- Who is this for?
- Executive teams, finance leaders, operations directors and transformation managers
- Question addressed
- Build an explicit investment case for a transport automation project.
Key takeaways
- Freeze the baseline, scope, period and exclusions before estimating benefits.
- Include deployment, subscription, supervision, maintenance and remaining rework.
- Track released capacity in hours without automatically turning it into cash savings.
- Count revenue only after a verifiable outcome and use its contribution, not gross revenue, in the ROI model.
- Test cautious, central and high scenarios without counting the same operational effect twice.
Start with a comparable baseline
A forward-looking calculation starts with a measured baseline, not a generic automation percentage. Describe the current workflow, eligible files, active work by stage, exceptions and outcomes. The baseline should cover a representative period and retain its evidence: TMS volumes, time records, overtime, external services, planned hires and closed invoice-control cases.
The scope must remain stable between the baseline and the project. If the model covers email order intake for three customers, it cannot assign benefits from a portal, another site or invoice control to the same project. The current cost of rekeying can inform the baseline; on its own, it is not the ROI of the complete project.
| Baseline input | Definition to document | Evidence to retain |
|---|---|---|
| Eligible volume | Files that meet the inclusion rules during the period | Dated extract, filters and exclusions |
| Initial active time | Search, entry, checking, follow-up and rework per file | Time-study grid and sampling method |
| Initial quality | Corrections, incomplete files, delays and incidents under stable definitions | Numerator, denominator and reason for each discrepancy |
| Variable expenditure | Overtime, temporary staff, outsourcing or a genuinely planned hire | Budget, invoice, staffing plan or management decision |
| Invoice outcomes | Amounts detected, confirmed, invoiced and collected, each tracked separately | File, decision, invoice and payment |
Count the full cost, not just the subscription
The ROI denominator includes every expenditure required to obtain and sustain the outcome. Deployment may include scoping, configuration, mappings, testing, access preparation and team enablement. Recurring costs include the subscription, human supervision, controls, maintenance of rules and interfaces, and any rework that remains necessary.
Internal work is not free. When an employee spends time on the project or its supervision, the company should apply its own loaded-cost method. Amounts must use the same horizon, currency and accounting convention. One-off costs should remain separate from annual expenditure.
| Cost family | Formula or estimate base | Control point |
|---|---|---|
| Initial deployment | Internal days × daily cost + services + training | Do not artificially spread the cash outflow in the cash-flow view |
| Subscription | Contract price × billed units × duration | Test volumes, tiers and exclusions against the actual quote |
| Supervision | Review, decision and escalation hours × hourly cost | Include rejected, ambiguous and out-of-rule cases |
| Maintenance | Updates, regression testing and revalidation of interfaces, rules and mappings | Allow for workflow and system changes |
| Incidents and rework | Correction time + any external cost | Do not hide these costs inside an average processing rate |
Separate capacity, avoided costs and realised revenue
Released capacity measures hours made available. Those hours may absorb growth, reduce a backlog or allow more checking without reducing expenditure. Their indicative value — hours multiplied by loaded hourly cost — therefore stays outside the financial ROI benefits until a concrete decision turns that capacity into an avoided cost or additional contribution.
Avoided costs are expenditures that disappear or are no longer incurred: removed overtime, a reduced external service or a budgeted hire that is no longer needed. Revenue follows a different chain. A detected discrepancy is not revenue; a confirmed discrepancy has not yet been invoiced; an invoice has not necessarily been paid. To avoid overstating the benefit, the model can include contribution from additional revenue collected, calculated as revenue multiplied by a contribution-margin rate defined by finance.
| Outcome | Formula | ROI treatment |
|---|---|---|
| Released capacity | Eligible files × observed coverage × net minutes released ÷ 60 | Tracked in hours; excluded from financial benefits by default |
| Indicative capacity value | Released hours × loaded hourly cost | Decision indicator, not an automatic cash saving |
| Avoided costs | Baseline expenditure removed or not incurred, supported by evidence | Included once when the effect is realisable and attributable |
| Revenue contribution | Additional revenue collected × contribution-margin rate | Included after observation; no value assigned to a detected difference alone |
| Retained financial benefits | Avoided costs + revenue contribution | Financial numerator before project costs are deducted |
| Period ROI | (Cumulative financial benefits − cumulative full costs) ÷ cumulative full costs | Outcome conditional on the inputs and available evidence |
Documented calculation table: a fictional three-year example
Entirely fictional example: a company is assessing a workflow with 36,000 eligible files per year and uses a fictional loaded hourly cost of €32. Initial deployment is set at €42,000. The three scenarios vary coverage, net minutes released, supervision, maintenance and financial effects. No figure comes from an Axonovia customer, an actual quote or an industry average.
