: $362K/year on the low end
• AI service cost: ~$60K/year for a Growth-tier deployment
• Net annual ROI: ~$302K · ROI%: ~500%

Sanity-check your assumptions

ROI calculators get abused. To keep yourself honest: use fully-loaded cost per hour (salary × 1.4–1.6); only count consultant hours you would actually reduce (not 'eliminate'); assume 70% of projected error savings, not 100%. If ROI is still strongly positive under those assumptions, the project is worth it.