Ask where the order process causes friction and the answer comes quickly: data entry, corrections, waiting and customer enquiries. Ask what that costs each year and the answer is often less clear.
Without that number, there is no reliable business case. You do not know how much priority the problem deserves and cannot later demonstrate what automation delivered.
Calculate three types of cost: labour time, errors and delays.
1. Calculate the labour time
Measure how many minutes an employee actually spends on one order. Include not only data entry, but also opening attachments, finding information, checks and corrections before entry.
Then use this formula:
orders per week × minutes per order ÷ 60 × 52 = hours per year
Multiply the result by the total internal hourly cost:
hours per year × internal hourly cost = labour cost per year
Preferably use the all-in internal hourly rate, including employer costs and relevant overhead. If you only use the gross hourly wage, the result is a conservative lower bound.
Worked example
A team processes 250 orders per week and spends an average of 12 minutes on each order. The internal hourly cost is €35.
- 250 × 12 ÷ 60 = 50 hours per week
- 50 × 52 = 2,600 hours per year
- 2,600 × €35 = €91,000 per year
This example is not an rb2 benchmark. It only demonstrates how the formula works. Always measure your own order volume and handling time.
At INSPIRED Pet Nutrition, one order required 15 to 30 minutes of manual work before automation. Read the INSPIRED case.
2. Calculate the cost of errors
An error costs more than the few minutes required to correct it. Consider:
- investigation by service or internal sales teams;
- a corrected order or credit note;
- additional shipping or returns;
- re-entry in the ERP;
- contact with the customer;
- delayed delivery or payment.
Use this calculation:
orders per year × error rate = orders requiring rework
orders requiring rework × average cost per error = annual error cost
Define what counts as an error. Otherwise, you will compare different definitions later.
3. Measure delays separately
It is not always responsible to convert delays into monetary value. Start by measuring:
- time from receipt to order confirmation;
- percentage of orders confirmed within the agreed period;
- number of customer status enquiries;
- peak workload and backlog on busy days.
If you do translate delays into money, label assumptions clearly. Examples include lost urgent orders, additional delivery costs or time other teams spend answering status questions.
Include the costs outside the formula
Three risks are not fully captured in the calculation, but still belong in the management discussion:
- Growth requires more people. If volume and manual work grow in direct proportion, the operation remains dependent on additional capacity.
- Process knowledge sits with a few employees. If a specialist leaves, part of the working method and knowledge of exceptions may disappear.
- Attention is diverted from customers and improvement. Every hour spent on entry and rework is an hour unavailable for higher-value work.
From baseline to decision
Use the same definitions before and after the change. Record who measures, where the figures come from and which representative orders are included.
The baseline answers three questions:
- How large is the problem today?
- What improvement must a solution deliver?
- When is it responsible to continue building?
In a free 30-minute conversation, we first assess whether your order process is a promising candidate. During the paid Prove session, we then investigate the workflow, data, exceptions, systems and business case. The outcome may also be to improve the data, process or an integration first, or decide that building is not sensible.