To represent a ramp-up, the example recognises 50% of annual benefits in year one, followed by 100% in years two and three. The indicative capacity value remains outside the ROI. Additional revenue is assumed to have been collected for this exercise and is multiplied by a fictional contribution margin of 35%. In a real business case, every input must be replaced with confirmed company data.
| Fictional calculation line | Cautious | Central | High |
|---|---|---|---|
| Coverage × net minutes released | 45% × 4 min | 65% × 6 min | 80% × 8 min |
| Annual capacity | 36,000 × 45% × 4 ÷ 60 = 1,080 h | 36,000 × 65% × 6 ÷ 60 = 2,340 h | 36,000 × 80% × 8 ÷ 60 = 3,840 h |
| Indicative value, excluded from ROI | 1,080 × €32 = €34,560 | 2,340 × €32 = €74,880 | 3,840 × €32 = €122,880 |
| Retained annual avoided costs | €18,000 | €42,000 | €72,000 |
| Additional revenue collected | €25,000 | €55,000 | €90,000 |
| Revenue contribution at 35% | €8,750 | €19,250 | €31,500 |
| Annual financial benefits | €18,000 + €8,750 = €26,750 | €42,000 + €19,250 = €61,250 | €72,000 + €31,500 = €103,500 |
| Annual recurring costs | €30,000 subscription + €24,000 supervision + €12,000 maintenance = €66,000 | €30,000 + €18,000 + €10,000 = €58,000 | €30,000 + €15,000 + €9,000 = €54,000 |
| Full three-year costs | €42,000 + 3 × €66,000 = €240,000 | €42,000 + 3 × €58,000 = €216,000 | €42,000 + 3 × €54,000 = €204,000 |
| Three-year benefits with ramp-up | €26,750 × 2.5 = €66,875 | €61,250 × 2.5 = €153,125 | €103,500 × 2.5 = €258,750 |
| Three-year net result | €66,875 − €240,000 = −€173,125 | €153,125 − €216,000 = −€62,875 | €258,750 − €204,000 = €54,750 |
| Three-year ROI | −€173,125 ÷ €240,000 = −72.1% | −€62,875 ÷ €216,000 = −29.1% | €54,750 ÷ €204,000 = 26.8% |
Test sensitivity before making the decision
A central result should never be read on its own. Change benefits, ramp-up speed and recurring costs separately to identify the assumptions driving the decision. In the fictional central case, break-even over three years requires €216,000 of cumulative benefits, equivalent to €86,400 of steady-state annual benefits with the 2.5 ramp-up multiplier. That is about 41% above the central assumption of €61,250.
The model should then be validated with pilot evidence: observed coverage, remaining human work, action quality, expenditure actually removed and closed revenue outcomes. A company may still choose a project with a negative financial ROI for another documented objective — continuity, risk control or growth capacity — without relabelling that objective as a cash saving.
- 01Before commitment
Ask business and finance owners to confirm volumes, internal costs, the quote, the horizon and attribution rules.
- 02During the pilot
Measure reliability, coverage and remaining work on a sample comparable with the baseline.
- 03After each period
Replace assumptions with observed expenditure, savings and collections without rewriting the original scenario retrospectively.
- 04Before extending scope
Recalculate ROI because an additional channel, rule or action also changes costs and risks.
| Test around the fictional central case | Three-year benefits | Three-year costs | Three-year ROI |
|---|---|---|---|
| Annual benefits −25% | €61,250 × 75% × 2.5 = €114,844 | €216,000 | −46.8% |
| Central assumption | €61,250 × 2.5 = €153,125 | €216,000 | −29.1% |
| Annual benefits +25% | €61,250 × 125% × 2.5 = €191,406 | €216,000 | −11.4% |
| Year-one ramp-up limited to 25% | €61,250 × 2.25 = €137,813 | €216,000 | −36.2% |
| Recurring costs +20% | €153,125 | €42,000 + 3 × €58,000 × 120% = €250,800 | −38.9% |
Frequently asked questions
Direct answers
Can all released capacity be counted as savings?
No. Released hours can create value without reducing expenditure. They enter financial ROI only when a verifiable mechanism turns them into an avoided cost or additional contribution, and never on top of that same effect when it has already been counted.
What horizon should be used for ROI?
Choose a horizon consistent with the contract, deployment and reasonable life of the workflow, then test more than one. Show initial costs, recurring costs, ramp-up and, when calculated, the break-even date separately.
How should revenue found through invoice control be valued?
A detected difference should not be valued as revenue. Track confirmation, the decision, invoicing and collection. The ROI model can then include the corresponding contribution under the rule approved by finance, without treating gross revenue as a full benefit.
Sources and methodology
This resource describes Axonovia's product approach based on transport workflows. The examples are illustrative and do not constitute a performance commitment or a universally applicable contractual rule.
Product review: Axonovia team · next review recommended before 31 August 2027 or following a material change in scope.